‼️ The Intelligent Investor by Benjamin Graham ‼️

 30/∞

Rating: ⭐️⭐️⭐️⭐️⭐️

“By far the best book on investment ever written.”

Warren Buffet

Not a long time ago I have said: “If Bill Gates or Warren Buffet reads a certain book, I want to read it too and see why they have read it.”

Der Kaiser was super busy lately! Moreover, this book is quite voluminous and complicated. In the past I did one mistake: I was trying to understand everything way too quickly. Good book and great teachings, need time to sink in. Since, there is no lockdown no more, the borders are open and the “Covid curtain” has fallen I enjoyed doing things I normally enjoy when the world is not fucked up by covid-mania.

Let’s put this book into the context and compare it with some of other books on how to get filthy rich and never have to work again.

...

To be honest I actually like work, but I like to ensure nobody has an edge over me. I prefer total freedom and independence. Growing up in post-communist country taught me to be cautious. Especially, when it come to raking up the profits and not sharing with others.

Before I start. I have to stress one thing! This book is not dealing with how to get rich. It deals with risk management while investing. So if you are like: Hey! I’m going to read this book and get rich as fuck!” Then forget it! This book will merely advise you how to not act stupid on the bull market.

In the other words, no matter how many books on investing you are going to read, you still might get raped by the bull market straight in the ass! Not because you are damn fuck, but because there are many things in universe we just cannot foresee. Anyway, I was about to put this book into a context.

Rich Dad and Poor Dad is one of my Bibles. I do not believe in the God, but luckily I believe in the God of all Gods: Capitalism. Rich Dad and Poor Dad is a book which won’t tell you a loads of scary things to watch out for while making an investment. This is what I just learnt: 

IPOs are rip offs

There was this time when Coinbase was about to enter stock market. For those who are not familiar with Coinbase, Coinbase is a cryptocurrency trading portal. There was a massive hype about the Coinbase's stock. I was like fuck! I gotta get some. Coinbase’s IPO was postponed for quite a few times (this accelerated the hype and greed in the public). The stock started to sell at 420 USD per share. Nowadays, Coinbase trades for about 224 USD per share. Lesson learnt?

Do not buy stock when it just came out. Wait at least a couple of months and see what the real price of the stock is going to be. The market will appraise the stock's value for you. IPOs are usually overpriced.

There are some exception from the history. E.g. Microsoft, Amazon etc… But they are rather exception than a principle.

Behemoths of the market

Let’s stick up to Amazon. Let’s say Amazon’s shares are trading around 3400 USD per share atm. Imagine you have bought them in 2000s. Since then you gained a massive profit. But let’s say you where at the fucking kindergarten in 2000s and you just did not have the means to invest in Amazon and you want to invest right now. What you should know? E.g. the bigger the company gets, the less likely it is to continue to grow and get similar profits as in the past. In the other words, Amazon grew up, you missed that investment opportunity and perhaps you should start to look for some other companies.

Premium stock

This concerns both the Blue Chip stock (Apple, Microsoft etc.) and Dow Jones Industrial Average (DJIA). In the other words companies like Coca-Cola, McDonalds etc.

We can say that this stock is quite secure, but it usually sells 5% above the net worth of a particular company. In the other words, this stock is sold 5% way too expensive. Once your stock grows by 5%, it matches the real price it should have been sold.

Financial Shenanigans

You won’t believe how smart are people in manipulating the stock price! It is fucking unbelievable! E.g. CEOs of big companies will rise the price of the stock in a short-term to sell their own stock and reap a massive corporate payouts! Which is not good for financial health of a company.

How to pick a “fund” (mutual / index fund)

There is literally a guide on what questions to ask and how to asses which mutual fund is a good one. I won’t go down into it. I’m only going to say: “The more are the expenses, the worst is the fund likely going to be.”

The best funds are capable of providing 15% growth for a certain period of time. Once people hear about a successful fund, they want all in. As I mentioned before, if you started a fund in 2000s and got Amazon’s stock, the chance that the very same stock is going to rose for about 10.000% is near to zero. The CEO of a fund needs to pick other stocks, do new research and get it wrong a couple of times.

It is better therefore when you jump on a good fund before it is successful and even after that you should beware and be fucking cautious. A good fund should have only a limited number of investors. The more investors will come in, the more likely is the fund to get fucked (because of the pressure on the profits, stupid greedy public etc.).

The stock curve does not go up indefinitely 📈📉

Investing into Bitcoin when the price is increasing is very unwise, indeed. Even curve goes up and down. Keep it in mind while investing. But do not worry, wait a coule of years and it is probably gonna go up again. 

Once I was worried that I have bought Dogecoin far beyond reasonable price. I was wrong. The price dropped and then went up again and even when the Dogecoin is worth 1/3 of it's historical maximum, I still gained profit.

But my best advise is this: "Buy when nobody talks about it and sell when there is a hype." When investing, you cannot listen to media, you gotta have faith. Faith will get you though the darkness and gets you light in the end."

Buy when the price is reasonable, not when it is popular

When you should invest in Bitcoin / Dogecoin and other shit coins? Right now! Because the price 27.000 EUR per BTC is in my opinion quite reasonable and is likely to go up again in some period of time. But of course, I could be wrong. So do whatever YOU think is right.

Think always longterm

Buy when the price goes down and sell when price goes up. 5 to 10 years investment should not disappoint you. Never sell your dip when prices are not reasonable. Just... NEVER! Otherwise you are going to cry like a little bitch later.

With companies it is like with people, invest in those, who really care. Not otherwise.

Favorite quotes:

“The happiness of those who want to be popular depends on others; the happiness of those who seek pleasure fluctuates with moods outside their control; but the happiness of the wise grows out of their own free acts.”

Marcus Aurelius

“It is easy in the world to live after the world's opinion; it is easy in solitude to live after our own; but the great man is he who in the midst of the crowd keeps with perfect sweetness the independence of solitude.”

Ralf Waldo Emerson

Conclusion:

This book was heavy, I did not understand all the niches written in it. On the other hand it certainly broaden up my horizons. I recommend it to all who enjoy wine, women and bull markets. Cheers!

⭐️⭐️⭐️⭐️⭐️

Feel free to like, share and comment or recommend books/courses you find inspirational yourself. I’m keen to hear about them.

Coming Up Next: 

Love Yourself Like Your Life Depends On It by Kamal Ravikant

Peace 🧘‍♂️✌️🌱