Wednesday, August 27, 2008

Rands and Sense

Jason Zweig did a revised and updated version of Benjamin Graham's `Intelligent Investor'. I am just over half way through... but this quote, highlighted by Zweig as maybe the most important paragraph stands out:

But note this important fact: The true investor hardly ever is forced to sell his shares, and at all other times he is free to disregard the current price quotation. He need pay attention to it and act upon it only to the extent that it suits his book, and no more. Thus the investor who permits himself to be stampeded or unduly worried by unjustified market declines in his holdings is perversely transforming his basic advantage into a basic disadvantage. That man would be better off if his stocks had no market quotation at all, for he would then be spared the mental anguish caused him by other persons' mistakes of judgment.
`The little book that beats the market' is also worth reading (in 2 hours as opposed to Graham's tome) for a layman's introduction to investing. Once you get over the condescending tone and thick American style (written for his 11 year old son to understand what he does)... the book makes a lot of sense.

If you are planning on `playing the market' yourself and not investing with a professional fund, I reckon that book is a decent one to use as a foundation.

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