Investment: what to read next?

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knap82
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Investment: what to read next?

Postby knap82 » Wed Sep 14, 2016 2:33 am

Hi, all

I am keen on learning more on investments in the stock market and I need some inspiration to my next book on the subject.

Recently I have read:
The psychologi of finance, Lars Tvede
The intelligent investor, Benjamin Graham*
The Dhandho investor

I am still quite new to the world of investing but keen to learn more.

What can you recommend?

/knap

*edited a morning mistake in the name. Gave Benjamin Franklin a bit more credit than usual ;o)
Last edited by knap82 on Thu Sep 15, 2016 5:19 am, edited 1 time in total.

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FBeyer
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Re: Investment: what to read next?

Postby FBeyer » Wed Sep 14, 2016 3:02 am

What do you want to know about:
technical analysis?
fundamental analysis?
lazy portfolio construction?
More psychology?
The Efficient Market Hypothesis?
Accounting?
Angel Investing?
The History of money and stocks?
Futures, options, and derivatives?

The Four Pillars of Investing is a good starting point to get an overview of some of the many factors that go into investing, especially as in introduction to indexing. Why stocks specifically? Are you not interested in bonds, reit, precious metals or commodities?

Also: Benjamin Franklin? :D

ducknalddon
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Re: Investment: what to read next?

Postby ducknalddon » Wed Sep 14, 2016 4:07 am

I've just finished A Random Walk Down Wall Street: The Time-tested Strategy for Successful Investing by Burton G Malkiel, the first half of the book is a long description of all the mistakes investors have tended to make through history, it was a fascinating read.

wood
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Re: Investment: what to read next?

Postby wood » Wed Sep 14, 2016 6:57 am

Which books do you recommend for:
- Swingtrading
- technical analysis
- fundamental analysis
- Futures, options, and derivatives

jacob
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Re: Investment: what to read next?

Postby jacob » Wed Sep 14, 2016 10:05 am

@knap82 - It depends on what or how you want to learn. For example, if you asked me which book you should read to learn physics, I would give you two different choices. If you wanted to "learn about" physics, I would give you a popular science book by Brian Greene or Stephen Hawking about string theory or black holes or some such. You would "learn about" a lot of exciting physics, but you wouldn't really have "learned" physics, not even by a long stretch. If the goal was to "learn physics" rather than "learn about physics", I would give you a textbook on something simple, like classical mechanics, and tell you to go practice the end of chapter problems. After doing this you would have learned how to do some physics.

In investing, there are three different kinds of books which is kinda unusual. In investing, academics and professionals have split up in two distinct communities which have rather different foci, access to data, ...

1) Retailers - Most readers start and stop here. The aim here is to "write about" investing which is fine for the average retail investor who just want a portfolio plan they can have faith in. The downside here is that one's picture will be rather incomplete but one will not know it. Stick with retail books and one ends up as an 'advanced beginner' on the learning scale or the top of Mt Stupid in terms of internet debates.
2) Academics - This is textbook territory. Reading these fixes the problems of not knowing what one doesn't know. On the flip-side, there's very little directly applicable here. Sure, you'll learn how to calculate a P/E, but you won't know how to use that to make a buying or a selling decision. The other downside is to not realize that "the map is not the territory" and that academic theories are often only approximate descriptions of reality. The assumption of randomness comes to mind.
3) Practitioners - These are typically written for/by professionals and deal with a specific strategy. The problem here is that none of these strategies are directly useful. Either the strat is outdated by the time the book comes out; or it will leave out some secret sauce; or the book just serves to draw in "outside money" from amateurs. I suppose that was the downside. These books can be read for inspiration.

Pedagogically, I'd recommend the "serious student" to start with (2) and then read from both (1) and (3) trying to fit them into the framework described in (2) while using a serious dose of critical thinking. Here's a list of (2)-books: http://earlyretirementextreme.com/start ... sting.html

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BRUTE
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Re: Investment: what to read next?

Postby BRUTE » Wed Sep 14, 2016 11:33 am

another complication for 3) is that different investors move in completely different arenas, or even play different games. even if brute magically gained the insight of a super-quant, there isn't much he could do with that knowledge, because they trade in completely different spheres. whereas physics at least generally seems to apply the same to most humans. well maybe it would be as useless to know how to correctly build a space ship, because brute isn't NASA.

knap82
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Re: Investment: what to read next?

Postby knap82 » Thu Sep 15, 2016 5:42 am

Hi, all

Thank you for all the answers.

@FBeyer - Stocks is where I have started and I find it quite interesting so I'll keep my focus there for now learning more and moving towards a strategy that fits my self and my journey to FI. Bonds, REITs and metals is also something I'll look into but as of now I am trying to limit the shopping around and focus a bit.

And the good old Benjamin F. got the best of me on an early morning with a new born sleeping on the arm - thanks for noticing ;o)

@Jacon - thank you for the thurow answer - and it makes perfectly sense. And I am still in the beginners section with a steep learning curve in what not do in investment. Next stop is to get the fundamentals straight so I know what to do - and more importantly why. I'll dig into the list of No. 2's.

@Brute - thank for the insights - guess i just have to get my own. Next stop NASA?

/knap

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Chad
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Re: Investment: what to read next?

Postby Chad » Fri Feb 03, 2017 10:08 am

A book I'm just finishing now provides a very nice macro primer for global investing in both emerging and developed markets. It also provides a nice economic tutorial on good government economic policies. All backed by examples and examination of long-term trends.

The Rise and Fall of Nations: Forces of Change in the Post-Crisis World
https://smile.amazon.com/gp/product/039 ... PDKIKX0DER

IlliniDave
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Re: Investment: what to read next?

Postby IlliniDave » Fri Feb 03, 2017 12:33 pm

If you are more interested in investing than in trading/speculating, you might try the updated (Tenth Anniversary?) edition of Common Sense on Mutual Funds by Jack Bogle. Of course he's the founder of Vanguard and started the first successful index fund, so he's writing from a crisp point of view which he's very open about. In my opinion Bogle has impressive insight and boils things down to relatively simple terms, "the relentless rules of humble arithmetic" as he calls them, (although his writing vocabulary and prose style is dense). It might put you on the top of Jacob's Mt. Stupid, but the vista will not be a lonely one. You'll at least learn what an index fund really is and what the strategy behind them is, rather than the caricatures out there promoted by their opponents, and that the basic strategy is applicable to any mutual fund selection/investment. You'll also learn there's no secret sauce to it, and that Bogle himself wouldn't be a representative Boglehead. If you don't have any interest in mutual funds (of any variety) this book would mostly be a waste of time unless you're reading on the topic just for the sake of reading on the topic.

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Gilberto de Piento
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Re: Investment: what to read next?

Postby Gilberto de Piento » Fri Feb 03, 2017 1:47 pm

I agree with everything IlliniDave said.

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jennypenny
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Re: Investment: what to read next?

Postby jennypenny » Fri Feb 03, 2017 7:21 pm

Have you checked out the reading list on the ERE Wiki?


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