Awakening of the Intelligent Marginal Investor: Introduction

The Starter Investor Reads The Intelligent Investor

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This article is the first of a series that will show how The Starter Investor understood and applied the principles and techniques described in the book The Intelligent Investor by Benjamin Graham in the context of a beginning investor who is a Filipino, residing in the Philippines and with a shoestring budget to begin with.

The book is not an easy read but given sufficient interest and careful thought, any start-up investor may pick up jewels of insights that may guide one in this game of money and investing. The contents of the book are as follows:

Part One: General Approaches to Investment

• What the Intelligent Investor Can Accomplish

• The Investor and Stock-Market Fluctuations

• The Investor and His Advisers

• General Portfolio Policy: The Defensive Investor

• Portfolio Policy for the Aggressive Investor: Negative Approach

• Portfolio Policy for the Enterprising Investor: The Positive Side

Part Two: Principles of Security Selection

• United States Savings Bonds: A Boon to Investors

• Security Analysis for the Lay Investor: General Approach

• Stock Selection for the Defensive Investor

• Stock Selection for the Enterprising Investor: The Appraisal Method

• Detection of Undervalued Issues by Security Analysis: Three Examples

• The Pattern of Change in Stock Earnings and Stock Process

• Group Studies of Earnings and Price Developments

Part Three: The Investor as Business Owner

• Stockholders and Managements

• A Study of Stockholder-Management Relations in Two Industries

Part Four: Conclusion

• "Margin of Safety" as the Central Concept of Investment

• Appendix: Buying and Selling by "Central Value" Method

Since the book was first published in 1949, the examples may no longer be relevant. Even some suggestions may already be obsolete at this time. Nevertheless, I would never hesitate to recommend the purchase of the book by anyone who is seriously interested in buying common stocks for investment purposes.

Speaking of common stocks, we just got a copy of the Notice of Annual Stockholders Meeting, being an investor of Ayala Corporation to be held at the Grand Ballroom of the Hotel InterContinental Manila, Ayala Center, Makati City, on Friday, April 3, 2009, at 9:00 a.m.

Reading from the accompanying SEC Form 20-IS, we found out that Ayala Corporation as of December 31, 2008, has:

• 496,983,784 number of common shares outstanding.

• 103.7 billion pesos market capitalization based on the closing price of its shares.

• 209 pesos/share closing price.

• 7,916 is the approximate number of registered holders of common shares.

• Henry Sy, Sr. is the top 6 registered holder of common shares with 1,296,636 shares.

Our next post will be related to the topic What the Intelligent Investor Can Accomplish. Check it out.