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🎓 #purpose: to determine practical best practices about investment that will allow me to make informed decisions about the shares that I buy and sell
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Core Principles
- A stock is an ownership interest in an actual business, with an underlying value that does not depend on its share price
- The market forever swings between unsustainable optimism (making stocks too expensive) and unjustified pessimism (making stocks too cheap). The intelligent investor is a realist who sells to optimists and buys from pessimists
- The future value of every investment is a function of its present price. The higher the price you pay, the lower your return will be
- No investor can ever eliminate the risk of being wrong. Only by insisting on the 'margin of safety' — never overpaying, no matter how exciting the investment — can you minimise your odds of error
Introduction
- Dollar-Cost Averaging
- Speculation
- Defensive vs. Enterprising Investors
- Anticipating Future Markets
Chapter 1: Investment versus Speculation
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🎓 An investment operation is one which, upon thorough analysis promises safety of principal and an adequate return. Operations not meeting these requirements are speculative.
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Terms to Define