We Will see about Basic Principles of Investing That Will Increase Your Intellectual Powers of Investing. Most Successful Investors Rely Of These 5 Principles and With This They Apply There Profound Common Sense and Vast Experience in the Art of Investing and Beat the Markets.
These Are The Core Principles, Which Are At Still Valid Today.
- Stock Means Ownership: A Stock Means An Ownership Interest In An Actual Business, With An Underlying Value That Does Not Depend On Its Share Price. It Is Just Not A Just Number or Name But It Is Actual Ownership of the Business in Some Form.The Principle Of Buying A Shares At A Significant Discount To Its Intrinsic Value, Which Is Thought To Not Only Provide High-Return Opportunities, But Also To Minimize The Downside Risk Of An Investment. The Goal Of Smart Investors Is To Determine Companies That They Believe Are Undervalued Relative To The Market Or Are Trading At A Discount To Their Intrinsic Worth.
- Go Against The Trend: The Market Is A Like Pendulum That Forever Swings Between Unsustainable Optimism In Which Makes Stocks Trades At Too Expensive Valuation And Overbought Prices And Unjustified Pessimism In Which Makes Them Too Cheap And Under Owned. The Intelligent Investor Is A Realist Who Sells To Optimists And Buys From Pessimists?
- Be Cheapskate: 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. Means It Is Possible A Stocks Investment Value Is The Same As It’s Market, Which Is Called As “Fair Market,” Value, But It Is Most Likely Its Investment Value Is Higher Or Lower Than Market Value Depending On Market Condition And Cycle.
- Always Maintain Margin Of Safety: No Matter How Careful You Are, The One Risk No Investor Can Ever Eliminate Is The Risk Of Being Wrong. Smart Investors Follow Rule Of Margin Of Safety And Never Overpaying, No Matter How Exciting An Investment Seems To Be. This Rigid Rule Can You Minimize Your Odds of making lots of errors.
- Avoid Mood Swings: The Secret To Your Financial Success Is Inside Yourself. Means If You Follow Rule Of Invest With Patient & Confidence, You Can Take Steady Advantage Of Even The Worst Bear Markets. But If Investor Is Too Anxious And React To Each And Every News From Market Floors Then That Definitely Going To Kill You. By Developing Your Discipline and Courage, You Can Refuse To Let Other People’s Mood Swings Govern Your Financial Destiny. In The End, How Your Investments Behave Is Much Less Important Than How You Behave.
I Think If You Think And Apply These Rules On Each Of Your Current And Future Investments Then I Can Guarantee You, That Its Outcomes Will Never Disappoint You!!