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The Intelligent Investor by Benjamin Graham Audiobook | Book Summary in Hindi - YouTube
Channel: Readers Books Club
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Hello friends.
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Welcome back to Readers Books Club.
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Today we will talk about a book,
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"The intelligent investor",
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written by Benjamin Graham,
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which was first published in 1949.
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Graham was an American economist and professional investor.
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Graham is considered as first ever value investor.
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Warren Buffet, who is very famous investor,
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credits Graham with for teaching him investment framework,
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and considers him most influential person after his father.
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With the help of arguments, examples,
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and practical principles,
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The Intelligent Investor has,
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towards the investment decisions of the readers,
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created a mental and emotional attitude.
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You will get to know that with minimum efforts and
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capability also you can get better results.
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If you haven't yet subscribed to our channel,
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then before you are lost in the video,
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immediately subscribe the channel,
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and also like the video immediately.
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By joining our channel,
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you can get benefits of live book workshop.
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Our channel is one of the best summary channels on YouTube.
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Our videos can sometimes be little longer,
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because we never compromise on the content of the video and book,
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therefore it's important to watch the video till the end.
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written by Jeff Walker,
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In this book, a product launch formula is given.
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A famous board game,
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"Wild Craft: An Herbal Adventure Game",
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even after a bad starting,
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was sold using online product launch formula.
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This story is released recently by Money Ephiphany channel.
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Video link is given in the description,
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you can watch the video
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and subscribe and support Money Ephiphany channel.
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The main objective of The Intelligent Investor is,
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to give information on successful investment policy
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to a common person,
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and executing it successfully.
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Those who everyday invest in the market,
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this book isn't for them.
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Neither it's objective is to teach you to beat the market.
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This book can help those a lot
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who want to learn about the investing from the beginning.
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This book is divided into 3 different parts.
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First, who is an intelligent investor,
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and after that, defensive and enterprising investor,
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i.e., aggressive investors are explained in detail.
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So let's begin.
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Who is an intelligent investor?
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Let's start with the most important question.
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Who to invest?
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Because of inflation.
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This destroys our wealth almost 3% a year
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and it's very easy to observe this.
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When inflation rate increases,
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then people depending on a fixed income will suffer a lot
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almost every year.
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On the other hand, those who invest regularly,
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even during the inflation,
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get support from dividend and investment portfolio value.
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So what Graham means by Intelligent Investor?
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It simply means that stay calm and disciplined,
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and be eager to learn.
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You should control your emotions and think about yourself.
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No matter how careful you are,
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your investment value will drop from time to time.
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You cannot remove this risk,
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you can only manage it and control your fears.
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In other words,
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biggest problem and enemy of investors
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are they themselves.
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Therefore you have to emphasize on 3 things:
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How to reduce the unrecoverable loss?
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How to increase sustainable gains?
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How to control self-defeating behaviour,
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that doesn't let most investors reach their full potential?
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The first principle an intelligent investor has to learn is
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that the increase in stock price increases the risk,
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and decrease in stock price decreases the risk.
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An intelligent investor is afraid when market goes up,
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because due to high price,
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then it's difficult to buy the stock .
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While you should welcome the downward market,
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because now the stocks can be sold again.
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Here the margin of safety concept of Graham hits.
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By not putting too much money for an investment,
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your risk of wealth destruction can be reduced.
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It's important to notice that,
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Graham has used the word"Investor" with "Speculator" also.
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Those who invest, earn for themselves,
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and those who speculate, earn for their brokers.
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Investment gives right returns with safety.
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An action that doesn't fulfill this requirement
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is like speculation only.
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We will talk about 2 types of investor next.
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The defensive investor, also known as Passive investor.
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They avoid big mistakes and losses,
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and focus on freedom from continuous efforts,
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troubles, and need to take decisions.
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The enterprising investor,
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also known as active or aggressive investor.
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They like to use their time and focus to select securities,
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which are more attractive than average,
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also, their average returns are more than passive investors.
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It's wise to buy high-grade bonds,
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so is buying different types of leading common stocks
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than any investor can do with minimum or
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no help of an experts.
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Let's understand in details these 2 types of
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intelligent investors.
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The defensive investor.
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A defensive investor,
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even while sitting still, runs a race and also wins.
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Don't buy more because the stock market has gone up,
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and don't sell when it's down.
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In Graham's approach,
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we have to replace guesswork with discipline.
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50% bonds and 50% common stock is a good approach.
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Any change depends on your attitude, risk appetite,
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and circumstances of life.
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If you can take more risk,
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then go in bonds or cash for a minimum of 25%.
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If you can't take risk,
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then have a target of at least 75% in bonds or cash.
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Change these percentages only as per your life circumstances.
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Every 6 months, balance them on an easy-to-remember dates.
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Bonds.
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Bonds have low returns and they are secure and stable.
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Therefore it's wise to stay away from
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low-quality and high-profit bonds.
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Mostly the bonds that investors focus on are saving bonds.
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Bonds, along with monthly income,
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offer cheap and good diversity,
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which, without any commission,
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you can reinvest again immediately at the current rate.
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For most investors,
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bonds funds are better than individual bonds.
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Many firms offer many options of bonds funds at a low cost.
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Common stocks.
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you can be left without
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high-quality common stocks in your portfolio,
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because they protect against the inflation,
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and also give more returns in coming years.
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Graham's rules for common stocks.
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Have common stocks in a right limit,
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but not excessively diversified.
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At least 10 and at most 30.
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Limit yourself to companies with strong financial conditions,
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and that have long records of dividend payments.
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Limit your price for a new issue.
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Around 25 times of their average earnings of past 7 years.
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Not more than 20 time of the last year.
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This strategy eliminates strongest and popular companies too,
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also all the categories of the growth stocks.
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A quick explanation for rule 3.
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Benefits of your portfolio can be lost
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if you pay high price for your share.
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Relatively, big and popular companies are a good option.
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Read financial statements of any company,
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and don't invest in it without estimating it's business value.
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For a defensive investor, mutual funds is a good option
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to get he upside of the stock ownership,
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without any downside,
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where you regularly have to see your portfolio.
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Here, at a low cost,
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you can get good diversification and convenience.
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In this case, to select your stock,
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you are taking a help of a professional.
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Whether market goes up or down,
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you can buy more every week, month, or quarter.
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Index funds.
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Best way is to have a portfolio of index funds.
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Index funds have all the right stocks and bonds.
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This way you can guess where the market is going.
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Practically assume that you can save 5000 per month.
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By having just 3 index funds,
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3000 in stock market,
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1000 where the foreign stocks are held,
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and 1000 in bonds.
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This way,
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you are having almost every investment of this planet,
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that are beneficial to have.
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Every month you buy more.
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If market falls, your already set amount goes further,
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and you buy more shares than previous month.
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If market goes up, your money buys less shares.
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By having your portfolio on an autopilot mode,
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you avoid losing money in a rising market,
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which is more dangerous because buying is costly,
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and refuse to buy in a falling market,
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which makes investment cheap but increases the risk.
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On the performance of an index fund portfolio,
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expecting a 7% average return,
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which costs 0.3% of portfolio's value.
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You should expect 6.7% average returns per annum.
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For a low maintenance stock investing,
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low-cost index funds are the best tools.
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No matter how much a good defensive investor justifies,
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it takes much more efforts to make it batter,
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because here the risk is high and cost is more.
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Hold an index fund for 20 years.
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Add money in it every month,
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and you can beat professional and individual investors in it.
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Graham and Warren Buffet, both praise index funds a lot.
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Even during the worst time of the market,
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some defensive investors enjoy
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the risk of diversion and selecting individual stocks.
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This is the power of disciplined buying.
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In this case, keep 90% of your stock money in index funds.
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Pick your own stocks in 10%.
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Never involve your speculative thinking in investing,
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and don't mix your speculative account's money
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with investing account's money.
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The enterprising investor.
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Aggressive investors also start with the same base
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as defensive investors.
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And id intelligent analysis proves it right,
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then they buy other types of securities also.
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Remember, in investment programme,
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if you use extra knowledge and cleverness,
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then you will ruin it rather than better results.
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Graham gives some points
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that aggressive investors should never do.
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High-profit bonds.
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Foreign bonds.
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If you can take more risk,
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then these will seem more appealing.
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Day trading, where you hold a stock for a few hours,
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the more you will trade, the less you will be able to hold
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Rather, an enterprising investor
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should focus on buying these.
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In low markets, and selling in high markets.
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A good company is not a good investment
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if you pay too much for a stock.
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Carefully chosen growth stocks.
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Don't focus on the growth of the stock
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when they are going best, but when something goes wrong.
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Various bargain issues.
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Temporary unpopularity creates wealth,
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which allows you to buy a good company at a good price.
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Some investors may be expert in selecting their stocks.
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Rest all should take help, especially from index funds.
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If you pay attention,
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Graham advises investors to practice first.
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Start of by spending a year in tracking and picking a stock,
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but not with real money.
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Test driving in your own way
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before investing real money,
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you can make mistakes without bearing real losses.
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Have a discipline and avoid trading.
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Compare your ways with leading money managers,
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and learn what is working for you.
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If you don't enjoy experiments,
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and your chosen options are poor,
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then also you won't be harmed.
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Take an index fund for yourself,
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and avoid wasting your time in stock picking.
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If you enjoyed experiments and earned good returns,
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make a basket of stocks gradually,
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but keep it limited to 10% of your portfolio.
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Keep the rest in an index fund.
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And remember that if your are not interested,
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and returns are bad, then stop.
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A last note to become an aggressive investor.
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Ultimately, financial risk doesn't depend on
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how your investment is,
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rather on what type of investor you are.
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Risk is inside you.
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If you want to know what is risk, step up to a mirror.
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That is risk,
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that you can see in a mirror.
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Successful investment is to manage the risk, not to avoid it.
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So friends we invest because of inflation,
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which erodes our wealth.
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An intelligent investor
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is ready for discipline and learning,
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controls his emotions,
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and manages his fear and risk.
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As soon as the stock price increases,
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they become more risky,
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and they are less risky when price falls.
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When you avoid paying too much for an investment,
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you reduce chances of losing your wealth.
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For a defensive investor,
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50% bonds and 50% common stocks approach is good.
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Hold an index fund for 20 or more years.
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Add money in it every month,
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and you will perform better.
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Thank you friends. I hope you liked the video,
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I hope you could understand
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some details of Intelligent Investor.
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and also comment the video.
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This increases our motivation consistently.
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By joining our channel,
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you can also take benefits of live book workshops.
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