This week I read the Intelligent Investor by Benjamin Graham! First published in 1949, the book is a widely acclaimed classic on value investing. Packed with actionable instructions and sound advice It teaches the reader how to successfully use value investing in the stock market. Historically, the book has been one of the most popular books on investing and Graham’s legacy remains.
A key point graham makes is that Investing well over the long term does not require incredible intelligence or profound insight. Instead, it requires two things:
- A rational framework for decision making and,
- The ability to prevent your emotions (and the emotions of others) from overriding your common sense and defined plans.
With these two things in place – combined with patience and discipline – investing successfully is possible for anyone!
Here are some other Things that Matter when investing intelligently.
- Choice matter. A stock is not just a mere object you trade. It is a piece of ownership in a business. Make sure you understand both the business and the company before investing!
- Price matters. The more you pay for a stock, the lower your return. Don’t fall into the trap of thinking you can buy anytime at any price and still make a profit!
- Market conditions Matter. The market has constant mood swings. At times, it is over-optimistic, which makes stocks too expensive. At other times, it is pessimistic, which makes stocks cheap. The key is to buy from pessimists and sell to optimists.
- A “margin of safety” matters — never invest more than you can afford to lose.
If you want to learn more, you can check out our animated summary of the book; you can watch it here:
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