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the Intelligent Investor by Benjamin Graham Summary

the Intelligent Investor by Benjamin Graham Summary

the Intelligent Investor by Benjamin Graham Summary

Benjamin Graham is one of the greatest practical investment thinkers of all time. After his mother lost all their fund in a financial accident in 1907, his family fell into poverty. However, Benjamin reverses this. Studying at Columbia University, he then worked on Wall Street, left officers to analysts to partners before carrying out investment partnerships themselves. As a result, he gathered a lot of historical and psychological knowledge about the financial market, which stretched a few decades. And he shared the knowledge in his book, intelligent investors.


Where he explains intelligent investors explaining investment value, which is focused on producing a stable long-term benefit by ignoring the current market and choosing companies with high intrinsic values.

And for this, we will talk in this article about the Intelligent Investor by Benjamin Graham Summary.


Benjamin says, to invest successfully for a lifetime, you do not need a Stratosphere IQ, unusual business insights, or insider common information. What is needed is a healthy intellectual framework for making decisions and abilities to maintain emotions from corrosion frameworks. The Intelligent Investor provides good advice on the basics and describes two roads that investors can take.


In order to understand the two methods, he summarized them in three main ideas.


Here are 3 key lessons from the Intelligent Investor by Benjamin Graham Summary to help you start investing.


Lesson 1: There are 3 principles to become intelligent investors.


Often also called investment value, intelligent investment according to Graham rests on 3 principles.

Smart investors always analyze the long-term evolution and company management principles before investing.

They always protect themselves from losses with investment diversification.

Smart investors have never looked for crazy profits but focus on a safe and stable return.

The famous offer by Warren Buffet is about 2 rules for investing.

Regulation No. 1: Don't ever lose money.

Regulation No. 2: Don't forget rule No. 1.

That's what intelligent investment. No one can predict the next Facebook, but everyone can protect themselves from losses.

By carrying out a thorough analysis, intelligent investors find shares with gaps between their current prices and intrinsic values ​​of the company adhering to the company and will ultimately open. This is based on the evidence collected from seeing the company's history and its management values.

Investors invested in some of the companies, so they did not lose everything when everything was wrong and then sat down, became very happy with collecting 10%, 12%, or even 15% per year.

Oh, and he did one more thing.


Lesson 2: Never trust Mr. Market.


The most famous analogy Graham is one of Mr. Market, where he photographed the entire stock market as one person.

If you imagine Mr. Market appears at your door every day, quotes you different prices for various stocks, what will you do?

According to Graham, you will be the best to ignore it at all, day after day. Sometimes the price he says will look cheap, sometimes height astronomically.

That's because Mr. Market is not too smart, totally unpredictable, and suffers from a serious mood swing.

For example about a month before the new iPhone was released, Stocks rallied while people directed in front of the Apple Store. But when a new cellphone is not exactly as expected, shares can decline the next day.

As humans, we are very good at recognizing patterns, that we try to find them even where there is nothing. That's why we naturally stock prices that have risen for 10 days must rise further - which of course is not true.

If you want to be a smart investor, depending on your own research and ignore the market at all.


Lesson 3: Always hold on to a stringent formula and you will be fine


Finally, to further move you from emotional pressure to invest with the market, you must always hold fast too tight formulas when investing.

Benjamin calls it formula investment, but this is better known as the average cost of the dollar.

This means that you simply set a fixed budget you will invest every month or quarter, and then invest into the stock you previously selected - no matter the price.

For example, I invest 10% of my income every month. The funds entered my investment account on autopilot and then I invested it in the stock I already had.

This is rather demanding emotionally because it requires you to invest the same amount again and again - no more when shares are cheaper, no less when expensive stock.

But once you forget it, this is a great way to protect yourself from losses, which can occur if you invest how much right before the accident.


the Intelligent Investor  Summary


FAVORITE QUOTES FROM THE AUTHOR the intelligent investor 


“An investments operation is one which, upon thorough analysis, promises safety of principal and an adequate return. Operations not meeting these requirements are speculative.”


The intelligent investor is a realist who sells to optimists and buys from pessimists.”


“But investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”


“People who invest make money for themselves; people who speculate make money for their brokers.”


“Buy cheap and sell dear.”


Who will I recommend buying a book?


to people for those who want to learn or read, What should an investor do In order to increase profit margin. And for people enterprising Who wants the market analysis to move away from the risk, and increase returns earnings in the future.


Thank you to everyone for reading the Intelligent Investor by Benjamin Graham Summary.
I wish all visitors to our site Mrs Reads Books a good time

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