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An investor who follows the guidelines of The Intelligent Investor is less likely to be affected by stock market fluctuations. This is because they invest in securities that are selling near their tangible asset value, which allows them to take a detached view and ignore stock market fluctuations. They are not dependent on the stock market to generate a profit, unlike speculators who pay high multiples of earnings and tangible assets. This conservative policy is likely to yield better results than risky investments based on anticipated growth.
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This book will not teach you how to beat the market. However, it will teach you how to reduce risk, protect your capital from loss and reliably genera...
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Investors should limit themselves to securities currently selling for not that far above their tangible asset value for both practical and psychological reasons. When an investor pays well above net asset value for a share, they become a speculator dependent on the vagaries of the stock market to generate a profit. However, an investor who buys shares near the net-asset value of a company can consider themselves the part-owner of a sound and expanding business acquired at a reasonable price. Unlike the speculator who paid high multiples of earnings and tangible assets, they can take a detached view and ignore stock market fluctuations. This conservative policy is likely to work out better than risky investments based on anticipated growth.
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