Intelligent Investor
As Warren Buffett said, to invest successfully over a lifetime does not require a stratospheric IQ, unusual business insight, or inside information. What is needed is a sound intellectual framework for making decisions and the ability to keep emotions from corroding that framework.
If we look at what Benjamin Graham said we will understand where we need to keep our emotions under control. Graham developed few principles which we tend to forget very easily. Those principles are;
A stock is not just a ticker or an electronic blip; it is ownership in actual business, with an underlying value that does not depend on its share price.
The market is a pendulum that forever swings between unstable optimism and unjustified pessimism. The Intelligent Investor is a realist who sells to the optimists and buys from pessimists.
The future value of every investment is a function of its present price. The higher the price you pay, the lower the return will be.
No matter how careful you are, the one risk no investor can ever eliminate is the risk of being wrong. The margin of safety will help not to overpay no matter how exciting an investment seems to be, helps you to minimize your odds of error.
From all these things we can understand, the secret of successful investing is within ourselves. If you become critical thinker and be patient confident, you can take the steady advantage of even the worst bear market also. By developing our discipline and courage, we can refuse to let other people’s mood swings govern our financial destiny. Last but not the least, how your investments behave is much less important than how you behave.
Save, Invest, Spend and Be Happy
