Is "The Intelligent Investor" a good book for beginners?

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(20-06-2023, 03:10 PM)weijian Wrote:
(19-06-2023, 11:41 PM)i4value Wrote: It depends on what you mean by "efficient". The standard definition of an efficient market is one where prices quickly reflect all available information. I would argue that information just don't come from the fundamental investors. Speculators and technical investors provide the "sentiments" information.

I always console myself that as a fundamental investor, I have a much easier task to beat the market where the bulk is made up of technical investors. I think long term whereas the technical guys are short term investors. So their fear and greed provides more buying and selling opportunities. But of course it requires great patience and holding power.

hi i4value,
My basic definition of an inefficient market is absence of an army of brilliant people (eg. hedge fund managers/arbs/sector specialists etc), regardless of whether they are fundamental/momentum. The lesser there are in terms of brilliant people competing against each other, the more inefficient the market will be.
The strange thing is that the success for the value investor depends on the market being inefficient. Of course you also have to do the analysis and valuation. But an inefficient market provides more opportunities for mispricing.
Thank you ivalue. 
Agreed that inefficient market provided more opportunities to identify mis-priced opportunities.

Just wanted to share some of my market operations.

Before that, I always says that I'm very appreciative of all the helps that valuebuddies given me - even you don't realised it.  

The following is a story.

First of all, I had a habit of reading blogs.  I read to pick up what's hot and whether the stock is worth investigation.  Most of the time, a quick 1 mins check (based on my checklist) would be sufficient.  

For this, I am very grateful of the blogger for his kind sharing.  In fact, for a lot of under value stocks, it is these bloggers kind sharing that allow other value investor a chance to noticed that they are under value.  


The next thing again is my habit. When I read about a hot stock and after investigation, it is a worth while investment, I don't initiate my purchase.  The rationale for this habit is rather simple. This stock is currently exposed aka hot.  Any purchase will pushes the price up easily (we are talking about an under value stocks that's mis-priced due to inefficient market).  Often, there are sign of interest and some transaction is happening.  I just resists my temptation to participate in this moment (despite agreeing that this is an opportunity).  

Naturally, this stock would be in my watch list and that's the part that patient is needed for me.  I had a habit of looking at the prices of my watch list almost everyday and certainly every week.  My thinking process is rather simple.  Most of my watch list are great stocks to buy and the only reason that I'm not buying is I wanted to make sure that I buy at a lower price than anyone (my imagination competitor).

Let me give one market operation as an example.

Many years ago, I identified a worth while investment AIT, now call Capitaland India Trust.
[Image: CLINT.jpg]

It IPO at $1 and after IPO, AIT zoom to $1.30.  When I take note of AIT, it was priced at $1.  As per my habit, it was in my watch list until about $0.80 then I start to buy.  As explain before, I just wanted to make sure that I buy at a lower price than everyone (my imaginary competitor).

Another story was BestWorld BWL.

I read about our fantastic BWL many many years ago.
It's always in my watchlist.
I resisted my temptation to buy and just do nothing during it's peaked and subsequent crashed.

Then I observed/read the forum in the pre-incarnation of BWL was having trouble in Indonesia with Tax issues and also Indonesia tightening halal requirements which will/could affect BWL.  Of course, I just did a quick gauge on the impact on BWL results and realised that even if the risks is real, the impact BWL is manageable.  

The next part was actually when I decided to begin buying BWL everyday - the forum post on BWL goes into silence.  Everyone is waiting and nobody posting anything on BWL.  My feeling at that time was BWL was un-loved and people are looking at de-risk (selling siah).

Everyday, I just queue and queue below $0.20 and most of my purchase was hit at $0.18.  

I stopped my daily queue as BWL price suddenly go beyond $0.20 and soon after Sam Goi's was mentioned collecting BWL.

Thank you for reading.
This is what I did (and what I'm doing).
Whenever, I saw someone mentioned that value investor needs to be patient, I smiled because I totally agreed with him.


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