The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns
Owning a diversified portfolio of stocks and holding it for the long term is a winne's game. Trying to beat the stock market is theoretically a zero-sum game (for every winner, there must be a loser), but after the substantial costs of investing are deducted, it becomes a loser's game. Common sense tells us, and history confirms, that the simplest and most efficient investment strategy is to buy and hold all of the nation's publicly held businesses at very low cost. The classic index fund that owns this market portfolio is the only investment that guarantees you with your fair share of stock market returns.
Filled with in-depth insights and practical advice, The Little Book of Common Sense Investing will show you how to incorporate this proven investment strategy into your portfolio. It will also change the very way you think about investing. Successful investing is not easy. (It requires discipline and patience.) But it is simple. For it's all about common sense.
Common Stocks and Uncommon Profits and Other Writings:
Philip A. Fisher
"I sought out Phil Fisher after reading his Common Stocks and Uncommon Profits and Other Writings. When I met him, I was as impressed by the man as by his ideas. A thorough understanding of the business, obtained by using Philâ€™s techniques ... enables one to make intelligent investment commitments."
â€“â€“ Warren Buffett
An excellent book on fundamental analysis and long term investing.
Learn to Earn: A Beginner's Guide to the Basics of Investing and Business
In Learn to Earn, Lynch and Rothchild explain in a style accessible to anyone who is high-school age or older, how to understand a company annual report, and why everyone should pay attention to the stock market. They explain not only how to invest, but also how to think like an investor.
Many investors, including some with substantial portfolios, have only the sketchiest idea of how the stock market works. The reason is that the basics of investing - the fundamentals of our economic system and what they have to do with the stock market - aren't taught in school. At a time when individuals have to make important decisions about saving for college and 401(k) retirement funds, this failure to provide a basic education in investing can have tragic consequences.
The Jubak Picks: 50 Stocks That Will Rebuild Your Wealth & Safeguard Your Future
Jim Jubakâ€™s top-down stock-picking method is based on being in the right asset at the right time, ensuring that your portfolio is composed of stocks with the wind at their back and that are trending upward. He shows how to find the best stocks by first understanding ten macro trends changing the world, including:
â€¢ The economiesâ€”Brazil, Russia, Vietnam, India, China, and the "rest of the gang"â€”driving global demand
â€¢ The rising tide of retirement money in an older and wealthier world
â€¢ The commodities crunch in a world ever more hungry for natural resources
â€¢ The end of cheap oil
How to Trade In Stocks:
"Jesse Livermore was a loner, an individualist-and the most successful stock trader who ever lived. Written shortly before his death in 1940, How to Trade Stocks offered traders their first account of that famously tight-lipped operator's trading system.
In this new edition of that classic, trader and top Livermore expert Richard Smitten sheds new light on Jesse Livermore's philosophy and methods. Drawing on Livermore's private papers and interviews with his family, Smitten provides priceless insights into the Livermore trading formula, along with tips on how to combine it with contemporary charting techniques. Also included is the Livermore Market Key, the first and still one of the most accurate methods of tracking and recording market patterns."
The Interpretation of Financial Statements:
Benjamin Graham has been called the most important investment thinker of the twentieth century. As a master investor, pioneering stock analyst, and mentor to investment superstars, he has no peer.
This book is his timeless guide to interpreting and understanding financial statements. "if you have precise information as to a company's present financial position and its past earnings record, you are better equipped to gauge its future possibilities. And this is the essential function and value of security analysis."
Written just three years after his landmark Security Analysis, The Interpretation of Financial Statements gets to the heart of the master's ideas on value investing in astonishingly few pages. Readers will learn to analyze a company's balance sheets and income statements and arrive at a true understanding of its financial position and earnings record. Graham provides simple tests any reader can apply to determine the financial health and well-being of any company.
This volume is an exact text replica of the first edition of The Interpretation of Financial Statements, published by Harper & Brothers in 1937.
Highly practical and accessible, it is an essential guide for all business people--and makes the perfect companion volume to Graham's investment masterpiece The Intelligent Investor.
Debunkery: Learn It, Do It, and Profit from It-Seeing Through Wall Street's Money-Killing Myths
Many investors fail to question if what they believe is trueâ€”and are therefore blinded by tradition, biases, ideology, or any number of cognitive errors. The problem is, the errors don't seem like mistakesâ€”they seem like smart, intuitive, and/or widely recognized investing "wisdoms."
In short, accessible, and highly entertaining chapters, Debunkery details and debunks 50 common Wall Street myths.
Reminiscences of a Stock Operator:
Edwin LefÃ¨Vre, Jesse Livermore
"Reminiscences of a Stock Operator is the thinly disguised biography of Jesse Livermore, a remarkable character who first started speculating in New England bucket shops at the turn of the century. Livermore, who was banned from these shady operations because of his winning ways, soon moved to Wall Street where he made and lost his fortune several times over. What makes this book so valuable are the observations that LefÃ¨vre records about investing, speculating, and the nature of the market itself."
Buffett: The Making of an American Capitalist
This illuminating biography reveals a man whose conscientiousness, integrity, and good humor exist alongside an odd emotional isolation. Buffett also masterfully traces his life: his enormously successful partnership; his early, inspired investments in American Express and Geico; his companionship and investment with Katharine Graham of the Washington Post; his role in the Capital Cities purchase of ABC; and his rescue of the scandal-ridden Salomon Brothers.
3 Dividend Growth Stocks selected by Gordon Model
"In implementing the hypothesis it must be recognized that the stockholder is interested in the entire sequence of dividend payments that he may expect and not merely the current value.
The yield is 4%. The 5-yr dividend growth rate is 6.4%. Thus the Gordon yield would be 10.4%. The fair p/e would be 1/ Gordon yield=9.61. The higher the dividend growth rate, the more the stock is improperly modeledâ€”due to its deviation from bond status. In practice, I simply add the yield + dividend growth rate to get a fair p/e of 10.4."
Who Really Cooks the Books?
"For many years, I've had little confidence in the earnings numbers reported by most corporations. I'm not talking about Enron and WorldCom - examples of outright crookedness. Rather, I am referring to the legal, but improper, accounting methods used by chief executives to inflate reported earnings.
The most flagrant deceptions have occurred in stock-option accounting and in assumptions about pension-fund returns. The aggregate misrepresentation in these two areas dwarfs the lies of Enron and WorldCom."
Pitfalls in Retirement
A very good, detailed, overview of reasonable retirement planning and retirement spending expectations.
"Spending rates of 3% or less are likely sustainable, while those much above 5% may not be. Careful research confirms these observations.
The sustainability of spending rates within the range of 3â€“5% depends on the period in question as well as the other factors noted above"
Curious Cat Investing Blog post on the paper
The Great Financial Scandal of 2003
An exploration of an imaginary company.
"This price decline, in turn, triggered a careful examination of Quant Techâ€™s financial reporting practices which, at long last, convinced nearly everyone that a very large majority of Quant Techâ€™s reported earnings had long been phony earnings and that massive and deliberate misreporting had gone on for a great many years. This triggered even more price decline for Quant Tech stock until in mid-2003 the market capitalization of Quant Tech was only $140 billion, down 90% from its peak only six months earlier."
Fund manager keen on Malaysia
"Mobius said that over the past 25 years, he had been telling people that equities was the way to go and emerging markets were the places to be. Supply of stocks is growing in Asia and is actually soaking up the flow of hot money from offshore to this region.
'I am bullish on property everywhere. I put one third of my own money in equities, a third in property and a third in cash.'"
5 Keys to Successful Dividend Investing
"build a diversified portfolio of hand-selected dividend payers with above-average but modest yields, well-covered by plenty of free cash flow. Pair this group with high-quality investment-grade bonds and a smattering of REITs, and you'll have built yourself a well-rounded income-focused portfolio that can help you achieve solid profits without undue risk."
Why stocks beat gold and bonds
"Ideally, these assets should have the ability in inflationary times to deliver output that will retain its purchasing-power value while requiring a minimum of new capital investment. Farms, real estate, and many businesses such as Coca-Cola, IBM, and our own See's Candy meet that double-barreled test."
Investing Web Sites and Resources
"We handpick articles from the world's top market blogs, money managers, financial experts and investment newsletters - publishing approximately 250 articles daily. Seeking Alpha gives a voice to over 3000 contributors, providing access to the nation's most savvy and inquisitive investors."
"The goal is to bring you the best market intelligence that I can on a schedule that keeps you at least one step ahead of the market.
What's my definition of market intelligence? Iâ€™ve always aimed for a mix of analysis that lets you understand how things work â€” money flows, new technologies, company strategies, economic trendsâ€”and specific stock picks that let you make money from that analysis. When I make a buy or a sell I want you to understand the logic and facts behind it so you can say, Yes, that makes sense for me, or No, I disagree because..."
Canadian Value Investing
"- Investment decisions should be few and far between. Use a 20 spot punch card (Patient)
- Investment Concentration - No more than 10 positions.
- Diversification is an excuse for ignorance.
- Large periods of inactivity. I prefer doing nothing; it's easier than making a decision.
- Read, Read, Read..."
The Motley Fool
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