[Music]
have you ever thought about investing in
the stock market well today we're going
over the book the Intelligent Investor
by Benjamin Graham Warren Buffett said
this is the best book ever written about
investing Buffett read this book when he
was 19 when the Columbia University and
Benjamin became his teacher so if the
richest men on the planet says that the
book is a great read I think it's
working best in your time in the book
get it in the senior time okay first you
need to understand what investing
actually is all you need to know to get
started is that there are three big
types of investments hold asset classes
in their stocks bonds and cash stock is
just ownership in a company and there
are two ways to make or lose money in
the stock market you see when you own a
stock you actually own a piece of a
company and as the value of the company
increases the stock price goes up but if
the value of the company decreases the
stock price goes down as well
these ups and downs determine the amount
of profit or loss the second way to make
money is when the company shares is your
early profit with you in the form of
dividend stock prices can go up and down
dramatically for all kinds of reasons
as a result stocks are the riskiest
types of investments in your plan
however there is a way to invest in the
market that doesn't leave you at risk of
losing everything
intelligent investing there is a lot of
money to be made through investing but
also a lot to lose
finance history is full of stories of
investors like Warren Buffett who by
investing in the right companies earned
vast amounts of money in return and
they're just as many if not more stories
of misfortune in which people place the
wrong bets and end up losing it all
there are three principles that apply to
all intelligent investors first
intelligent investors analyze the
long-term development and business
principles of the companies in which
they consider investing before buying
any stock a stocks long-term value is
not arbitrary rather it depends directly
on how well the company behind it
performs so be sure to examine the
company's financial structure the
quality of its management and whether it
pays static dividends intelligent
investors use thorough analysis in their
secure safe and steady returns this is
very different from speculating which
investors focus on short-term gains made
possible by market fluctuations
speculations are thus very risky simply
because nobody can predict the future
for example a speculator might hear a
rumor that April will soon release a new
heat product and would then be motivated
to buy lots of April stocks if he's
lucky then this knowledge will pay off
and he'll make money if he is unlucky
and the rumor proved wrong then he
stands to lose a lot in contrast
intelligent investors focus on pricing
this investors buy stock only when its
price is below its intrinsic value don't
fall into the trap of only looking at
short-term earnings look instead at the
big picture by examining the company's
financial history these steps will give
you a better idea of how well a company
performs independent of its value on the
market for instance at company it isn't
currently popular and therefore has a
low share price but shows promising
records an example has earned consistent
profits it's likely undervalued and what
does make a prudent investment second
intelligent investors protect themselves
against serious losses by diversifying
their investments never put all your
money on one stock no matter how
promising it appears just imagine the
horror you would field if the promising
company that you put all your
investments into shows up in the news
for a tax fraud scandal your investments
will lose its value immediately and all
that time and money will be lost forever
by diversifying you ensure that you
won't lose everything at once and to
further remove you from the emotional
stress of investing with the market you
should always stick to a strict formula
when investing Graham calls it formula
investing but it's more widely known as
dollar cost averaging what it means is
that you simply set a fixed budget
you're going to invest every month or
quarter and then invest that into the
stocks you've previously picked no
matter the price third intelligent
investors understand that they won't
pull in extraordinary profits but safe
and steady revenues the target for the
intelligent investor is to meet his
personal needs not to outperform the
professional stock brokers on Wall
Street
we can't do better than those who trade
for a living and we shouldn't be aiming
for fast money anyway
chasing dollar signs only makes us
greedy and careless whether you are just
starting out or you've been investing
for quite some time you always want to
walk the path of the intelligent
investor maybe you won't become a
billionaire in a week but I guarantee
you two can turn your investments into
modest but steady profits if you liked
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anyway thanks for watching and I'll see
you in the next one