SUMMARY OF - THE INTELLIGENT INVESTOR
Do you know?
Why “THE INTELLIGENT INVESTOR” is called “BIBLE OF INVESTMENT”
“By Far the Best Book on Investing Ever Written.”- Mr. Warren Buffett.
So, by this you can understand that WHY IS THIS IMPORTANT FOR Us. And How much we can get ideas from this book about “INVESTMENT”
This is “GLORY OF INVESTMENT”
This Book is a bundle of 20 chapters.
But here we are going to summaries it in TOP 5 LEARNING LESSONS.
So, lets start to know- WHY IS THIS CALLED “BIBLE OF INVESTMENT”
1- TYPE OF INVESTOR
Check your self.
Now the time has come to check, which type INVESTOR you are?
There are mainly TWO types of investors.
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ACTIVE/ENTEPRISING INVESTOR-
If you don’t copy others and use your own BRAIN-INTELLIGENCY to pick up any share.
Active investors play with RISK and focus on PAST-PRESENT-FUTURE performance of share and use their skill.
2.PASSIVE/DEFENSIVE INVESTOR-
If you are looking for SAFETY and invest with LOW RISK.
As- FDs, Bonds. so you are in this category.
It is very easy to check your type. And it is easy to understand.
So, before investment check your ability and your mind set.
Then invest accordingly that.
If you can’t pay regular attention on MARKET then choose FDs and Bonds.
But if you can take risk and watch MARKET then invest on STOCKS. MUTUAL FUND contains average risk. They are also affected by MARKET.
2- INFLATION
The VALUE of Money is Decreasing.
Are you surprised??
Don’t be. Because the “VALUE OF MONEY IS DECREASING IN DAY BY DAY”.
INFLATION shows that “BUYING POWER OF RUPEE-1 IS DECREASING DAY BY DAY.
We should focus on Investment of MONEY not to collect it.
3- [a] NEVER LOSE YOUR MONEY
[b] INTELLIGENCY FOR LONG TIME INVESTMENT
Here we’ll discuss Two important points.
So, Let’s Go----
[a] NEVER LOSE YOUR MONEY
This rule is “SOUL OF MR. WARREN BUFFETT’s INVESTMENT”
He also follows these two rules. And if you want to be a good investor then you should also follow these following-
-
RULE-1 NEVER LOSE MONEY.
-
RULE-2 NEVER FORGET RULE-1.
An INTELLIGENT INVESTOR is happy with 10% or 15% in place of “LOSE HIS SOLE VALUE OF INVESTMENT.”
[b] INTELLIGENCY FOR LONG TIME INVESTMENT
INTELLIGENT INVESTOR always thinks for Long time investment like 7 to 10 years.
Because if any company is not performing well at present, it can be profitable in long term if it’s management and policies are GOOD AND IMPROVING IN NATURE.
So, you should also think for long time and good managed company to invest.
4- MR. MARKET
WHO IS THIS MAN?
Just Wait I am TELLING YOU.
Author Mr. BENJAMIN GRAHAM supposed and addressed “STOCK MARKET” as “Mr. MARKET”.
He says that Mr. Market is unpredictable and unstable. Mr. Market is moody. It is on him that share price is High or Low.
So, we should ready for any type of situation.
We should invest in “DIVERSIFIED METHOD”. It is safer and can give better returns.
So, put your money in Diversified Funds and choose Diversified Sectors.
It is better for you.
5- SAFETY MARGIN
Have you checked SAFETY MARGIN before investment?
Check now
It means if any company on which you invested, goes to loss then how much possibility that your money is SAFE.
An intelligent investor always calculates Safety Margin before investment and it also shows NEVER LOSS MONEY.
Here is FORMULA OF SAFETY MARGIN-
(FAIRLY WORTH – BUSINESS OWES)
* 1/FAIRLY WORTH
