...to learn how to beat the stockmarket. Any must read literature?

[arabie]

Is there any twoplustwo quality material for the stock market? I was currency trading for a while and read the FXCM course and a few other sources. This is most of my experience with trading on a public market. Anyways, i want to start investing my poker winnings in stocks rather than currencies and wanted to know the correct winning path. What do i read and how do i learn to prosper? This material may very well not exist, but i guess i'm about to find out.. any help?

[lu_hawk]

twoplustwo equivalents:

Security Analysis by Benjamin Graham = Theory of Poker, this one gives you the nitty gritty stuff

Intelligent Investor by Benjamin Graham = HPFAP, this will help you learn how to apply it.

You Can Be a Stock Market Genius by Joel Greenblatt = SSHE, this is the one that should put you over the top and is the best book on investing out there but most people don't know about it.

[FatOtt]

[ QUOTE ]
Security Analysis by Benjamin Graham = Theory of Poker, this one gives you the nitty gritty stuff

Intelligent Investor by Benjamin Graham = HPFAP, this will help you learn how to apply it.

[/ QUOTE ]

Graham's stuff is good, but I think you got it backwards. Intelligent Investor gives you kind of a general, "Hey, this is how you should think about the market" viewpoint (e.g., weighing machine vs. voting machine; the concept of Mr. Market). Security Analysis is a dense book, much of it outdated (in terms of specifics - a lot more emphasis on bonds and railroad-type companies than the original poster is looking for).

[ QUOTE ]
You Can Be a Stock Market Genius by Joel Greenblatt = SSHE, this is the one that should put you over the top and is the best book on investing out there but most people don't know about it.

[/ QUOTE ]

This book is awesome, but is definitely not an introductory book. It deals in the land of "special situations" where the effort required is going to be a lot greater than more standard investing. Of course, the potential reward should be as well.

Warren Buffett's letters to shareholders are very good, and they're free at www.berkshirehathaway.com.

If you are going to invest in individual stocks, rather than index funds or mutual funds, you should really have:
1. A good grasp of accounting and finance. If not, pick up a used undergrad book of each one to make sure you understand financial statements and concepts like present value, discounted cash flow.
2. An understanding of how difficult it is to beat the market. Given the ability to invest in low-cost index funds that track the overall market, the international market, TIPS, or whatever with no effort on your part, you should seriously consider whether you want to make the investment and commitment to investing in individual stocks.
3. An understanding of the volatility inherent in security ownership. Much like poker, your results will be driven by some combination of luck and skill.

Good luck.

[adios]

..........

[zerosum]

FatOtt's post is a wonderful pointer in the right direction. It highlights good literature mentioned previously and it also poses some thoughful threshold issues that should be kept in mind while reading the mentioned literature.

I think it's also important to remain aware of just how much the stock market has changed since the days of Graham and even since the early days of Buffet's investing history.

What has changed? Many, many more institutional investors reviewing companies in a manner similar to that practiced by Graham and Buffet. The result has been far fewer opportunities to find the extreme bargains that Graham and Buffet found in relative abundance years ago.

It remains important all the same to have a good grasp of fundamental analysis. The Graham book provides an introduction and some of Robert Hagstrom's books regarding comtemporary application of Buffet's practices are worth a read as well.

Aside from books, I have several hundred articles in pdf from both academic and professional journals. Many might be of interest to you and others who frequent this forum. However, I don't have a means of posting them, either individually or as a collection. If any one who reads this has a solution to offer, PM me.

On a personal investing note, I have great respect for the fundamental analysis instructed be Graham and applied by Buffet, but I've never trusted my analysis regarding the industry and sector analysis required for the proper determination of whether a company that appears to be a bargain truly is one.

The solution that has served me well has been the application of statistical analysis of fundamental information in relation to demand for company shares. In other words, I crunch numbers regarding growth and valuation statistics and then cross reference those results with market activity for stocks of interest. I then hold an equal weighted ($) portfolio of the top 20 stocks until they fall out of the larger group of top 40 stocks, as reviewed on a monthly basis. The analytic foundation for the process is supported by a data going back to 1985 and is free of survivorship and look-ahead bias. The process has been live for several years now, and the results have been good. As a recent example, portfolio is up 23 percent for 2004 through last Friday, 11/19.

Note that I mentioned my personal investment process as a way to highlight that there is more than one means of applying fundamental analysis to the problem of stock selection.

[siriusradio]

All you have to do is invest in GOOD companies. I like to buy high and sell higher. I never look for a stock that's down and out thinkin it will make a comeback, there's a reason it's down and it's because the company sucks. I've had succes just investin in companys I know and use their products.

Toro (ttc) I own a lawn biz and use all toro equipment and there commercial products are THE BEST.

Ebay (ebay) got into this one from IPO was a seller over ebay and knew id be huge.

Sirius Sat. Radio (siri) This one's takin off right now. I listen to Howard Stern a lot and he said he's goign to sirius. I bought the stock that day, then bought a radio a few days later. The radio is awesome, will be using it for life. Been buying more and more of the stock.. just bought more today at 6.41 even though many say it's too high. TOO HIGH??????? Only way a stock goes from 2 to 100 is buy lookin too high.. this is a keeper for a good 10 years.

[laserboy]

Investing is a much broader and more complicated topic than poker, and as such there are countless investment methods and areas of expertise involved. As has been mentioned here, you could certainly do worse than emulating a guy like Warren Buffett. FWIW Buffett listed as his two favorite books "The Intelligent Investor" by his mentor Benjamin Graham and "Common Stocks for Uncommon Profits" by Phillip Fischer. There are also books like "The Warren Buffett Way" and "Buffettology" that give insight into his investment history and philosophy. And as has been mentioned, his letters to shareholders on the Berkshire Hathaway site are awesome.

I also think reading less methodological books like Peter Lynch's "Beat the Street" and "One up on Wall Street" are beneficial to investors in much the same way books like "The Biggest Game in Town" and "Big Deal" are to professional poker players. They help inspire new investment ideas and really get you pumped up to get out there and make money.

Bottom line: read as many good books as possible. The effort to read a few dozen investment books could literally mean millions of dollars over the course of your lifetime.

[AceHigh]

anything by William O'Neal is good. Pick up the Monday editions of IBD.

[theantelope]

Are you competing for the "Most acronyms in a twoplustwo post subject" medal?

[goodedesign]