Intelligent Investor: Chapter 3

Hello friends, I am Laxman, today’s article we discuss chapter 3 of intelligent investors. In this chapter, the author gives us some pondering points to think for while doing investment. Let’s see step by step of chapter 3  of the intelligent investor book.

Previous Chapter 2

A Century of Stock Market History-Intelligent Investor: Chapter 3

In this chapter Benjamin gram give us the people how to consider the history of the investment, In the investment, process the author gives some important points to be related to history. let’s check one by one.

• Never forecast future by extrapolation past: In investment, you don’t have to consider the past whatever happens in the past, but in trading, some people say history is happening again and again with another door, for this thinking warren buffet say’s” History teaches us that people don’t learn from the history”, so for this don’t forecast future by extrapolation past. (Intelligent Investor: Chapter 3)
• It’s doesn’t matter what price pay, if you hold them for long: If you make an investment for a long time. It gets you a good return, But actually, Price matters most but people don’t consider this. If you buy a stock at any price then if you hold for the long term. they can not give you a good return. So first check the price of the company and bargain on that price.

Read more about bargain: Click here

• Profit is finite, so should be the investor’s willingness to pay: In this point author, say’s that profits are limited so considering this. you have to pay the right price for the right things that are famous. the author gives the example of Micheal Jordan, he was a very famous guy so that reason they attract maximum cloud. So one company give them 3 million Dollars for one event. That’s means it’s not justifiable that give them maximum money of more than 3 million Dollars, just because he was a very famous guy. At this point understand the real value of things, when doing investment. (Intelligent Investor: Chapter 3)
• Experts have been proved wrong: In history shows that those who are certain about his future those people are maximum time wrong and most surprised peoples. So there is no guarantee of happening whatever experts told, so don’t believe in people or experts regarding your investment.

authors give us some takeaways to consider our investment in good condition. let’s see one by one

1. The only thing past teaches us that the future will surprise always us.
2. Only things you can be sure of being wrong
3. The market will surprise the very people who are most certain
4. So, be humble about your forecasting power

 

about takeaways give us the path to be considered regarding the future of our investment. (Intelligent Investor: Chapter 3)

This is all about the Intelligent investor: chapter 3, in the next article we see chapters 4 and 5.

Read more: how to get rich: click here