benjamin graham school of value investing

Intelligent Investor: Chapter 15

November 29, 2020 by Laxman Sonale 3 Comments

Hello friend, in today’s article we see chapter 15 of the intelligent investor book. In this chapter, benjamin gram discusses the enterprising investor criteria. These criteria help you to become an enterprising investor in-stock selection. Let’s see chapter 15 of the intelligent investor book.

Previous Chapter 14

6 Criteria for the stock selection:-Intelligent Investor: Chapter 15

Strong financial condition: Each and every investor those are a defensive investor or an enterprising investor sees the strong financial condition of the company. This condition helps you to boost your confidence about the investment, so check for a strong financial condition. (Intelligent Investor: Chapter 15)
Earning Stability: Enterprising investors also check the earning stability and this earning increase by 5 % in a positive way. For this purpose, you can consider the previous year’s earnings.
Dividend Record: Great investor of all time warren buffet says, ” Your investment principle gets from the dividend, and with this dividend, you can invest in other companies. all your investment money comes in dividend form, so check for the dividend record. “
Earnings Growth: with a dividend record enterprising investors also check for the earning per share i.e. earning growth. This EPS increased by 4% in these years as compared to the previous year.
Moderate P/E ratio: You can also for the price-earning ratio. this ratio is not more than 15. If your price-earning ratio is more than 15 so don’t buy that company’s stocks. This type of company takes money from the investor for the trading event. this type of event can be changed every time. (Intelligent Investor: Chapter 15)
Moderate P/B ratio: enterprising investors also check for the price-book ratio. this ratio is not more than 1.5. and also make calculations between the p/e ratio and p/b ratio it’s multiple is not more than 22.5.

we see the 6 criteria for stock selection for the enterprising investor, with this author, gives us some other things that every enterprising investor considers.

how to become a value investor

Other things to consider:

Net-Net result: enterprising investors see the net-net result that means current asset – current liability. making this calculation you get the exact condition of the company.
Special situations: enterprising investors check for the company’s special situations like acquiring the company, novel discovery, etc. (Intelligent Investor: Chapter 15)
Selecting individual stocks is not necessary: If you are very busy with your work so you can hire a broker for your Investment.
Use virtual money to pick stocks: If you are a beginner in the stock market. Benjamin gram recommends you practice for one year with the virtual money to pick stocks. After this, you can use your real money for the investment. (Intelligent Investor: Chapter 15)
Index funds: author give the most advice the buy index funds with minimum charges and invest them each and every month.

after this author gives us the two traits of an enterprising investor, those are as follows:

Disciplined and consistent: Don’t change your approach even if it is unfashionable regarding stock selection.
Pay little attention to what the market is doing: enterprising investor has to focus on what they need to do and how to do it. (Intelligent Investor: Chapter 15)

this is all about the enterprising investor traits and criteria

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Intelligent Investor: Chapter 14

November 25, 2020 by Laxman Sonale 5 Comments

Hello friends, I am Laxman. In today’s article, we see Chapter 14 of the intelligent investor book. In chapter 14, Benjamin gram explains the Defensive investor’s criteria. These criteria help you to pick good return stocks for defensive investors. Chapter 14 of the intelligent investor give some idea for a defensive investor. Those don’t want to give full time for the research analysis. Those criteria as follow.

Previous Chapter 13

7 Criteria for stock Selection:

Adequate Size of Company: Defensive investors have to consider the large size of the company for their money safety. Investing rule no.1 is that Never lose money. If you don’t make money it’s ok but doesn’t lose money. So, for this reason, select the adequate size of the company.
Strong Financial Condition: Sticking with the first rule of investing, you have to select a strong financial condition company. ( Intelligent investor: Chapter 14)
Earning Stability: Defensive investors have to check for the earning stability with continuous five to 10 years, and also check if it goes negative in any year.
Dividend Record: If you are a defensive investor, that means you have to check the dividend record If the company gives the regular dividend and gives slow growth in the dividend.
Earnings Growth: Defensive investor also checks for the earnings growth, which increases 3% in 10 years and 33% in the previous year.
Moderate P/E ratio: Defensive investors also check for the Price earning ratio. This ratio is about less than 15. This ratio, not more than 15. (Intelligent investor: Chapter 14)
Moderate P/B ratio: Defensive investors also check the P/B ratio. This ratio is not more than 1.5.

You have to consider the P/E and P/B multiple is not more than 22. if you consider the above criteria, you will be a good defensive investor. Defensive investors are those that not have enough time to research and not understand the proper accounting. Benjamin gram refer the investors which don’t have time to become enterprising investor, they have to select the longs terms index funds, that have minimum charges. you want to research for the company as a defensive investor you have to consider the above criteria. So benjamin gram gives some due diligence for the defensive investors, they are as follows.

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Due Diligence:- Intelligent investor: Chapter 14

Do your homework: If you want to select stocks on your analysis, you have to read the 5 years annual reports, quarterly reports, and proxy statements. After this, you have more knowledge about the company.
Check out your neighborhood: As a defensive investor, you have to check any investment of institutions investors, that more than the 60%. If the answer is yes then don’t invest in that company. Because when these institutions investors, make a profit they will sell the stocks then stocks price goes down. so for this reason, ownership of institutional investors is not good for individual investors.

This is all about Chapter 14 of intelligent investors.

Read more: The Next Chapter: Click here

How to get rich from nothing in the Stock Market

October 29, 2020 by Laxman Sonale 1 Comment

Hello friends, myself Laxman, to we see How to become rich and wealthy in Stock Market.

In Stock Market, there is only one simple way that makes you rich i.e.Compounding effect. Over the long term, you can become rich and wealthy.

What is the Stock market?

How to Get Rich from nothing in Stock Market:-

There are also different ways but it’s become very risky like Trading( intraday trading) speculating in the Stock market. But we have to make it without taking risks in the money management game. For that process we have to follow simple four steps :

Income
Save money
Investment
Simple living

let’s see in detail

Income:

We have to become rich and wealthy in the Stock market. first, we want is the income source. That income source can be Passive Income or Active Income. In Active Income, we can do the jobs, self-employed work, etc. In Passive Income, we can make a website or youtube channel or any other things you do not work for that work.

Read more about the stock market: Click here

Save Money:

Money is earned by income or any jobs that money we have to save for our Investment purpose. I am personally Save money by avoiding spending money, I am Focused on the Need, not on the want. you can also save money by focusing on the need and cutting down the wants for your life. You can save tonnes of money by simply doing these tips.

Investment:

We have both Income and Saved money. so we have to start making money from money by simple investing. I am personally investing money in the stock market. those who have knowledge of the stock market can invest in that. Those who don’t know about the Stock market they can invest in Good Mutual Funds or the best strategy for the average investor is INDEX FUND these tips are also what Warren Buffett told.

To visit the book summary website: Click here

Simple Living:

We can be rich or poor only depending on the living of our life. We have to become rich and wealthy, we have to remember that when our money makes continuous money. we can be rich in a few

years. For this purpose we have to avoid the Ego boosting stuff, don’t compare it with others. This may be helpful to save money more and more and also help to invest more. These are four simple ways you can become rich and wealthy in a few years.

hey buy the following book to learn about money, to become rich

So this is about how to get rich from nothing in the stock market. hey guys, this looks simple, but actually, very few let’s say only 1% of people do this thing. so don’t take these steps easily, follow these steps seriously.

Charlie Munger Says in his quote, ” Take a simple idea, take it Seriously.”