The Intelligent Investor

Question 1

What are the principals of value investing?

Answer 1

1. A stock as an ownership stake in a business and its value is separate from the share price
2. Sell to optimists and buy from pessimists
3. Future value is dependent on present share price- the higher you pay, the less your return will be
4. Margin of safety- never overpaying is the only thing that decreases your chance of being wrong
5. Don’t take any wall street facts on faith and invest with patient confidence.

Question 2

What does ghram focus on in the book?

Answer 2

1. Risk management through asset allocation and diversification
2. Maximizing probabilities through valuations analysis and margin of safety
3. Disciplined approach to avoid consequential error

Question 3

What are the three things an intelligent investor must do?

Answer 3

1. Analyze business for soundness
2. Have a calculated plan to avoid severe loss
3. Pursuit reasonable returns