Warren Buffet “How To Get Rich In The Stock Market”
1. Focus on the underlying business rather then seeing companies as stock ticker symbols
2. Don’t buy stocks at elevated valuations. Cash is a position. Always keep cash on the sidelines for market down turns to take advantage of opportunities.
3. Don’t try to time the stock market. There are periods of economic booms and busts. Stay the course. A loss will translate into gains over the long term.
4. Stay invested. Investment returns will smooth out over time. Especially over longer time periods.
5. Go shopping! As share prices are collapsing wonderful businesses are on sale. Stock market crashes are one of the rare times these wonderful businesses can be purchased at amazing prices. Extraordinary opportunities present themselves.
How to make millions through Benjamin Graham’s eyes.
Key Arguments put forth by Benjamin Graham in the intelligent Investor:
1. A stock is not just a ticker symbol or an electronic blip; it is an ownership interest in an actual business, with an underlying value that does not depend on its share price.
2. The market is a pendulum that forever swings between unsustainable optimism (which makes stocks too expensive) and unjustified pessimism (which makes them too cheap). The intelligent investor is a realist who sells to optimists and buys from pessimists.
3. The future value of every investment is a function of its present price. The higher price you pay the lower your return will be.
4. No matter how careful you are, the one risk no investor can ever eliminate is the risk of being wrong. Only by insisting on what Graham called the “margin of safety”-never overpaying, no matter how exciting an investment seems to be- can you minimize your odds of error.
5. The secret to your financial success is inside yourself. If you ecome a critical thinker who takes no Wall Street “fact” on faith, and you invest with patient confidence, you can take steady advantage of even the worst bear markets. By developing your discipline and courage, you refuse to let other people’s mood swings govern your financial destiny. In the end, how your investments behave is much less important than how you behave.
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