The Intelligent Investor, by Benjamin Graham

The Intelligent Investor is the bible for value investors. The book is very long, and Graham goes into many details of security analysis, even into some instruments that are rarely traded in today's market. The overall message is still powerful: Analyze a company for what it is, and not what you hope it will become. Be fair in your assessment and do not suddenly use next years earnings, higher multiples, higher debt levels, higher dilution, or any of the gimmicks that try to convince you that times have changed, because they never do. Graham's mantra is to buy a company if it is undervalued, because it is out of favor. If it has the assets and careful management, it might be prepared for some unexpected growth, which will pay off twice if it becomes again in favor with investors. If not, one can often exit the position without a loss, since the assets provide enough downside protection.