15 Quick Rules You Need to Know That Will Make You A Smarter Investor

Ideas that get more true over time are fascinating. Benjamin Graham’s book The Intelligent Investor was published in 1949 and it still rings true today, maybe even more so today than in 1949. With the advent of the internet it’s never been easier to get swept up in group think euphoria.

Most of these quotes from the book seem incredibly simple and obvious, but how many times do we find ourselves breaking these rules? It’s very easy to get caught up in the hype of something, big crowds attract bigger crowds and in no time there are thousands of onlookers who don’t really know what they are looking at , but the social proof around them keeps them there. It’s important to look beyond the mainstream.

**When he refers to ‘Mr. Market’, he is using that as a symbol to portray the mainstream consciousness.

Top 15 Rules From Benjamin Graham’s book The Intelligent Investor

  1. The investor’s chief problem – and even his worst enemy – is likely to be himself.  (pg. 8)
     
  2. Mr. Market’s job is to provide you with prices; your job is to decide whether it is to your advantage to act on them. You no not have to trade with hime just because he constantly begs you to. (pg. 215)
     
  3. We have not known a single person who has consistently or lastingly make money by thus “following the market”. We do not hesitate to declare this approach is as fallacious as it is popular.  (pg. 3)
     
  4. Investing isn’t about beating others at their game. It’s about controlling yourself at your own game.  (pg. 219)
     
  5. Although there are good and bad companies, there is no such thing as a good stock; there are only good stock prices, which come and go. (pg. 473)
     
  6. A great company is not a great investment if you pay too much for the stock.  (pg. 181)
     
  7. Without a saving faith in the future, no one would ever invest at all. To be an investor, you must be a believer in a better tomorrow.  (pg. 535)
     
  8. It is absurd to think that the general public can ever make money out of market forecasts. (pg. 190)
     
  9. In the financial markets, hindsight is forever 20/20, but foresight is legally blind. And thus, for most investors, market timing is a practical and emotional impossibility. (pg. 180)
     
  10. Losing some money is an inevitable part of investing, and there’s nothing you can do to prevent it. But to be an intelligent investor, you must take responsibility for ensuring that you never lose most or all of your money.  (pg. 526)
     
  11. People who invest make money for themselves; people who speculate make money for their brokers. And that, in turn, is why Wall Street perennially downplays the durable virtues of investing and hypes the gaudy appeal of speculation. (pg. 36)
     
  12. Never mingle your speculative and investment operations in the same account nor in any part of your thinking. (pg. 22)
     
  13. Successful investing is about managing risk, not avoiding it. (pg. 535)
     
  14. We urge the beginner in security buying not to waste his efforts and his money in trying to beat the market. Let him study security values and initially test out his judgment on price versus value with the smallest possible sums. (pg. 120)
     
  15. In an ideal world, the intelligent investor would hold stocks only when they are cheap and sell them when they become overpriced, then duck into the bunker of bonds and cash until stocks again become cheap enough to buy. (pg. 179)

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