Hello friends, today article we see what is the enterprising investor and there quality that help to get success, this qualities form the intelligent investor book, In the article, we discuss the enterprising investing, their quality needs to get success from chapter 6 and 7 of The Intelligent Investor book. let’s see step by step.
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Enterprise Investor need qualities to success:
To become enterprise Investor, you have to face to two challenge they are as follows
- Enterprising Investing is physically, intellectually challenging
- It requires lots of time and lots of energy.
the author gives some knowledge required to become an enterprise investor. an enterprise investor is not doing trading all the days. So for that purpose author give some point regarding the day trading to become an enterprise investor. (Enterprising investor need qualities to success)
Day Trading:-(Enterprising investor need qualities to success)
- Day trading as financial suicide: When you are doing trading, we have to sell the share on that day. It becomes some time risk and the maximum time you lose more money, for this reason, the author says about this on day trading.
- The broker always makes money: In day trading broker is always makes money, they make money when you buy. And also when you sell the share of the company.
- Difficult to Brake even: Day trading is very hard to give up from those things when you doing that. In this process you try to convince yourself to you can do better. (Enterprising investor need qualities to success)
- Some bets you win, but most you lose: In day trading some time you win by your luck, and the maximum time you lose the tonne of money in day trading.
- Patient investors get to keep almost everything.
- Say no to IPOs is probably overpriced: In IPO’s people decide the price of share with his optimistic point of view, they think someone else sits in the market to give me more money on share. So the reality is that market is the Voting machine in the short term and weighing machine in the long term, so say no to IPO. (Enterprising investor need qualities to success)
The author gives us some pointers to be considered as an enterprise investor, they are as follows:
Some knowledge of Enterprise investor: (Enterprising investor need qualities to success)
- Pay attention to value, not price: Market is the voting machine in the short term, so pay attention to the value, not on price, price can be fluctuating or manipulate by some trader.
- Be wary of stock with good prospects: Buy the good stocks of a company with good prospects.
- P/E < = 25: Price earning ratio is less than the 25 not only one year, you can take it for five to seven years of average earning. (Enterprising investor need qualities to success)
- Look where others are not looking.
- To obtain better than average results, remember: 1) Approach should be different from others 2)Company should pass the test of soundness
After this author gives us some recommendations to looks for the opportunities, they are as follows.
Where to look for opportunities(Three Recommendations):
- Relatively unpopular large companies
- Purchase of bargain issues: In this, you get the bargain issues by doing Current asset – total Liabilities = intrinsic value, so you can get the good opportunities here. (Enterprising investor need qualities to success)
- Special situation: when the bear market time you get the maximum opportunities that have good prospects. say no to the preferred stocks.
After this explanation author gives some advice that relates the ideal word for Intelligent investors. they are as follows.
- Can’t time the market: most people do that but it not run the intelligent investor.
- A great company is not a great investment if you pay too much for it: so you need maximum return then buy the small company with good prospects.
- The sale and market cap of small company double easily.
- Invest in big companies when something goes wrong.
- Don’t put all eggs in one basket.
- Great fortunes are made by concentration but not stable for the long term, so put your egg with different companies also. (Enterprising investor need qualities to success)
So if you follow this advice you will become an enterprise investor, lastly, the author gives us some recommendations they are as follows:
- Research stocks that have hit a 52-week low
- Invest in foreign stock also.
Read more: One up on wall street book summary
This is all about the enterprise investor of chapters 6 and 7 of the intelligent investor book.
To visit the book summary website: Click here