“The enterprising investor, by definition will devote a fair amount of his attention and efforts toward obtaining a better than run-of-the-mill investment result.” — Benjamin Graham, ‘The Intelligent Investor’

The Enterprising Investor is who many retail investors strive to become and in pursuit deal blow after blow to their financial well being. It is important we draw a bold line between our definition of an Enterprising Investor and what you might deem an Enterprising Investor; as you may be talking about a Speculator.

Benjamin Graham has done such a fine job of explaining what it means to be an investor and what it means to be a speculator, that I am forced to quote him at length.

“An investment operation is one which, upon thorough analysis promises safety of principal and an adequate return. Operations not meeting these requirements are speculative.”
– Benjamin Graham, ‘The Intelligent Investor’

Compare that with the purchase of a few shares of stock by an inexperienced member of the public who has some largely emotional conviction that they will be able to profit from their “investment”.

“…in the easy language of Wall Street, everyone who buys or sells a security has become an investor, regardless of what he buys, or for what purpose or at what price, or whether for cash or on margin.”

Even if you understand the difference between Investing and Speculating, but still want to speculate, heed to this advice:

“Speculation is always fascinating, and it can be a lot of fun while you are ahead of the game. If you want to try your luck at it, put aside a portion- the smaller the better- of your capital in a separate fund for this purpose. Never add more money to this account just because the market has gone up and profits are rolling in. Never mingle your speculative and investment operations in the same account nor in any part of your thinking.” — Benjamin Graham, ‘The Intelligent Investor’

Now that speculation’s been taken care of, lets talk about becoming a real Enterprising Investor.