Intelligent Investor Research Articles

Market Capitalization and Its Impact on Equity Valuation a Mixed Method Study of The Indian Capital Market

An investor must perform research on a stock before investing in it. It is critical for the intelligent investor. As a result, stock prices have long piqued the interest of investors. Researchers have worked hard to identify the elements that influence stock prices and so returns. In the current study, 300 companies listed on India's National Stock Exchange (NSE) were divided into three categories based on market capitalization. The study relied on both primary and secondary data to reach its findings. Logistic regression is used to examine secondary data in the form of historical financial information. The outcomes of secondary data analysis are then confirmed using primary data gathered through interviews with domain experts. The study also revealed the importance of the new variables PEG ratio and economic value added (EVA) in Indian scenario to predict the market price of large cap companies. The study's findings can help market participants such as fund managers, stocks analysts, portfolio managers, retail investors, and high-net-worth individuals. The findings of the study will also contribute to the current body of knowledge on equity valuation.

Finance and intelligence: An overview of the literature

AbstractDo more intelligent investors take better economic decisions than less intelligent ones? Is risk attitude, in particular risk/loss aversion, linked to cognitive ability? Does an investor's cognitive ability impact his/her patience? Is financial performance positively linked to investor's intelligence? These research questions have become highly relevant with the development of behavioral economics and behavioral finance, following the recognition that humans are not homo economicus. This paper reviews the several strands of literature devoted to answering the above questions. We first discuss the barely debated definitions and measures of intelligence/cognitive ability used in psychology, economics, and finance. We then review the results related to the (controversial) link between risk aversion and cognitive ability. We observe that the literature provides clear results for patience; individuals with a higher level of cognitive ability being more patient on average. Finally, we review the contributions linking (successfully or not) portfolio choice and financial performance to cognitive ability.

Financial Literacy for the Students in Christian Senior High School 1 of BPK Penabur in Cirebon to Prepare Them to be the Intelligent Investors

Financial literacy is helpful for learners to recognize the features of the capital market and their instruments. With this knowledge, they are expected to manage their money wisely, especially in selecting the devices. Furthermore, to realize this condition, this service to the community aims to measure this literacy level and recognize risk profiles. The methods utilized in this service are lecture, discussion, and simulation. The participants in this service are the 40 students in the eleventh grade taking social science in the Christian senior high school 1 of BPK Penabur in Cirebon. Also, the precise answers of the students based on financial literacy items are used to evaluate this service. Surprisingly, the correct answers to these basic and advanced items are from 60.53% to 78.95% and 63.16% to 78.95%, respectively, indicating the middle financial level exists. This level is above the national literacy level in 2019 in Indonesia: 38.03%. Besides, related to the risk profile, most students are conservative (47.5%) and moderate (47.5%). Based on this outcome, the students with a conventional risk profile are expected to invest their money in a time-deposit account, government bonds, and fixed-income and money-market mutual funds. Meanwhile, students with a moderate risk profile should place their funds in blue-chip stocks and mixed mutual funds.

The Behaviour of Intelligent Investors at Financial Markets: Insight from Slovenian Investors

Intelligent investors differ from speculative or non-professional investors in the fact that intelligent investors act countercyclically; that is, they act against the trend, or otherwise, they buy when prices have already fallen and sell when their rate of selected investment has already risen. An example of countercyclical behavior can also be explained by the thinking of professional investor Warren Buffett, who points out a simple investment rule: "Be scared when others are greedy, and be greedy when others are scared." Since crypto markets have recently emerged, there is a need for researching the best strategy for investments in their financial instruments. To get an insight into the behavior of Slovenian investors, in-depth interviews were conducted with a sample of financial experts. The article presents tips for the correct responses of intelligent investors in financial markets.
 This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

Keynes and Graham’s intelligent investor

Keynes was a great investor in liquid markets. He operated in the currency, commodity and stock markets. The objective of this article is to describe Keynes’s profile as a stock market investor in the 1930s. He successfully beat the market during that decade. Benjamin Graham’s works are the primary references for stock market researchers and investors, particularly his book The Intelligent Investor. In it, Graham described the profile of an investor capable of beating the market. This article compared Keynes’ practices with those suggested by Graham in order for an investor to be intelligent. The conclusion is that Keynes was not fully Graham’s Intelligent Investor. Keynes was an idiosyncratic investor with unprecedented practices. He was a top-down, bottom-up, buy-and-hold and nondiversified investor.

On The Origins Of Long-term Capital Losses And Gains - A Graham & Doddsville Perspective On Risk And Investing

The year 2019 marked the 70th anniversary of The Intelligent Investor by Benjamin Graham (1949). We start this paper by reintroducing the definition of an investment operation as conceived by Graham. From this definition we deduce that in Graham’s investment philosophy investment risk equates with a permanent or long-term loss of capital – not with stock price fluctuations. According to Graham permanent or long-term losses of capital are periodically caused by the purchase of low quality securities far above their tangible value. Consequently investment risk can be avoided and a satisfactory return can be realized through the purchase of quality securities at low valuations, i.e. through the adoption of the margin-of-safety principle. In this paper we define a long-term capital loss/gain as a real capital loss/gain over a ten-year investment horizon. Applied to a dataset spanning 130 years covering four regions (US, Europe, Japan and Asia Pacific) we find that high valuation, low quality portfolios are characterized by the highest investment risk. Investors in high valuation, low quality portfolios experienced real losses of up to -75% over a ten-year investment horizon. A low valuation and a medium/high quality are on the other hand key fundamental characteristics in avoiding long-term capital losses. Concurrently low valuation, high quality stocks provided investors with a ten-year total real return of more than +100%, i.e. a doubling of purchasing power, in 10 out of the 14 decades across the four regions. Consequently, and consistent with Graham’s (1949) main conclusion, margin-of-safety investors have succeeded in combining low investment risk with high inflation-adjusted returns. Wealth managers and financial advisors can incorporate our findings and conclusions in building fundamentals-based (rather than price-fluctuation-based) risk profiles and investment programs in collaboration with their clients.

Translation and Markedness

Translation is a task which involves different aspects of linguistics. Producing equivalent degree of markedness is one of linguistic competences which should be owned by the translators. This ability has a contribution in maintaining the thematic structure and the propositional meaning through the translation process. The present study is a descriptive analytical corpus-based aimed to analyze (1) the translation of English marked structures, those are passive, it-cleft, existential and pseudo-cleft into Indonesian, and (2) the ways presenting the thematic structures in the target language. The development of English marked sentences involves thematization process, therefore analyzing the ways in translating these marked sentences and transferring the thematic structures to their Indonesian counterparts are interesting to be conducted. The corpus found in an English book entitled The Intelligent Investor and its Indonesian translation. The corpus is a parallel data consists of 191 marked English sentences and their Indonesian translations. Comparative analysis conducted to the data showed that 78.5% of the marked English sentences were translated into marked sentences in Indonesian. Translating the marked English sentences into Indonesian marked sentences supported the process of preserving the information.

How Does Learning and Education Help to Overcome the Disposition Effect?*

Abstract The paper assesses how intelligence, education, and learning affect the disposition effect using our exhaustive NASDAQ OMX Tallinn dataset. We employ survival analysis to show that higher intelligence and stronger learning abilities as measured by education level and the type of education lessen the disposition effect. More highly educated and intelligent investors also learn faster by trading. We find that mathematical abilities are beneficial for overcoming the disposition effect and propose that learning ability is one of the most important components of intelligence in affecting the disposition effect.

'The New, Patient, Focused Intelligent Investor': Dividends, Hedge Funds, and Active VS Passive Investing

We link dividends with profits and good corporate governance. However, do dividends provide other information? Are they useful in identifying the economic cycle? And if so, how might one use that information as to gain an edge when investing in the stock market? We study in details different frequencies of dividend payment across time and find several results that support Baker and Wurgler (2004) paper. Also, we review Cliff Asness’s “Do Hedge Funds Hedge?” paper, extend our analysis on a longer time horizon and perform various Fama French regression as to identify which factors hedge funds tend to rely on to “make a buck”. We find that hedge funds do not “hedge” as much as they say they do, rely on similar investment strategies across asset classes and geography. Finally, we try to determine whether or not an individual investor is better served with active or passive investing. We find that various criteria (return objective, taxes, fees, investing skills) are determinant in this regard.

How Do Cognitive and Non-Cognitive Abilities Influence Stock Market Participation?

[enter Abstract Body]We study how cognitive and non-cognitive abilities influence stock market participation and what distinguishes investors from non-investors. Combining five datasets enables to observe the effect of mental abilities in the finest detail. We find that economic activity and occupation as well as religion and other characteristics influence stock market participation. More intelligent investors have a higher probability to participate in the stock market but the effect is clearly smaller for women than for men. We conclude that stock market investors tend to be more ambitious, prone to risk and also more intelligent, but less restricted in their nature.

The Translation of English It-Cleft Sentences into Indonesian

The translations of English It-Cleft Sentences into Indonesian is the topic of this study. It is interesting to study because there is cleft construction in Indonesian. Since there is no cleft construction in Indonesian, sometimes the result of the translation can be awkward. The purposes of this study are to find out the translation of English cleft sentences into Indonesian found in The Intelligent Investor book and to analyze the naturalness of the translation in Indonesian. The sentences were collected through note taking technique and then analyzed qualitatively by using the theories of Quirk (1986) regarding cleft sentences, and Newmark (1988) related to the levels of translation. The results show that the sentences were translated into both simple and complex sentences in the Indonesian TL. From the translation results can be seen that not all of the sentences sound natural in the target language because the cleft construction is not found in Indonesian, however the meaning of the sentence can be transferred into the target language.

Benjamin Graham Revisited

Warren Buffett read the first edition of Benjamin Graham’s book, The Intelligent Investor, in 1950. According to Buffett (Graham, Revised, 2003) “I thought then that it was by far the best book about investing ever written. I still think it is.” Can a buy and hold defensive investor use this stock selection criteria and earn a positive abnormal risk adjusted rate of return? To test this hypothesis data for 2000 and prior years are used to select stocks that meet the defensive investor criteria. Nine stocks from an original list of more than 9,000 satisfy the criteria. Buy and hold is the investment strategy and these stocks are held from the end of June 2001 until the end of December 2007. The performance measure is the time-series regression intercept, or alpha, for the four-factor model. The estimated alpha is negative but not statistically significant.

Reflections on CEO Compensation

Academy of Management PerspectivesVol. 22, No. 2 ArticlesReflections on CEO CompensationJohn C. BogleJohn C. BogleJohn C. Bogle () is founder and former CEO, The Vanguard Group.Published Online:1 May 2008https://doi.org/10.5465/amp.2008.32739756AboutSectionsView articleView Full TextPDF/EPUB ToolsDownload CitationsAdd to favoritesTrack Citations ShareShare onFacebookTwitterLinkedInRedditEmail View articleReferences Buffett W. (2005). Chairman's Letter, Berkshire Hathaway 2005 Annual Report. Google Scholar Graham B. (2005). The intelligent investor. New York: HarperCollins. (Original work published in 1949) Google ScholarFiguresReferencesRelatedDetailsCited byComplementarity in Monitoring and Bonding: More Intense Monitoring Leads to Higher Executive CompensationRobert E. Hoskisson, Mark W. Castleton and Michael C. Withers1 May 2009 | Academy of Management Perspectives, Vol. 23, No. 23 Merger and Acquisition Transactions and Executive Compensation: A Review of the Empirical EvidenceVirginia Bodolica and Martin Spraggon1 January 2009 | Academy of Management Annals, Vol. 3, No. 1The immoral assault on CEO payEdwin A. Locke1 August 2008 | Academy of Management Perspectives, Vol. 22, No. 3Are U.S. CEOs Overpaid? A Response to Bogle and WalshSteven N. Kaplan1 August 2008 | Academy of Management Perspectives, Vol. 22, No. 3 Vol. 22, No. 2 Permissions Metrics in the past 12 months History Published online 1 May 2008 Published in print 1 May 2008 Information© Academy of Management PerspectivesKeywordsCHIEF executive officersEXECUTIVE compensationSTOCKS (Finance) -- PricesCORPORATE governanceUNITED States -- Economic conditionsThis article is in response to Steven N. Kaplan's Congressional testimony on empowering shareholders on executive compensation and H.R. 1257, the Shareholder Vote on Executive Compensation Act before the Committee on Financial Services of the United States House of Representatives, on March 8, 2007. The ideas expressed in Mr. Kaplan's article in this issue are based largely on this testimony. Due to timing issues, we asked Mr. Bogle to respond to Mr. Kaplan's testimony, not to the article that appears in this issue. To access the full testimony, visit www.house.gov/apps/list/hearing/financialsvcs_dem/htkaplan030807.pdf.Download PDF

“People Get Emotional About Their Money:” Performing Masculinity in a Financial Discussion Board

This article investigates the discursive practices of company stockholders in one financial cyberspace, the Berkshire Hathaway Board on The Commodity Stand1 website. After a review of relevant research on gender and investing in computer-mediated communication and the history of the site chosen for examination, I analyze how members of the site create and maintain identity and community through their discursive performances, with particular emphasis on aspects of gendered practices. This investigation found that participants performed roles as admirers, intelligent investors, and mentors. The discursive practices are reified and gendered masculine. Feminine forms of talk were subjugated overtly and through the homogeneity of the masculine form. This research is one step toward a communicative foundation for researching the gendered manifestation and perpetuation of economic discourses in everyday life.

Intelligent Investor: An intelligent decision support system for portfolio management

Intelligent Investor is an intelligent system which aims to support investment decision-making. In particular, the system supports the selection procedure regarding stocks in the Athens Stock Exchange, as well as portfolio composition and management procedures.

The Role of Government in Discouraging Manipulator in the Stock Market

Based on Allen and Gale (1992), Aggarwal and Wu (2002), this article introduces dynamic transaction costs. So, we can comprehensively and theoretically discuss the major roles of government against stock market manipulation for the first time. First, the government should require all the related participants disseminate great and true information in time, in order to decrease the cost of intelligent investor. Second, the government should vigorously regulate the trading and discriminate the intelligent investor from manipulator to increase the manipulator's cost. Last, in order to decrease the intelligent investor, the government also should increase the degree of investor education

Reframing the Metaphor of the Citizen-Government Relationship: A Value-Centered Perspective

One of the prominent paradigms to emerge in recent years is customer-centered public administration. According to this citizen-customer model, government implicitly enters into a service contract where administrators give taxpayers the same responsiveness and consideration businesses give customers (Schachter, 1995; National Performance Review, 1993). The customer paradigm has helped reshape the thinking of governments at various levels, from local (Barrett and Greene, 1995) to national (Gore, 1994). Yet, the customer model has been criticized for modeling citizen involvement in terms of passive consumers who like or dislike services and who express their views of government primarily via complaint or satisfaction surveys (Frederickson, 1994). Schachter (1995) proposes instead that citizens be viewed as owners of government who are proactive in managing the government's scope and affairs. According to this citizen-owner model, urban citizens owned their government and as owners had a duty to get involved in city affairs and instruct politicians and public administrators in `shareholder' demands (Schachter, 1995, 530). However, citizens do not necessarily engage in the affairs of government and may act instead as disenfranchised owners, or even as subjects of the public bureaucracy (Redford, 1969). They do not actively measure or monitor the activities of their government. Few are involved in government service. Many do not vote. They have minimal or no interaction with government. They feel ineffective in dealing with public bureaucracies and bureaucrats (Nachmias and Rosenbloom, 1980). In this article we propose an alternative perspective to citizens and their relationship to government, a value-centered perspective in which citizens are viewed not as shop-walking proprietors who supervise government employees or as consumers who choose to buy this or that brand of government. Instead citizens are intelligent investors who coinvest their resources in the community and government, from which they expect to receive value. They may contribute money to improve a recreational park. They may invest time in serving on a school committee because their children are actively involved in schooling. They may support educational programs long after their own children are grown, because they want to maintain a quality educational environment for their grandchildren. A value-centered paradigm of citizen involvement may be useful to both public administrators and citizens. The media encourages citizens to ask, is the cost of government? In response administrators may cut costs, reduce or eliminate programs or services, and make wholesale changes in government. Such actions are directed at only the cost side of government. A value perspective focuses also on the gains and benefits citizens receive from government (Forbis and Mehta, 1981). It encourage6 citizens to ask, What is the worth of government to the citizen? The worth of government is often lost in the public debate. Such a value perspective encourages public administrators to refocus on the creation of value and wealth, rather than simply wealth distribution. A related implication of a value perspective is its potential effect on measurement. Administrators have been encouraged to measure dimensions such as service quality (Zeithaml, Parasuraman, and Berry, 1990), department effectiveness (e.g., timeliness in service delivery), or efficiency (e.g., total number or dollar amount of contracts awarded per department specialist) (Kestenbaum and Straight, 1995). However, it is also important to measure citizens' perceptions of the value they receive for the tax investments they make. Do citizens perceive they are getting good value, not only from government in general, but also from specific departments, services, or community assets for which government is trustee? In this article we explore this value-based perspective of government and the notion of citizens as coinvestors in the community. …

Bogle on Mutual Funds: New Perspectives for the Intelligent Investor

Part I: Building Blocks.The Rewards of Investing.The Risks of Investing.Mutual Funds.Part II: How to Select a Common Stock Mutual Fun.How to Select a Bond Mutual Fund.How to Select a Money Market Fund.How to Select a Balanced Mutual Fund.Where to Get Mutual Fund Information.Part III: New Perspectives on Three Key Issues.Index Funds.Mutual Fund Costs.Taxes and Mutual Funds.Part IV: Practical Application of Investment Principles.The Allocation of Investment Assets.Mutual Fund Model Portfolios.A Mandate for Fund Shareholders

Book Reviews

The Journal of FinanceVolume 49, Issue 2 p. 747-767 Book Reviews Book Reviews First published: June 1994 https://doi.org/10.1111/j.1540-6261.1994.tb05162.xRead the full textAboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinkedInRedditWechat Abstract Book reviewed in this article: Capital Budgeting Under Uncertainty. By RAJ AGGARWAL. Englewood Cliffs, N.J.: Prentice Hall, 1993. Pp. x + 341. Bogle on Mutual Funds: New Perspectives for the Intelligent Investor. By JOHN C. BOGLE. Burr Ridge, Illinois: Irwin Professional Publishing, 1994. Pp. xvi + 320. The Collapse of Federally Insured Depositories: The Savings and Loans as Precursor. By R. DAN BRUMBAUGH JR. New York: Garland Publishing, 1993. Pp. xxii + 240. Collateralized Mortgage Obligations: Structures and Analysis. By FRANK J. FABOZZI, CHARLES RAMSEY, and FRANK R. RAMIREZ. Summit, N.J.: Frank J. Fabozzi Associates, 1993. Pp. vii + 250. Short-Term Financial Management. By TERRY S. MANESS and JOHN T. ZIETLOW. St. Paul, Minnesota: West Publishing Company, 1993. Pp. xix + 675. Canadian Capital Markets. Edited by MICHAEL J. ROBINSON and BRIAN F. SMITH. London, Ontario: Western Business School, The University of Western Ontario, 1993. Pp. iv + 152. Volume49, Issue2June 1994Pages 747-767 RelatedInformation

Bogle on Mutual Funds: New Perspectives for the Intelligent Investor.

Bogle on Mutual Funds: New Perspectives for the Intelligent Investor.