Market looks pessimist and offers you either to buy his stake or sell your stake at suspiciously cheaper prices.Īs an intelligent investor, you should ignore the market trend in the short term. Market knocks your door enthusiastically and offers you either to buy his stake or sell your stake at an astronomically higher price. Market knocks at your door daily quoting different prices of various securities. Market plays with the emotions of individuals. Market as a person whose mood swings between optimistic and pessimistic. Market plays with the investorsīenjamin Graham stated Mr. By applying the margin of safety you diminish the potential downside risk significantly. But you applied a margin of safety of 30% and buy the security when the security’s market price is $70. You have found that security is currently trading at $100. Suppose the intrinsic value of the said security is $60. You need to analyzing the qualitative factors namely, management, corporate governance and quantitive factors namely, assets, earnings, you have calculated the true value i.e. Let’s make it clear with the following example. What is the Margin of Safety and how to calculate it?

Focus on safe and steady returns between 12% and 15% a year over the long term.

Diversify the investment portfolio to protect yourself from severe losses,.

Evaluate a company on various parameters before investing,.

To become an intelligent investor you should follow the 3 principles, Defensive Investor.Īccording to Benjamin Graham, roughly there are two types of investors namely Investors and Speculators.

What is the Margin of Safety and how to calculate it to diminish significant losses,.

The difference between an Intelligent Investor and a Speculator,.

By reading this book a novice investor will learn, ‘The Intelligent Investor ’, by Benjamin GrahamĪfter spending decades in the stock market ‘Father of Value Investing’, Benjamin Graham delivered the insights and wisdom in this book. Here are the top 15 stock market books India that you must read.

By reading the stock market books for beginners you not only improve your investing knowledge but also maximize your chances to get better returns from the stock market over the long run.

But without understanding the basics of investing you will get identical results as playing poker without looking at your cards. Historically, the equity asset class has outperformed all asset classes over the long term.

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