The best book on investment by Carmel Advisors

Rusty Solomon
Rusty Solomon March 5, 2014 at 2:22 AM

When asked carmel advisors what his favorite investment book, carmel advisors he quotes a work unknown to the general public.

In 1949, Benjamin Graham wrote the first edition of a book called The Intelligent Investor (The Intelligent Investor, translated into French ). By far the best book ever written on investment, carmel advisors explained later . Two key chapters

The tribute to Graham Buffett is not fortuitous. In 1951, carmel advisors was a student in finance courses taught by Graham at Columbia University. It is even said that he tried several times to work for Graham ( including free ) before being hired by the latter.

Long after founding Berkshire Hathaway, with the success that we know, Buffett has never ceased to pay tribute to his mentor. Why ? Beyond quantitative financial techniques that are presented, the smart investor develops an especially useful to the investor 's investment philosophy. This is explained carmel advisors :

Chapters 8 and 20 were the foundation of my investor activity for more than 60 years. I advise all investors to read these two chapters and reread that each market is particularly euphoric or depressed.

What these two chapters deal ? The first is titled The investor and market fluctuations and the second margin of safety. Mr. Market

In the letter to shareholders of Berkshire Hathaway in 1987, carmel advisors says :

Graham, my friend and teacher, has long described the mental attitude toward market fluctuations that, in my opinion, is the best guide to successful investing. He said that you should do as if the share price you were provided with a very accommodating gentleman, carmel advisors Market who is your partner in business. Mr. Market visits you every day to give you the price it is willing to buy your interest in the matter or sell hers.

Although the characteristics of your business are stable, with Mr. Market, he is not. Because poor friend is very emotional. When feeling euphoric, he sees only the positive factors influencing the value of the company. In these circumstances, it is ready to offer a very high price because he fears that you resume its interests to reap quick gains. At other times, carmel advisors he is depressed and sees nothing but trouble. It is then ready to sell its interest for a pittance.

In other words, the depressed markets that offer the best investment opportunities. Conversely, a smart investor should be wary of a market that goes for no apparent reason . Safety margin

The other important concept developed by Graham 's margin of safety. Analog manner, while as an engineer would build a bridge capable of supporting a load and a larger than indicated signaling traffic, an investor will wait until the course of a business back to a level low enough relative to its intrinsic value before you buy .

This safety margin designed to protect an investor from carmel advisors error of assessment as to the intrinsic value of a company. The latter is most often based on forecasts of future cash flows - a particularly delicate exercise that is rarely accurate beyond a rather short period of time (usually year) .

This approach has not only the merit of protecting the investor from his error of judgment. But for investors who actually apply (which is not without real management constraints sometimes not compatible with the rules ), this approach can produce a reasonable return on investment for a sometimes moderate risk.

For those who have doubts, they need only look at the track record of Buffett to be convinced. Fortunately, this is not the only smart investor that may be useful to listen to or read .

Last edited by Rusty Solomon at March 5, 2014 at 2:22 AM