Another book question

[Sniper]

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Its a great book that everyone else has read, making its contents and practical application irrelevant.

Think, people!!

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First, many people are clueless and haven't read very much of anything. Even, of those who have done some reading, a very small percentage have read that particular book.

Second, even if everyone knew how to do the same thing the same way, there would still be options for taking advantage of the "crowd psychology" that would therefore occur!

[rockrock]

[ QUOTE ]
[ QUOTE ]
Its a great book that everyone else has read, making its contents and practical application irrelevant.

Think, people!!

[/ QUOTE ]

First, many people are clueless and haven't read very much of anything. Even, of those who have done some reading, a very small percentage have read that particular book.

Second, even if everyone knew how to do the same thing the same way, there would still be options for taking advantage of the "crowd psychology" that would therefore occur!

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There are huge value funds run by people that have read this book. Dodge and Cox, the myriad vanguard value funds, fidelity, t rowe, americamn, oakmark, blah blah blah.

The information in the book is useless for the individual investor because too many people with too much money know are familiar with the techniques.

The average investor is competing with literally hunderds of billions of dollars seeking seeking to buy value stocks (and all other kinds of stocks as well).

How delusional and arrogant to think could do better. Buy IJJ and IJS, 2 value indexes instead.

[DesertCat]

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There are huge value funds run by people that have read this book. Dodge and Cox, the myriad vanguard value funds, fidelity, t rowe, americamn, oakmark, blah blah blah.

The information in the book is useless for the individual investor because too many people with too much money know are familiar with the techniques.


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Value techniques have been well known since the 1930's. It hasn't stopped talented value investors from beating the market.

This is because technique is only a portion of what you need. You also need patience, and judgement. That's what separates the best from the laggards.

[Sniper]

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The average investor is competing with literally hunderds of billions of dollars seeking seeking to buy value stocks (and all other kinds of stocks as well).


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Individual investors are far more nimble than large funds can ever hope to be. Individual investors can take risks that funds can't.

Don't forget, the guys running these funds also don't have crystal balls, they are just individual investors with alot more money to work with and a larger support system, which gives them the disadvantage of higher costs to do what you can do rather cheaply, with only an investment of your time.

If you can identify the same opportunites as these funds do, before or slightly after they identify them, you will be very rich very quickly by riding their buying [img]/images/graemlins/wink.gif[/img]

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How delusional and arrogant to think could do better.

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It is not arrogant, or delusional to think that an individual investor willing to put in the time, can and will outperform mutual fund managers... in fact, it is fairly close to a sure thing.

I personally know many long term investors that outperform the indexes, and I actively trade with many short term traders that are absolutely killing the markets!

My knowledge is based in reality, not some theoretical argument by someone who wrote a book [img]/images/graemlins/wink.gif[/img]

[FishHooks]

I've read "A Random Walk Down Wall Street" and I agree with a previous poster, its not good for the kind of stuff I'm looking for. I'm not a huge fan of day traning or picking individual stocks, but I would like to know what all the stats on the company really means.

[DesertCat]

Ben Graham's "The Intelligent Investor" has a new edition, with commentary added by Jason Zweig and it's only $10.85 on Amazon. This book is one of the best introductions on how to invest in stocks, and Jason's commentary really updates it well.

More detailed information on how to analyse individual stocks and bonds can be found in Graham & Dodd's "Security Analysis", which is the bible for fundamental analysis of a company's true worth. This book is much more expensive, lengthy, difficult to read, etc, but well worth it once you are ready.

[FishHooks]

I have yet to read this book, but baught it a month ago, and definatly want to read it soon, loads of work in college it's hard to find time to read for pleasure, when I allready have to read 50-100 pages of stuff a night.

[DesertCat]

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I have yet to read this book, but baught it a month ago, and definatly want to read it soon, loads of work in college it's hard to find time to read for pleasure, when I allready have to read 50-100 pages of stuff a night.

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Well I didn't recommend it for a "pleasure" read Graham can be a little dry, but like I said, Zweig helps update the concepts and relate them to things that happened in the bubble, which really freshens things up.

Also, if you ever decide to graduate to "Security Analysis" I just realized you can get the original Graham versions on Amazon. I've actually only read the most recent edition (updated by a guy named Cottle) and a few things in it strike me as rather ungraham-like. I've ordered his 1951 edition and should be reading it soon. I'll post a review if I get a chance.

If I wanted to read "security analysis", do you think its necessary to read "intelligent investor" first (assuming I have relatively basic knowledge of the stock market / investing)? Thanks for your insight, and congrats on your track record.

[DesertCat]

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If I wanted to read "security analysis", do you think its necessary to read "intelligent investor" first (assuming I have relatively basic knowledge of the stock market / investing)?

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No it's not "necessary" but II is a much easier and quicker read. SA is basically a textbook filled with detailed examples of how to analyse stocks and bonds. II gives you the philosophical overview that can sometimes be lost in the forest of SA. But you might also find II short on necessary details.