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| 11/23 |
| 2005/10/16-19 [Finance/Investment] UID:40128 Activity:nil |
10/16 dear motd financial adviser,
i'm interested in learning about investing in the stock market and
would like to hear recommendations about books to read on this
subject. I am not looking for general advice on "what to do with your
money" but specific advice on methods and strategies for picking
stocks and mutual funds to invest in for someone without a lot of
experience and no background in economics.
\_ Wow, psb hasn't answered yet. I'm incapable of imitating psb, but
he would tell you to read "A Random Walk Down Wall Street." ok tnx.
\- 1. i was at the opera. 2. good advice. --OTpsb
\_ I would read a Peter Lynch book. Then I would try yahoo finance
and all the news on the particular stock you are interested in.
WSJ is always good, and Economist helps too, but is not
essential, since it doesn't need to be too complicated. The
basic but important things are careful research on the company
(the industry it is in, competitors, products, business model,
risks, valuation, etc. etc.), patience and discipline
(let good stock run, cut loss early on bad picks).
Also, resist the urge to start trading instead of investing.
Of course, don't forget asset allocation, but I have mixed
feelings about that. I think sometimes one should go for it.
If you can do the above well, you should be fine. You can
learn other more fanciful, but not necessarily more useful,
stuff as you go along. Before buying a stock, be able to
give a 1 minute explanation on why you are getting it, and
what are the possible risks and downsides for the stock.
Oh, also Smartmoney magazine is pretty decent for picking stocks
and funds.
\_ start with Investing for Dummies or Personal Finance for Dummies.
After that, let us know.
\_ in addition, that Peter Lynch book, and maybe also
writings by William O'Neil (How to Make Money in Stocks),
and Jim Cramer (latest book).
\_ http://www.investopedia.com/articles/basics/03/050803.asp |
| 11/23 |
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| www.investopedia.com/articles/basics/03/050803.asp Printer friendly version As much as we would love for investors to think of Investopedia as the on ly site they need for investing education, we'd be doing you a disservic e by not informing you of the other great resources out there! So withou t further ado, here are our favorite investing books of all time. Security Analysis", which is probably t he most quoted but least read investing book. The Intelligent Investor w on't tell you how to pick stocks, but it does teach sound, time-tested p rinciples that every investor can use. Plus, it's worth a read solely be cause of Warren Buffett's following testimonial: "By far the best book o n investing ever written." "Common Stocks and Uncommon Profits"- By Philip Fisher Another pioneer in the world of financial analysis, Philip Fisher has had a major influence on modern investment theory. The basic idea of analyz ing a stock based on growth potential is largely attributed to Fisher. " Common Stocks and Uncommon Profits" teaches investors to analyze the qua lity of a business and its ability to produce profits. Even though it wa s first published in 1958, Fisher's lessons are just as applicable today . "Stocks For The Long Run" - By Jeremy Siegel A professor at the Wharton School of Business, Jeremy Siegel makes the ca se for--you guessed it-- investing in stocks over the long run. He draws on extensive research over the past two centuries to argue not only tha t the return on equities surpasses all other financial assets but also t hat stock returns are safer and more predictable in the face of the effe cts of inflation. Peter Lynch: Learn to Earn, "One Up on Wall Street' or "B eating the Street" Peter Lynch came into prominence in the '80s as the manager of the specta cularly performing Fidelity Magellan Fund. All three of Lynch's books follow his common-sense approach, which insists that individual investors, if they spend the time and do their homework, can perform just as well or e ven better than the experts. Like any good academic, Malkiel backs his argument with piles of research and statistics. It would be an understatement to say that t hese ideas are controversial, many consider them just short of blasphemy . But whether or not you agree with Malkiel's ideas, it is not a bad ide a to take a look at how he arrives at his theories. "The Essays of Warren Buffett: Lessons for Corporate America" - Warren Bu ffett and Lawrence Cunningham Although Buffett seldom comments on his current holdings, he loves to dis cuss the principles behind his investments. This book is actually a coll ection of the letters Buffett wrote to shareholders in the past few deca des. It's the definitive work summarizing the techniques of the world's greatest investor. Get your choice of several FREE Investing Education kits mailed Today ! Explore our wide range of FREE off ers including CD-ROMs, Books, Home Study Courses, Software, and even Tra de Recommendations. "Rich Dad Poor Dad" - By Robert T Kiyosaki According to the author, this book is all about what the rich teach their kids about money - that the poor and middle class do not. Robert Kiyosa ki's message is simple but, at the same time, an important financial les son upon which to base the decision to start investing: the poor make mo ney by working for it while the rich make money by having their assets w ork for them. We can't think of a better financial book to buy for your kids. "Common Sense on Mutual Funds" - John Bogle John Bogle, founder of the Vanguard Group, is a driving force behind the case for index funds and against actively-managed mutual funds. He begin s with a primer on investment strategy before blasting the mutual fund i ndustry for the exorbitant fees it charges investors. Quite simply, if y ou own mutual funds, you should read this book. The Yale economist dispels the myth that the market is rational and instead expl ains it in terms of emotion, herd behavior, and speculation. In an ironi c twist, "Irrational Exuberance" was released almost exactly at the peak of the market. |