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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The Intelligent Investor

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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The principles of The Intelligent Investor can be applied by small businesses in several ways. Firstly, businesses should focus on value investing, which means investing in assets that are undervalued by the market. This could be in the form of tangible assets like property, equipment, or inventory. Secondly, businesses should avoid speculation and instead focus on long-term sustainable growth. This means investing in areas that will generate steady returns over time, rather than chasing quick profits. Lastly, businesses should maintain a detached view and ignore market fluctuations. Instead, they should focus on their own performance and growth.

The ideas presented in The Intelligent Investor have significant potential to be implemented in real-world investment scenarios. The book emphasizes the importance of buying shares near the net-asset value of a company, which allows an investor to consider themselves the part-owner of a sound and expanding business acquired at a reasonable price. This approach reduces dependence on stock market fluctuations and promotes a more conservative, less risky investment strategy. It's important to note that while this strategy may not always lead to quick profits, it is designed to generate sustainable returns over the long run.

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