ABOUT THE BOOK:
Blog Title: The Intelligent Investor Summary | Review By Benjamin Graham
Name: The Intelligent Investor
Author: Benjamin Graham
Download Audio Book For Free at: Audible
Book available in English at: Flipkart, Amazon
Book size: 640 pages
You can earn money through 4 ways first by doing a job , second by doing something your own in simple way by being a self-employed, third way by creating a business and fourth way is by doing an investment, now through these ways you can earn money, no doubt, but how much money you can earn through these ways, it’s a very important question and you must think about it. First two options which I shared with you’ll are an active source of income, means you can earn money through those ways only till the time you work and give your time to it. The minute you stop doing work is the time you will stop earning money, and the other two options, which is creating a business and Investment are a passive source of income. This means to earn money in such a way where you don’t have to work always, and even if you stop working, still you will able to get money, such as through pension.
Listen to Audiobooks of The Intelligent Investor Summary from here for FREE
World’s richest people able to become rich or billionaire wither by doing or creating their own business or by doing an investment, and this is a fact, hence even if you want to become rich and successful and want to earn passive income, then even for you doing a business or doing an investment can be the best option. I usually upload videos related to business, Which you can see by clicking on the screen or by going to business playlist, which will for sure help you and share some useful tips through which you will learn to become champ in any business, I have shared its link in the below description link as well as on comment section. But I haven’t talked much about investment, which can be more beneficial for passive income compares to business, so today we will talk about and learn about investment.
Warren buffet world’s second richest person and also known as no. one investor, says if you want to learn about investment, then The Intelligent Investor is the best book which you must read because even he gave his success credit to this book. This book is written by Benjamin Graham who was the mentor of warren buffet, so we must learn and understand this book properly.
After hearing a word investment, most of the people would think, it means to invest in mutual funds, or on stock or insurance or on sip etc, and all these things are really complicated, which require lot of knowledge and brain, but warren buffet doesn’t believe this, in the starting of the book under preface warren has mentioned to be a great investor you don’t need to have a high IQ or don’t need to be intelligent, just by making your fundamentals strong you can become a good investor, which you will be able to learn through this book. So today I will share The Intelligent Investor Summary/Review.
So let’s begin with The Intelligent Investor Summary:
The Intelligent Investor Summary Point 1. Speculator vs investor
If you want to become an intelligent investor the very first thing you need to do is to become a real investor, not a speculator, there are three major differences between a speculator and investor.
First- speculator listens to the things being exaggerated and gets excited, and buy the stocks which prices are going high, without knowing much about the company.
Whereas the real investor, before investing their money they first understand company very nicely and thoroughly analyze about that company, what actually their business is about, how they are earning money, whether company able to earn money this way in the future as well, they analyze all these things before investment.
Second thing- speculator wants returns very fast, meaning when they invest money in any business or in stock, they want their 50 percent or more than that in return, within a year.
Whereas investors understand to get a genuine return which is beneficial for a long time, it takes time, and they expect an adequate return, and what exactly adequate returns are author hasn’t told us about it, but it might be 11 to 20 percent returns.
And the Third last difference is- speculator doesn’t think much about the safety of principle, here principle means the money they invest, speculator thinks much about the returns which they will get on their money. They don’t think much about the safety of the money which they have invested.
Whereas investors first think about the safety of their money which they are investing, they don’t buy things which have more value in a market but less in actual. They actually buy stocks which contains more value.
And because of such reasons real investors able to make much money through stocks by taking it as an investment opportunity, whereas speculator takes it as a gambling and ends up losing their money.
The Intelligent Investor Summary Point 2. Inflation
Whenever middle-class people or lower-middle-class people get more money, they keep it safe by hiding it under the closet, and many times, they don’t even remove that money for years, by thinking that their money is safe inside the closet. But is it really safe their? You all must be aware of the inflation and how things are getting high at prices, but how much does it impact our savings and earning you must not be aware of it or haven’t thought about it.
Example, suppose you have 1 lack of rupees, which I ask you for a year, you have trust in me, so you give that money to me, now after 1 year I return you your money, but deduct 8 thousand rupees from it, and says I save your money for 1 year, its charge for that, will you like it? I don’t think so. Now understand Inflation in India inflation has reached up to 9.5 percent, if you have kept that 1 lac rupee in your home inside the closet that year or before some year, then that money has reduced its value by 9.5, just within a year.
Hence it is best not to keep or hide money inside your home, instead invest that money somewhere, the bank is good for some people, but usually, the bank gives fewer returns. Somewhat around 6 percent or less than that, and if inflation goes above 6 percent, then you will face loss there as well. Whereas if you invest in stocks by doing a proper research and by getting a thorough knowledge or by reading this book properly you can get good returns. One more important thing, don’t invest before reading the entire points and principles from this book, so do read this book thoroughly and completely.
The Intelligent Investor Summary Point 3. Opportunities
Through investment, you can earn money in two ways, first by purchasing a stock at fewer prices or by purchasing a stock at the right time and to sell it at the right time. Now People who try to earn money through timing are usually speculators, because an intelligent investor understands that predicting future is nearly impossible, to claim on future things is difficult and also not good, to buy something by keeping it pricing in mind can give a lot of money in return.
Warren Buffet has mentioned three important points at the start of this book, in which our result depends, the first point is your effort second is your research and the third is market swings. Market swing is an opportunity to make money, usually what happens, when market performs well, normal people and speculators starts purchasing stocks, so that with the growth they can earn profit, but when market growth decreases, they start selling their stocks to avoid their loss, whereas intelligent investors do exact opposite of it, they purchase stock when market goes down, because at that time they able to get that stock at low price, and sell their stocks when market grows and normal people speculators starts buying such stocks at higher prices.
Now it is not as simple as it sounds, intelligent investors keep every small detail in mind, as mentioned in the book, don’t sell all shares, must hold 25 percent shares etc. you must have understood, when everyone runs behind profit at that time be calm or sell and when everyone is running from the fear of loss, then buy but to remind you’ll again, only after understanding each and every fundamental of this book, do such things. Because you must be aware of each and every detail because it’s really very important to have entire knowledge about such investments.
So now to end I have shared this knowledge from the book the intelligent investor by Benjamin Graham, so if you have interest in investment or generating interest then do read this book said by warren buffet.
Get The Intelligent Investor Summary book from the following links: