viernes, 23 de octubre de 2009

Market evolution. Jorge de Lalama. Chapter V. The intelligent investor Benjamin Graham. Part I.

To invest successfully over a lifetime does not require a stratospheric IQ, a special business knowledge or inside information. What is needed is an intellectual infrastructure that enables decisions and the ability to keep emotions that infrastructure deteriorate. This book sets out in precise and clear that we need infrastructure. To you to take the emotional discipline.

The more irrational market behavior is, the more chance an investor to behave professionally.

"An action is not a simple symbol in a table of contribution or an electronic pulse, is an ownership interest in a real business with an underlying value that does not depend on share price.

"The market is a pendulum that constantly swings between unsustainable optimism (which makes the shares are too expensive) and unjustified pessimism (which makes them too expensive). The intelligent investor is a realist who sells his shares to optimists and buys from pessimists.

"The future value of investments is a fraction of its current price. The higher the price you pay, the lower the yield to be obtained.

"The secret of financial success is inside the person. If you become a critical thinker who does not accept any act of merado securities as an article of faith, and if trust is invested with a patient, it may take a good game steadily, even during the worst periods of the market bears. Developing the discipline and personal courage can prevent moods of others governing the personal financial destiny. Ultimately, the investment behavior with a person is much less important than the behavior that this person.


Those who remember the past are condemned to repeat it.

In our experience and observation of the stock market, which covers more than 50 years, we have not met a single person who has consistently made money or durable apply that principle to follow the market. We have no hesitation in asserting that this approach is as fallacious as popular.

The obvious physical growth prospects of a sector do not translate into obvious profits for investors.

The main problem of the investor, and even his main enemy, is likely to be the same.

The habit of relating what is paid to what is offered is a valuable feature when it comes to investing. Ask: How much?.

The results of published predictions of the stock market produced by brokerage in respect of which there are eloquent proof that their estimates, based on complex calculations, have been less reliable than if they had been prepared merely to throw a coin.

There is evidence that a high IQ and high educational background are not enough to make an intelligent investor. In 1998, Long-Term Capital Management LP, a hedge funds run by a battalion of mathematicians, computer scientists and two Nobel-winning economists, lost more than $ 2,000 million within weeks, to bet a huge sum to which the market bond return to a normal situation. But the bond market continued to use his position was increasingly abnormal and LCTM was indebted to a level such that bankruptcy was about to sink the global financial system.

The question of being a smart investor is more a matter of character than brain.

While the enthusiasm may be necessary for great accomplishments elsewhere, on Wall Street almost invariably leads to disaster.

The judgments of others can not be imposed on their own.

Although it seems straightforward to predict which sector will grow faster, that foresight has no real value if most other investors do not provide the same.

Stocks are less risky as their price falls.

The intelligent investor dreads a bull market in shares faces and is positioned in bear markets.

An investment operation is one which, after a thorough analysis, promises safety of principal and an adequate return. Transactions that do not meet these requirements are speculative.

Never mix your speculation and investment operations in the same account, or any part of the process of reflection.

Interest payments of the obligations of good quality are better protected and therefore are more secure than cash dividends and revaluation of the shares.

Rarely can make reliable predictions on price changes in absolute or relative terms.

The defensive investor should be limited to the actions of major companies that have a long history of profitable operation and is in a sound financial position.

Averaging the cost in monetary units, which simply means that whoever uses this method invests in shares the same number of units each month or each quarter. This buys more shares when the market is at its lowest point that it acquires when it is on a high point, and most likely eventually get a general satisfactory price for their entire portfolio.

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