Intelligent Investor: Chapter 10
Intelligent Investor: Chapter 8
Hello friends, in today’s article we see chapter 8 of the intelligent investor. Investor and market fluctuations, this chapter explains how investors behave and also the market. Warren Buffet(the world’s greatest investor of all time says) ” In intelligent investor book, teach me the two lessons, in chapters 8 and 20.” So chapter 8 of intelligent investors is the most important chapter of all time in Value investing.
previous chapter: Click here
Investor and Market fluctuations:-Intelligent Investor: Chapter 8
In this chapter, the author says there are two ways to make a profit in the market.
- Pricing:
- Timing:
When you make money, you buy a cheap price of stock with a great company. It is the only way you can make money with our value investing philosophy.
When you make money, you time the market.
This job is horrible because you make a little profit of 100 times but you lose a single profit more than the value of 200 times.
So most of the time when you try to time the market,
you go to the speculation side, and the most interesting thing is that you think, you are doing the investment instead of speculation.
This is also called fooling yourself. (Intelligent Investor: Chapter 8)
the author gives us some pointers to remember about the market, they are as follows
When the market goes up:-Intelligent investor: chapter 8
When the market is going up, you are very happy and in that flow of happiness you lose control over yourself,
so the author gives us three important points to ask ourselves about the stock, they are as follows
- Should you sell now? If you ask this question, you get your answer to that.
- should you curse yourself for not buying more, when the price was low?
- Should you buy more now?
This type of question asks you yourself if you get the right answer this answer depends on your behavior and your philosophy.
In my opinion, when you try to sell this stock ask yourself if it’s important now to sell for your financial circumstances, and also the company’s financial circumstances and management.
After this Benjamin gram gives us the famous concept called the Mr. market, let’s see it in detail.
Mr. Market:-Intelligent investor: chapter 8
The author gives us the market is a living thing, and they have human behavior. Considering this concept author gives us some pointers to handle the Mr. market, which are as follows.
- Bipolar Disorder: Mr. market has a disease called bipolar disorder, in this disease Mr. market is happy sometimes and sad sometimes. This disorder is very much harmful to the investor. So this happens with the market at that time you can ignore the market for your protection.
- Mood Swings: Mr. market has two types of mood swings, one is good mood swings and other is bad mood swings, and they want you to behave like that. (Intelligent Investor: Chapter 8)
- Ignore Mr. market: To ignore Mr. market, you have to be very disciplined, and When you want to deal with the market. do when their mood is good, ignore when they have a bad mood.
- Make him your servant: You have to make Mr. Market your servant, not you the servant of Mr. market, This you can do only by ignoring Mr. market.
So dealing with Mr. market you have to control the following things
- Brokerage costs
- ownerships cost
- expectations
- Risk
- Tax bills
- Own behavior
Value investing means controlling your own behavior, If you can’t control the above point you have to the Index fund Investing daily month on month.
this also gives you the best return in the long run. (Intelligent Investor: Chapter 8)
So the author gives us the same point on controlling their own behavior, they are as follows
Advice:
- Our brains are designed to identify patterns: So many people do trading by analyzing the charts of trade and try to identify the pattern by using applied mathematics.
- Don’t check the value of your portfolio frequently: for this, you can consider the portfolio as your house.
- For this purpose you can follow three things: 1) Dollar-cost Averaging 2)Rebalancing 3) signing the investment contract. An investment contract is given in this book, you can see and understand the deep of that contract.
- Tax benefits: For this purpose, you can do the Index fun Investing, is this the best option for the tax benefit? (Intelligent Investor: Chapter 8)
Following this advice you can understand how the market fluctuates and what to do with investors, and also you have to understand the Mr. market.
This is all about chapter 8 of the intelligent investor.
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another financial crisis lesson from 2008
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What is the Stock? it’s advantage and disadvantage.
What is Stock Market? How it Works.
Hi friends, my name is Laxman, In Today’s article, we see what is the Stock Market? How it works, and how common people invest in the market, let’s begin.
What is the Stock Market?
The stock market is the Market, like other markets like the groceries market.
let’s understand with the Example Geeta is women want the fresh vegetable for cooking in dinner meal, so they go to the market, buy some vegetables and fruits from the seller and give them a value of that vegetable in the form of money. then that night she make a meal for dinner. Again she woke up tomorrow then she decided to buy company or pieces of company i.e. Stock
for this purpose she goes to the Stock Market, in this market instead of seller there is the broker who sells the stock of the business and buys also, So she gives the money to him to buy the ABC Pvt Ltd. company stock, whatever the stock price in that time. The same things happen in this market.
What are the BSE and NSE?
BSE and NSE are the most famous STOCK EXCHANGE in India.
- BSE (Bombay Stock Exchange): Bombay Stock Exchange is also the Stock exchange, in this exchange we can buy a stock or sell stock on this exchange. The main index of this company included in the Bombay Stock Exchange is SENSEX. Sensex includes the Top 30 companies which have well-established and good finance.
- NSE (National Stock Exchange): Nation Stock Exchange is also the Stock Exchange, in this exchange we can buy or sell the stock. This exchange’s main index is NIFTY-50. Nifty-50 includes the Top 50 companies of India which have a well financial background and are well established.
Read also this blog: Click here
How to Invest in Stock Market? (What is Stock Market?)
Invest in the Stock market we Required following Document:
- Bank account
- PAN card
- Identity proof i.e. Adhar card
- Trading Account
- Demat Account
- Most important MONEY
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- Bank Account: The Bank account of any nation Bank. SBI, HDFC, Axis Bank, etc. in good condition.
- PAN card: Pan card is required for the legal purpose and also for Tax purpose
- Identity proof: The identity proof you can give the Aadhar card proof with a mobile number attached.
- Trading Account: This account will open by providing the above-mentioned documents and this account is only open by broker. there are two types of brokers 1. discount broker 2. charged broker let’s see the next post about the broker.
- Demat account: This account is open with the trading account by a broker. in this account, we can put all stock in virtual form.
- Money: Money is the most important thing in this matter, so put more than 10000 rupees in the bank account for the investment.
This is all about the What is the Stock market? how it works, in next post we see what is the important pillar of the Stock market.
Open a Free Demat( trading ) account from the following link:-
Following are some discount broker, that gives you a free Demat account. specially Upstox.
let’s see one by one
1) Upstox
Open Demat Account link:- Click here
2) Angel Broking ( Angel one:-
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3) Zerodha:-
Open Demat Account ( link):- Click here
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