We can learn many valuable lessons and knowledge
Excerpt from "The intelligent investor" by Benjamin Graham
Margin of Safety
- Always leave a gap between the real value of the asset and the price you pay. This helps to minimize risk when the market fluctuates or when your prediction is not completely correct
Distinguish clearly between investment and speculation
- Investing is based on thorough analysis and aims for sustainable profits, while speculation is the attempt to profit from short-term fluctuations, often accompanied by high risks.
The market is the servant, not the master
- Think of the market as a fickle neighbor, ready to buy or sell your assets. Don't let the market's erratic behavior influence your investment decisions
Long term investment is the right way
- Don't be tempted by quick profits. Being patient and focusing on the long-term goal will help you avoid making bad decisions
Focus on intrinsic value
- The intrinsic value of a business is more important than the market price of its shares. Invest in companies with solid fundamentals and long-term prospects
Control your emotions when investing
- Greed and fear are the two biggest enemies of investors. A smart investor always stays calm and does not get carried away by the emotions of the market
Diversify to reduce risk
- Build a portfolio with a variety of assets to limit the risk of betting too much on one stock or sector
Learn how to protect yourself from potential risks
- Be wary of “too good to be true” investment opportunities and advice from unreliable sources. Always rely on your own analysis