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. (That’s the time to think of taking money out of your speculative fund.)

The Right Way To Speculation

One can simply not avoid speculation. In most periods the investor must recognize the existence of a speculative factor in his common-stock holdings. It is his task to keep this component within minor limits, and to be prepared financially and psychologically for adverse results that may be of short or long duration.

How To Deal With Speculative Investment

<ol><li>Obvious prospects for physical growth in a business do not translate into obvious profits for investors. </li><li>The experts do not have dependable ways of selecting and concentrating on the most promising companies in the most promising industries.</li></ol>

Two morals for investors

Being an intelligent investor simply means being patient, disciplined, and eager to learn; you must also be able to harness your emotions and think for yourself. This kind of intelligence, is a trait more of the character than of the brain.

Who is an Intelligent Investor?

For indeed, the investor’s chief problem—and even his worst enemy—is likely to be himself

Some speculation is necessary and unavoidable. There is intelligent speculation as there is intelligent investing. But there are many ways in which speculation may be unintelligent. Of these the foremost are: (1) speculating when you think you are investing.(2) speculating seriously instead of as a pastime, when you lack proper knowledge and skill for it.(3) risking more money in speculation than you can afford to lose.

Intelligent Vs Unintelligent Speculation

Analyzes the principles of stock selection and various approaches to investing, and compares the patterns and behavior of specific securities under diverse economic conditions

personaldevelopment

Personal Development

leadershipandmanagement

Leadership & Management

The classic bestseller by Benjamin Graham, perhaps the greatest investment advisor of the 20th century, The Intelligent Investor has taught and inspired hundreds of thousands of people worldwide. Since its original publication in 1949, Benjamin Graham's book has remained the most respected guide to investing, due to his timeless philosophy of "value investing," which helps protect investors against the areas of possible substantial error and teaches them to develop long-term strategies with which they will be comfortable down the road.Over the years, market developments have borne out the wisdom of Benjamin Graham's basic policies. Here he takes account of both the defensive and the enterprising investor, outlining the principles of stock selection for each, and stressing the advantages of a simple portfolio policy. Among the book's special features are the use of numerous comparisons of pairs of common stocks to bring out their elements of strength and weakness and the construction of investment portfolios designed to meet specific requirements of quality and price attractiveness.The Intelligent Investor may be the most important book you will ever read on making your investments a success."The Intelligent Investor is the best book ever written for the stockholder," says author and investment counselor John Train. Benjamin Graham's classic work offers sound and safe principles for investing-principles that have worked for more than forty years since the first edition was published. With an introduction and appendix by Warren Buffett, one of Graham's most famous students in investing strategy, this book takes account of both the defensive and the enterprising investor."By far the best book on investing ever written." -- Warren E. Buffett"There have been other good books written about money since 1841, but only a few hold up. The best known and most likely to make you money is The Intelligent Investor." -- Andrew Tobias"Graham ranks as this century's (and perhaps history's) most important thinker on applied portfolio investment." -- John Train, author of The Money Masters

Benjamin Graham was a British-born American economist, professor and investor. He is widely known as the "father of value investing", and wrote two of the founding texts in neoclassical investing: Security Analysis with David Dodd, and The Intelligent Investor.