The Intelligent Investor

Bought this book sometime in February 2008.

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Chapters includes.

• Investment versus Speculation: Results to Be Expected by the Intelligent Investor
• The Investor and Inflation
• A Century of Stock Market History: The Level of Stock Market Prices in Early 1972
• General Portfolio Policy: The Defensive Investor
• The Defensive Investor and Common Stocks
• Portfolio Policy for the Enterprising Investor: Negative Approach
• Portfolio Policy for the Enterprising Investor: The Positive Side
• The Investor and Market Fluctuations
• Investing in Investment Funds
• The Investor and His Advisers
• Security Analysis for the Lay Investor: General Approach
• Things to Consider About Per-Share Earnings
• A Comparison of Four Listed Companies
• Stock Selection for the Defensive Investor
• Stock Selection for the Enterprising Investor
• Convertible Issues and Warrants
• Four Extremely Instructive Case Histories
• A Comparison of Eight Pairs of Companies
• Shareholders and Managements: Dividend Policy
• "Margin of Safety" as the Central Concept of Investment

The greatest investment advisor of the twentieth century, Benjamin Graham taught and inspired people worldwide. Graham's philosophy of "value investing" -- which shields investors from substantial error and teaches them to develop long-term strategies -- has made The Intelligent Investor the stock market bible ever since its original publication in 1949.

Over the years, market developments have proven the wisdom of Graham's strategies. While preserving the integrity of Graham's original text, this revised edition includes updated commentary by noted financial journalist Jason Zweig, whose perspective incorporates the realities of today's market, draws parallels between Graham's examples and today's financial headlines, and gives readers a more thorough understanding of how to apply Graham's principles.

Vital and indispensable, this HarperBusiness Essentials edition of The Intelligent Investor is the most important book you will ever read on how to reach your financial goals.

About the author
The late Benjamin Graham was one of the greatest investment advisers of this century, and this reissue of his timeless classic covers all the fundamentals of value investing. Plus there's an added introduction by none other than business guru Warren Buffett.

Source: Wikipedia , berkshirebusinessbooks.com

The Rule of 72

The Rule of 72
The Rule of 72 is a great mental math shortcut to estimate the effect of any growth rate, from quick financial calculations to population estimates. Here’s the formula:

Years to double = 72 / Interest Rate

This formula is useful for financial estimates and understanding the nature of compound interest. Examples:

At 6% interest, your money takes 72/6 or 12 years to double.
To double your money in 10 years, get an interest rate of 72/10 or 7.2%.
If your country’s GDP grows at 3% a year, the economy doubles in 72/3 or 24 years.
If your growth slips to 2%, it will double in 36 years. If growth increases to 4%, the economy doubles in 18 years. Given the speed at which technology develops, shaving years off your growth time could be very important.
You can also use the rule of 72 for expenses like inflation or interest:

If inflation rates go from 2% to 3%, your money will lose half its value in 36 or 24 years.
If college tuition increases at 5% per year (which is faster than inflation), tuition costs will double in 72/5 or about 14.4 years. If you pay 15% interest on your credit cards, the amount you owe will double in only 72/15 or 4.8 years!
The rule of 72 shows why a “small” 1% difference in inflation or GDP expansion has a huge effect in forecasting models.

By the way, the Rule of 72 applies to anything that grows, including population. Can you see why a population growth rate of 3% vs 2% could be a huge problem for planning? Instead of needing to double your capacity in 36 years, you only have 24. Twelve years were shaved off your schedule with one percentage point.


Source: http://betterexplained.com