What do intelligent speculators and investors do?
Investment and speculation must be kept totally separate, both in your mind and in your portfolio. Just as intelligent investment exists, so does intelligent speculation. It's a matter of choice. What is absolutely wrong, is misunderstanding: to think that you are investing when you are speculating instead.
The intelligent speculator must work by looking forward, anticipating market trends. He must do the opposite of the intelligent investor, who instead bases his analyzes on what does not fluctuate, on what remains constant over time. For this it is necessary to have a satisfactory knowledge of the background of the stock market in which you want to operate.
However, to protect yourself against losses that can be catastrophic, you should never devote more than 10% of your funds to speculation.
The key ideas of "The Intelligent Investor"
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