Is The Intelligent Investor For Traders?
No, the Intelligent Investor book is not for day traders. In fact, the book opposes the trading mindset. It will not teach you how to become a successful trader or in other words a gambler.
Benjamin Graham wrote this book to help enthusiasts who want to become successful investors in their lives.
I have read the book more than three times and I can bet, if you are just starting out, its rules will entirely change your mindset on investing.
How The Intelligent Investor Book Opposes Trading Mindset?
In this book, Graham mentioned that temporary high returns don’t prove anything because they can’t guarantee the safety of your wealth in long term.
Graham shared an example to make it understand better for us – Suppose, you want to visit a place 130 miles apart. If you observe the 65 mph speed limit, you will complete the distance in two hours.
But, instead of 65 mph, if you observe 130 mph speed, you will complete it in just an hour.
Now, if you try 130 mph speed and survive somehow by luck, are you “Right”? Should you tempt to try this?
It may work for some time or some days as long as your luck works. But it is inevitable that one day you will get yourself killed.
This same thing happens with most people because of their trading mindset. Most people come to the market for quick profit via day trading.
Ironically, in the end, instead of profit, they end up everything with losses.
But Why Trading Is More Popular Than Investing?
It is popular because of cunning brokers. They promote it via advertising on TV, the internet, or social media channels.
No matter how the market is? – up, down, or sideways, brokers make profits (via commission) each time a person makes a trade. They generate commissions on your profits and also on your losses.
That’s why you can see brokers on Wall Street cheer all the time.
In the Intelligent Investor book, Benjamin Graham called day trading “a financial video game”.