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In this video we discuss how inflation affects stocks and how an investor should be protected or no. Link to book: …(read more)
LEARN ABOUT: Investing During Inflation
REVEALED: Best Investment During Inflation
HOW TO INVEST IN GOLD: Gold IRA Investing
HOW TO INVEST IN SILVER: Silver IRA Investing
In the second chapter of the classic book, “The Intelligent Investor,” author Benjamin Graham focuses on the impact of inflation on investing. Graham’s insights in this chapter continue to be relevant and influential for investors today.
Inflation is a crucial factor to consider when making investment decisions. Graham argues that investors must take into account the erosion of purchasing power caused by inflation. He explains that while an investment may appear to provide a positive return, it is essential to consider the impact of inflation on the real value of the investment. This is especially important for long-term investors who seek to preserve and grow their wealth over time.
Graham suggests that investors need to adopt a defensive approach to combat the effects of inflation. He recommends investing in stocks that have a history of paying consistent dividends, as well as bonds that provide a steady income. By focusing on investments that offer a reliable income stream, investors can better withstand the eroding effects of inflation on their wealth.
Furthermore, Graham emphasizes the importance of diversification in an investor’s portfolio. By spreading investments across different asset classes, such as stocks, bonds, and real estate, investors can reduce the impact of inflation on their overall portfolio. Diversification helps to mitigate the risk associated with inflation and provides a level of protection for investors.
In addition to the defensive strategies against inflation, Graham also advises investors to consider the potential for inflation in their investment decisions. He presents the idea that certain industries and companies may benefit from inflation, such as those involved in natural resources, commodities, and real estate. By recognizing the relationship between inflation and specific sectors, investors can capitalize on opportunities to hedge against inflation and potentially benefit from it.
Overall, Chapter 2 of “The Intelligent Investor” highlights the importance of understanding and accounting for the impact of inflation on investment decisions. Graham’s timeless advice on defensive investing and the consideration of inflation provides valuable insights for investors seeking to build and preserve their wealth over time. By adopting a thoughtful and strategic approach to investing, investors can navigate the challenges posed by inflation and position themselves for long-term success in the financial markets.
Thanks Sven, what a gem you are!
Would someone please help me understand. 1. Graham states there is no correlation between inflation and stock prices yet when inflation was at 22% stock went down(isn’t that a correlation) 2. He states that increased earnings have nothing to do with inflation. Does this mean when people say “if you pay people more, the cost of everything increases” is not true ?
Thank you. I had a hard time going through the book and your presentation really helps. Much appreciated.
I don't understand why you said with higher inflation the debt becomes a burden. Shouldn't it be the opposite?
This chapter was not easy. Thanks.
Sven hope you are feeling much better now, i highly and deeply appreciate you doing this. Not only it was a challenging read (Not having a background in Finance) Its very convenient and helpful that you are making these videos in simple words. Its a nice reference point to come back and digest it whenever you wish.
Take care.
Inflation is not always bad, sometimes it's great if it eats away at long-term debts
Still waiting for you to tell us what your PhD is in..You love touting it (only con artists use a PhD in their name) but the fact is that your PhD is likely to be in something completely unrelated to investments like history. I'm a seasoned Wall Street pro, so I know you are provided misinformation to these sheep. Dude, you are a scam artist. You will be exposed soon.
I love the videos covering Graham's wisdom. Keep it up, Sven.
Get better Sven! It's really interesting to watch your summaries of the books
I can only recommend Mike Maloney's video series about money/currency and inflation – especially this video about the central banks' process:
https://www.youtube.com/watch?v=iFDe5kUUyT0
Make sure you watch the rest of the series – it is 100% eye-opening.
Debt and inflation, you always explain this so well. Companys could not raise prices so fast, normal people get not more money so fast, so stocks must go down from 1965… Maby something like his happens wih april 18 peak earnings?
Inflation is a theft, a subtle form of taxation. Actually, fiat currencies are a bubble which deflates in a more or less controled way.
Many doctors in comments, I imagine you in pijama in bed with red nose and the book … Globalisation made inflation dissappear, fed became bubble pumping machine only. Trump may change this?!
Feel better Sven!
It only natural to get sick. Hope you get better soon.
I believe the stock market investing or real estate investing is the best way to fight inflation
Hope you're better soon!
Hope you feel better. I am not a health professional so I can’t speak to the validity of a remedy, but I did bookmark the following article during this flu season to have as a reference since it cited a university clinical study that showed a significant reduction in viral illness vs. a placebo from quercetin. Perhaps it might be of use to you.
“Quercetin — A Far Better Flu Remedy Than Tamiflu”
(https://articles.mercola.com/sites/articles/archive/2018/02/26/quercetin-for-flu.aspx#_edn6)
Lots of water, moderate amount of good food and a walk outside… And your health will be in bull territory in no time 🙂
Thanks for the video! I get the sense most people don't believe high inflation is possible in this day and age, so I appreciate you talking about this and some of the ramifications (along with corporate debt). I think we're closer to high inflation than we've been in decades, at least in the U.S.. I hope your flu is the 24hr variety. Take care Sven!
Hey Sven, completely unrelated question. Do you think that for a diversify all weather portfolio having your stock portion of the portfolio invested only in Berkshire Hathaway is a good idea? or should I diversify with some in the Dow and some international stocks? Because BRK seems like it always performs better in a crash and overall every time, however I fear what could happened to the company if Warren and/or Charlie died.
Working even when you are sick. Get well Sven!
Thanks for the dedication to your subscribers. Take care!