It belongs there...the book is a valuable resource for new investors...understanding arbitrage helps understand valuation and markets...I have given dozens of copies away over the years
Good to see you again Tim. What a great and unique idea to involve your readers in this quest through a dialogue with them - and I see there are a whole lot of very accomplished people who follow you (thanks Substack for the transparency). I'm working my way through The Intelligent Investor. Here's what I have understood so far:
Confusing speculation with investment can be a big mistake. Speculators buy hot stocks based on future growth prospects. Investment, on the other hand, is made on a stringent analysis of the underlying business to ensure the safety of principal and adequate, not outsized gain.
Invest in a stock when you can comfortably own it without following its daily share price.
If you do buy big growth stocks, set strict limits on speculation. Keep a separate speculative account with less than 10% of your capital for speculative activities. Do not borrow from one to the other.
High-growth industries and high-growth stocks are a risky. The growth prospects do not automatically translate into profits for investors because they are often overpriced and the growth may not result in proportional returns.
Avoid Initial Public Offerings. IPOs usually take place in bull markets and lead to inflated valuations. When the bear market begins, these overheated speculative stocks are the first to crash and lead to severe losses.
It belongs there...the book is a valuable resource for new investors...understanding arbitrage helps understand valuation and markets...I have given dozens of copies away over the years
Tim
Thank you for the awesome reading library!!
Tom H Green Bay, WI
Thanks for the shoutout, Tim. You put me in awfully rarefied company!
Good to see you again Tim. What a great and unique idea to involve your readers in this quest through a dialogue with them - and I see there are a whole lot of very accomplished people who follow you (thanks Substack for the transparency). I'm working my way through The Intelligent Investor. Here's what I have understood so far:
Confusing speculation with investment can be a big mistake. Speculators buy hot stocks based on future growth prospects. Investment, on the other hand, is made on a stringent analysis of the underlying business to ensure the safety of principal and adequate, not outsized gain.
Invest in a stock when you can comfortably own it without following its daily share price.
If you do buy big growth stocks, set strict limits on speculation. Keep a separate speculative account with less than 10% of your capital for speculative activities. Do not borrow from one to the other.
High-growth industries and high-growth stocks are a risky. The growth prospects do not automatically translate into profits for investors because they are often overpriced and the growth may not result in proportional returns.
Avoid Initial Public Offerings. IPOs usually take place in bull markets and lead to inflated valuations. When the bear market begins, these overheated speculative stocks are the first to crash and lead to severe losses.
GM