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Outsmarting the Crowd

A Value Investor’s Guide to Starting, Building, and Keeping a Family Fortune

By Bogumil K. Baranowski
15-minute read
Audio available
Outsmarting the Crowd: A Value Investor’s Guide to Starting, Building, and Keeping a Family Fortune by Bogumil K. Baranowski

Outsmarting the Crowd (2015) is a stellar beginner’s guide to investing. These blinks will give you all the knowledge you need to get started investing. Just don’t expect to get rich overnight: good investing is all about patience, discipline and rationality.

  • Students of business or finance
  • Anyone who wants a first glimpse into the world of investing
  • Anyone looking for a plan to grow their wealth

Bogumil K. Baranowski is a New York investment professional who manages a private investment fund at Tocqueville Asset Management.

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Outsmarting the Crowd

A Value Investor’s Guide to Starting, Building, and Keeping a Family Fortune

By Bogumil K. Baranowski
  • Read in 15 minutes
  • Audio & text available
  • Contains 9 key ideas
Outsmarting the Crowd: A Value Investor’s Guide to Starting, Building, and Keeping a Family Fortune by Bogumil K. Baranowski
Synopsis

Outsmarting the Crowd (2015) is a stellar beginner’s guide to investing. These blinks will give you all the knowledge you need to get started investing. Just don’t expect to get rich overnight: good investing is all about patience, discipline and rationality.

Key idea 1 of 9

To own stock is to own part of a business in exchange for funding its operations.

So, you’re ready to start investing in the stock market? Well, the most logical place to begin is by understanding what stocks are, because, despite what some might think, they’re not just pieces of paper with a price tag attached.

In fact, every stock represents part of a business, and when you buy stock you’re actually purchasing a share of the company. So in the same way that entrepreneurs can own a business outright or split ownership with other partners, as a stockholder, you can own shares of a company.

But while entrepreneurs and partners work day in, day out to manage their business, as a shareholder you don’t have any responsibility for managing the company and can sell your shares whenever you want.

So stocks are effectively pieces of a company, and many companies make their stock available to the public. This is a strategic decision that depends on the size and financial needs of a company. Every business relies on financing, but some entrepreneurs use their own savings while others come up with the initial capital by asking family and friends like the founders of Google did.

As a company grows, its funding often needs to grow with it. Eventually, the company can become so big that it only has two options for how to raise the massive amounts of capital needed to run its daily operations and make investments:

First, they can borrow money from a bank just like an average person would do to buy a car or a house. Naturally, this money, along with the interest it accumulates, needs to be repaid.

The second funding option is to go public. That means splitting ownership of the company into shares and selling them on the stock exchange. This option is different from a loan because the money never has to be repaid by the company. Instead, shareholders own stock as long as they want until they sell it to other investors, hopefully turning a profit and sometimes collecting dividends in the process.

Now that you know what stocks are, it’s time to learn how to analyze their value and become a successful investor.

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