Another book question

[DesertCat]

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Read anything by Swedroe or Ferri on why actively picking stocks for long term investing is a losers game.

You can't and won't win. (winning as defined by beating index).

See academic papers by Fama and French.


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Out of curiosity, how do these academics explain Warren Buffett's track record?

[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.

[Peter666]

"You can't and won't win. (winning as defined by beating index)."

If you are intelligent you can and will. How can that be possibly denied when so many have already done it. Do you honestly think a good business with a good product and good advertisement can't make more money than a bad business with a lousy product and bad advertising? This is bizzare.

[rockrock]

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"You can't and won't win. (winning as defined by beating index)."

If you are intelligent you can and will. How can that be possibly denied when so many have already done it. Do you honestly think a good business with a good product and good advertisement can't make more money than a bad business with a lousy product and bad advertising? This is bizzare.

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Active stock picking for long term investing is a losers game for an individual, end of discussion.

Google Fama and French, Modern Portfolio Theory, books by bernstein, swenson, swedroe and ferri.

The individual investor will lose, end of discussion.

It's the greatest lie ever perpetrated on humanity and I am surprised so many here believe it.

Note I am not talking about active day trading, which many have shown a propensity for success that must be more than luck. See thekirkreport.com for someone like this.

Otherwise read a Random Walk Down Wall Street.

Sell-side wall street has you brainwashed.

Good luck.

[rockrock]

[ QUOTE ]
[ QUOTE ]
Read anything by Swedroe or Ferri on why actively picking stocks for long term investing is a losers game.

You can't and won't win. (winning as defined by beating index).

See academic papers by Fama and French.


[/ QUOTE ]

Out of curiosity, how do these academics explain Warren Buffett's track record?

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Sell side Wall street loves buffet because they can point to him and everyone shakes their head up and down, with mouth wide open, believes they can do it.

Well you can't.

He is a business owner and investor that takes an active management role in the his companies.

Buying 10,000 shares of IBM does not make you a business owner.

Check out Effecient Frontier, Random Walk Down Wall Street and The Only Investment Guide you'll ever need if you want irrefutable evidence that active stock picking is a losers game.

Living the lie is more fun than indexing and asset allocation, I agree.

But its still a lie.

[Sniper]

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Active stock picking for long term investing is a losers game for an individual, end of discussion.


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There rewards of the market are available to those willing to invest the time! Don't belive everything you read, there are successful long term investors picking individual stocks.

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Sell-side wall street has you brainwashed.


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Sounds like someones brainwashed you!!!

[rockrock]

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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.

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Didn't Graham, later in life, admit that his securities analysis techniques no longer worked -- Too many eyeballs processing the same information.

To outperform, you need either inside information or access to the trading desks at the big brokerage houses.

I prefer to believe this guy who isn't trying to sell me anything and isn't trying to generate a sales commission

Fama and French have a bunch of Nobel prize winning economists they run around with who say the same thing,

Good luck, sounds like you are gonna need it.

[rockrock]

[ QUOTE ]
[ QUOTE ]
Active stock picking for long term investing is a losers game for an individual, end of discussion.


[/ QUOTE ]

There rewards of the market are available to those willing to invest the time! Don't belive everything you read, there are successful long term investors picking individual stocks.

[ QUOTE ]
Sell-side wall street has you brainwashed.


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Sounds like someones brainwashed you!!!

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Sniper you are one of my favorite posters - I try to read everything you write.

You are wrong about this. I'm sure there are those that do well day to day exploiting behavioral finance type ineffeciencies in the market - you may be one of them.

We are talking about long term investing and asset allocation.

Its a losers game.

Sure its fun in our ownership society, but there are volumes of work done by guys a lot smarter than me that convincingly argue asset allocation and indexing over individual stock picking and active management.

Take the time to check out The Effecient Frontier or Swensen's latest book (he run's Yale's endowment fund). A book by Swedroe called The Only Investment Guide You'll Ever Need makes one of the strongest cases against active picking I've read.

The evidence is overwhelming. The first 1/3rd of his book is filled with examples, academic studies, etc on why active stock picking is -EV.

Active stock picking is -EV unless you have superior information no one else has. I think the only exception is short term traders that take advantage of short-term behavioral idiocy by lame active stock pickers like we are discussing here.

[rockrock]

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This is the bible of fundamental business valuation. I have the 2nd edition and can vouch for the value of this book's content. It is comprehensive and complete. It's THE book for valuing a business you are considering for purchase. It's great for determining a equity's fair value.

Valuation: Measuring and Managing the Value of Companies, Fourth Edition (Hardcover)

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

Think, people!!