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The Intelligent Investor, Rev. Ed

The Intelligent Investor, Rev. Ed

by Benjamin Graham

The Characteristics of The Intelligent Investor

  1. Patient
  2. Disciplined
  3. Keen to learning new things
  4. Able to keep emotions in check
  5. Able to think for themselves (critical thinking skills)

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What Consists Intelligent Investing

  1. Intelligent investing requires a thorough analysis of the company's (that you'll be investing in) fundamentals
  2. Includes the competency to protect himself from or against severe losses
  3. An intelligent investor must not anticipate extraordinary results therefore keeping expec...

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BENJAMIN GRAHAM

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

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The Intelligent Investor vs The Spectator

The investor believes that the market price is judged based on the established standards of value while the spectator bases all their judgment on market price.

To distinguish whether you are the intelligent investor or a speculator ask yourself whether or not you would invest on a stock ...

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BENJAMIN GRAHAM

The stock investor is neither right or wrong because others agreed or disagreed with him; he is right because his facts and analysis are right.

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The Rule of Opposite

Benjamin Graham stated that the more enthusiastic investors and speculators become in the long run (of investing), the more certain they are to be proved wrong in the short run because the future of the market is unpredictable.

To be an intelligent investor means to be humble, c...

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Types of Investors

In Benjamin Graham's book, he defines two types of investors based on the aggressiveness of their portfolios:

  1. The active / enterprising investor; and
  2. The passive / defensive investor

The former requires continuous researching o...

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Once you have your capital, invest 50% of it into bonds or an index fund (depending on market conditions) while the other 50% to be invested on individual stocks.

However, when investing on individual stocks make sure of the ff:

  • avoid small cap stocks unless they're diversif...

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Before investing your capital:

  • make sure that their current ratio is below 1.5
  • debt must be no more than 110% of working capital
  • current earnings per share must be greater than their earnings per share (EPS) from 5 years ago
  • they must pay a current dividend...

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Margin of Safety

This is a principle of investing wherein an investor purchases securities only when their market price is significantly below their intrinsic value.

The formula to determine the intrinsic value of something is:

Margin of Safety = Market Cap / Deep Value Barg...

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This book helped me to learn 6 important steps to get success in my goals and I'm still applying them whenever I can and I can see the change.

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