Intelligent Investor: Chapter 18

December 1, 2020 by Laxman Sonale 1 Comment

Hello friends, in today’s article we see chapter 18 of the intelligent investor, which is on A comparison of eight pairs of companies. In this chapter 18 author give the different types of companies, and which one we have to choose. so let’s see chapter 18 of the intelligent investors.

A comparison of Eight pairs of companies:-Intelligent Investor: Chapter 18

Benjamin gram gives us eight pairs of companies and also explains which one is good and bad. so let’s see the pairs of companies as follows.

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About the pairs:

REIT and REOC: These are two companies, in this REIT is a good stable company and provides the maximum dividend. In REOC companies, they take the dept and don’t give the maximum dividend. Remain with his dept they buy the asset capital which appreciates in the future. In the long term, REIT is a good performance as compared to the REOC. (Intelligent Investor: Chapter 18)
Value Stocks vs Growth Stocks: One is value stocks and the other is the growth stocks. In a short period, the value stocks perform poorly, and growth stocks perform well. But value stocks outperform in the long term as compare to growth stocks.
Bothe overvalued: Both companies are overvalued. One is more overvalued than the other companies.
One overvalued: One company is overvalued, but still went 35% up from that level. So the author gives us advice, is don’t short sell, like these companies. Because we don’t know how much time these companies stay overvalued.
One company successful but highly overpriced other companies cheap but poor fundamental: Both companies are not good investments. (Intelligent Investor: Chapter 18)
One was a publication: In this period this companies IPO is overvalued and which stocks fell later and other companies have a reasonable investment. in that other companies perform well in the long term.
One was a conglomerate: In conglomerate companies, these companies buy the shit loads or shitty modes of financing. After a few years, these companies sell some shit loads because they not perform well, so don’t buy like these companies. Another company is a diversified portfolio, and this company does well in the long term.
One didn’t pay dividends in 13 years and had acquired 24 companies: This type of company is not good for the investment, because these companies not have the focus vision with his companies. so stay away from it.

so this is all eight pairs, with that, the author gives some advice, they are as follows

Some takeaways:

sometimes there are good cause and bad cause of the company.
In the stock market, there are no such things as good stocks.
There are only good stocks price which come and go.
For example, one company discovered that rear cancer recovery drugs. Another company is a garbage company. (Intelligent Investor: Chapter 18)
In these companies, people think the rear cancer discovery drug company does well, but actually, they found the very less customer to treat whatever the treatment price as compare to the garbage company. So the author said, ” In the short-run, a market is a voting machine but in the long run it’s a weighing machine.”

So there is all about chapter 18 of intelligent investors.

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