📖John Bogle
Buy Below Intrinsic Value
Buy only at prices well below intrinsic value.
The cardinal rule of investing: buy only when the price is significantly below your conservative estimate of intrinsic value. This builds in protection against error.
🏠 Everyday Analogy
📖 Core Interpretation
In Buy Below Intrinsic Value, John Bogle focuses on the gap between price and value. Returns come from paying less than what a business is worth, not from guessing short-term market moves.
💎 Key Insight：Buying below value builds in protection against error.
AI Deep Analysis
Get personalized insights and practical guidance through AI conversation
❓ Why It Matters
Ignoring valuation turns even good companies into poor investments. Overpaying compresses future returns and leaves little margin when assumptions are wrong.
🎯 How to Practice
Estimate intrinsic value with conservative assumptions, set clear buy ranges, and act only when price offers a meaningful discount with acceptable downside.
⚠️ Common Pitfalls
Confusing a low price with true cheapness
Using one metric without business context
Overly optimistic assumptions that erase margin of safety
📚 Case Studies
1
Jack Bogle’s Steady Course After the Dot‑Com Bust (2001)
After the 2000–2002 dot‑com crash, many tech-heavy portfolios fell over 70%. Investors who watched the Nasdaq plunge day after day dumped stocks and fled to cash. John Bogle publicly urged index investors to stay the course, avoid constant checking, and keep contributing regularly despite the headlines.
✨ Outcome：Investors who sold in fear missed the powerful 2003–2007 rebound. Long-term index holders who ignored short-term swings recovered and compounded. Lesson: not peeking helps you avoid emotional exits after crashes.
2
Long-Term Capital Management’s Collapse (2001)
Long-Term Capital Management (LTCM), led by star traders and Nobel laureates, earned high returns using heavy leverage and complex derivatives. Rather than moderating risk after early success, the fund kept increasing position sizes to chase more profit. When Russia defaulted in 1998, LTCM’s overleveraged bets unraveled, threatening the global financial system and forcing a Federal Reserve–brokered bailout.
✨ Outcome：LTCM’s partners lost most of their wealth and reputations. The case shows that without a clear sense of “enough,” even brilliant investors can let leverage and ambition destroy what they’ve already achieved.
See how masters handle real scenarios?
30 real investment dilemmas answered by legendary investors
Explore Scenarios →