Intelligent Investor

Prologue

            Time and again, It is proved that no man is superior to market. Investing properly and intelligently is one of those rarest traits observed very rarely in the market. Investors are always a class apart from speculators. Speculators may often go wrong in their speculation and that doesn’t do a greater amount of harm to them. But, the case with Investors is different. Investors are not prone to go wrong and once they are, that pulls out a big chunk of their capital and also morale. 

            This series is aimed at differentiating speculators from investors, expose the traits of some of the famous investors and how a common man in the world market can cruise to that level, i.e. Being an Intelligent Investor. Usually, when we start to invest, much of our time and study will be allotted to studying the past patterns of the market, stocks and securities. That is the right way though. An investor should be forearmed with required knowledge about the stock or security he is going to invest and how the stock reacts to various scenarios observed in the market.

            As the great Santayana said “Those who do not remember the past are condemned to repeat it”. The market is the repetition of history. History repeats again and again. All these statements emphasize the importance of historical behaviors of the market and how important it is to understand the history of a particular security or stock prior to investing.


        
   So, who is an intelligent Investor ? He is not the one who has the highest degree possible or the highest IQ than that of Sir Isaac Newton. He is the one, who is patient, disciplined, eager to learn and one who is able to harness his emotions and think through the market. One may wonder what Sir Isaac Newton is doing here in this trading article. If history is to be learnt, it is more important to note that during the spring of 1720, Sir Isaac Newton owned shares in the South Sea company, one of the best stocks of that time in England. Looking at the market movements and the stocks reactions to the market, Sir Newton stated “I could calculate the motions of the heavenly bodies, but not the madness of people” who drive the market. The above observation by Sir Newton is enough to emphasize the importance of investing intelligently and that Investing is not a random process that everyone is capable of performing.

          The intention of writing this series of being an intelligent investor is to learn and in urn teach the readers about how to

             - Minimize the odds of suffering irreversible losses,
             - maximize the chances of achieving Sustainable Gains,
             - Control the self-defeating behavior that keeps most investors from reaching their full potential.

Attribution: Much of my writings and understandings in this series should be attributed to the knowledge I gained from the book “Intelligent Investor” by Benjamin Graham, to whom I am and will always be grateful.