JL Collins - The Simple Path to Wealth

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BRUTE
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Re: JL Collins - The Simple Path to Wealth

Post by BRUTE » Tue Jun 20, 2017 11:04 pm

a cat in the mouth is better than two horses in the tree, right? shit, brute thinks he's getting his animal metaphors mixed up..

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Re: JL Collins - The Simple Path to Wealth

Post by ThisDinosaur » Mon Jun 26, 2017 8:19 am

Has anyone found any free online sources for Jacob's Startup Curriculum books? I prefer to read these things on my phone, or from a printed pdf.

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Re: JL Collins - The Simple Path to Wealth

Post by jacob » Mon Jun 26, 2017 9:35 am

@ThisDinosaur - Some libraries might offer a kindle version. None of them are public domain. They're ~1000 page textbooks. All of them would cost you $37.38 on amazon used (shipping cost included). It is a small price.

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Re: JL Collins - The Simple Path to Wealth

Post by ThisDinosaur » Mon Jun 26, 2017 9:47 am

It's a small price, but its less about my cheapness with money than my time frugality. I sneak my FI education into short bouts of reading at work or after I put kids to sleep (this can take hours). I can't carry an economics text book around at work, but I can peak at my phone for 15 minute stretches. Or pull a printed pdf in 8-point font out of my back pocket.

Do those books contain anything significantly different from other public domain books on the same topics?

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Re: JL Collins - The Simple Path to Wealth

Post by jacob » Mon Jun 26, 2017 10:01 am

ThisDinosaur wrote:
Mon Jun 26, 2017 9:47 am
Do those books contain anything significantly different from other public domain books on the same topics?
I don't know about any public domain books at that level, but these books are pretty standard when it comes to economy and finance. They are widely used ["classics"] and they used to form the basis of CFA level 1 (before the CFA institute got greedy like other textbook publishers). If you can find 5000 pages of public domain material that's newer than 1960/70 or so, it would probably cover the same material.

Since the books are so cheap (compared to the cost of paper and ink of printing them out), an alternative solution would be to just tear out the pages of the chapter you're currently reading and then throw it away after you're done.

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Re: JL Collins - The Simple Path to Wealth

Post by fiby41 » Wed Jul 05, 2017 12:13 pm

jacob wrote:
Mon Jun 26, 2017 10:01 am
Since the books are so cheap (compared to the cost of paper and ink of printing them out), an alternative solution would be to just tear out the pages of the chapter you're currently reading and then throw it away after you're done.
Camera phones are a thing.

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Re: JL Collins - The Simple Path to Wealth

Post by jacob » Wed Jul 05, 2017 12:25 pm

@fiby41 - Haha! Be my guest ... How do you write notes in the margin on a cellphone picture?

This is where I would say something about time-value of money and accept "hourly wage" arguments to justify my personal level of laziness and comfort ;-) Everybody has their limits. Also, I AM the guy reading 1000-page textbooks on the subway ... hauling them around in a backpack for a two mile walk between the train station and home.

I recall having to copy an out-of-print/ever-published/stapled 120 page book(*) during my masters project in the late 1990s. The copier was in a small room and only accepted manual feed. After 15 minutes and 20-30 pages, the stench of ozone was strong.

I don't really have any theoretical objections to using a phone to photograph every page in a 1000 page book and subsequently reading it on a 3" screen though. Maye there's even an app for that!

(*) About applying this https://en.wikipedia.org/wiki/Lanczos_algorithm to nuclear transition levels which require very large and otherwise non-computational matrices. Very clever stuff. Nerds might enjoy. Otherwise, just ignore. Danish nerds (age 40-70 or so) might appreciate how I managed to piss off all the other users on the Uni-C supercomputer because I figured out how to use chron-jobs to load up the queue with my jobs. Wonder if Uni-C is still a thing. Google shows nothing.

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BRUTE
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Re: JL Collins - The Simple Path to Wealth

Post by BRUTE » Thu Jul 06, 2017 1:09 am

brute has never understood why some humans write into their books while reading. brute has tried it, and it has only distracted him from reading.

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Re: JL Collins - The Simple Path to Wealth

Post by ThisDinosaur » Thu Jul 06, 2017 6:08 am

Agreed. I use notes to summarize long texts in my own words. Leaving out things I already know, or think I'll remember with one reading.

@Jacob, Given my specific constraints or "personal level of laziness and comfort," what would be the next best thing to those specific books? What are some of the high yield concepts you learned from them?

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Re: JL Collins - The Simple Path to Wealth

Post by jacob » Thu Jul 06, 2017 7:45 am

@TD - Given my specific constraints and personal level of laziness and comfort, I can't tell you :P

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Re: JL Collins - The Simple Path to Wealth

Post by ThisDinosaur » Thu Jul 06, 2017 9:04 am

Dammit! But I'm so very very lazy and uncomfortable!

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Re: JL Collins - The Simple Path to Wealth

Post by Fish » Thu Jul 06, 2017 9:39 am

@TD I got the McConnell/Brue econ textbook and finished the first part (6 chapters/110 pages) which was a remedial but well-written and well-organized review of basic economic concepts (e.g. supply and demand).(*) There is more difficult, less familiar/intuitive material ahead. Even if the concepts would not be novel to you, there is a value in studying the book to absorb the author's framework and organization and see connections between concepts that are otherwise not apparent. IOW, there's a big difference between having a collection of facts and also being able to see the connections between them.

With learning, you can be Pareto-efficient in acquiring facts by focusing on the big ideas. I don't know of a way to apply hacker-mentality to speed up the connection of ideas. I either have to spend a lot of time thinking about the subject, or read what someone else has written (after they have spent a lot of time thinking about it themselves). Reading a textbook is already very time-efficient in this regard.

In my simplistic view, a textbook is comprised of:

1. Concepts
2. Elaboration of the concepts
3. Connections between the concepts, and to other ideas

CliffsNotes will contain an outline of facts (1) and maybe an elaboration on the most important ideas of a book (2). If you take this 80/20 approach to learning, you likely think textbooks are full of fluff. Otherwise, you'll realize that (3) is being sacrificed due to constraints of the format and reader.

What we have is not a shortage of facts (which humans and computers already do very well), but a shortage of understanding of how those facts are connected. I have always thought of a "Jacob" as a person who a) reads a lot, and b) connects the dots. If this is what you aspire to, it would make sense to read textbooks to absorb the connections that have already been made, and free your mind to work out the connections that are not yet widely known. That's where the alpha is (for now).

(*)I have found it very interesting reading this book with an ERE perspective, which makes me question a lot of fundamental economic assumptions, such as wants being unlimited, and specialization being advantageous. While this may be true for humans in aggregate, it does not need to hold for the individual.
McConnell/Brue 15e, p.62 wrote:The majority of consumers produce virtually none of the goods and services they consume, and they consume little or nothing of what they produce.
As we well know, being economically independent requires operating under a different set of behaviors. Kind of like those who don't learn history are doomed to repeat it, those who do not learn economics are destined to be controlled by it.

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Re: JL Collins - The Simple Path to Wealth

Post by ThisDinosaur » Thu Jul 06, 2017 11:09 am

Well, in all seriousness, yes I do like shortcuts when they actually deliver. But I would read these texts cover to cover if I could get them in my convenient, preferred format. My experience is that some textbooks really are better than others. The 'fluff ratio' is determined both by the quality of the writing and my level of knowledge before I start reading. But I doubt Jacob would have recommended them if he thought they weren't high quality.

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Re: JL Collins - The Simple Path to Wealth

Post by Fish » Fri Jul 07, 2017 11:56 am

ThisDinosaur wrote:I would read these texts cover to cover if I could get them in my convenient, preferred format.
Several books in Jacob's curriculum have newer editions which include ebook formats. For example:

(2) https://www.amazon.com/gp/aw/d/B00B82G7UG
(3) https://www.amazon.com/gp/aw/d/B00HZ3AZ6E
(4) https://www.amazon.com/gp/aw/d/B00I51KLBE
(5) https://www.amazon.com/gp/aw/d/B01DUEBDIK

Prices range from $93-249 (about 50-75% off if renting). By comparison the entire 7-volume paper book collection for <$40 seems like a great deal.

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Re: JL Collins - The Simple Path to Wealth

Post by ThisDinosaur » Mon Jul 10, 2017 1:58 pm


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Re: JL Collins - The Simple Path to Wealth

Post by jacob » Mon Jul 10, 2017 2:59 pm

@TD - To be clear .. those aren't technically MY recommendation as much as they're the standard recommendation. They're what used to be recommended by the CFA Institute before they started binding their own books (mostly using licensed chapters from those books) and charging much much more.

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Re: JL Collins - The Simple Path to Wealth

Post by ThisDinosaur » Mon Jul 10, 2017 3:46 pm

Well, having read them, do you have an opinion about their individual quality? Which ones had the biggest impact on your investment style?

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Re: JL Collins - The Simple Path to Wealth

Post by jacob » Mon Jul 10, 2017 4:05 pm

@TD - I don't have an opinion other than that reading all of them is "good enough" as a starting point. I think you're missing the point. These books only serve to establish a proper foundation that allows you to have an informed opinion when you evaluate various investment styles you get from elsewhere or to build your own ideas on. It's a freshman-level curriculum of financial analysis.

These are not the 15 minute TED-talk novelties you're looking for(*) ...

(*) Attempting to use the force here :-P

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Re: JL Collins - The Simple Path to Wealth

Post by ThisDinosaur » Mon Jul 10, 2017 5:23 pm

Well, insofar as im only reading them to make better investment decisions, that sounds fine. You said these books helped you move beyond the Bernstein/Shiller popular book level of insight, which is roughly my current level. I have been operating under the assumption that you quit your CFA program because there were diminishing returns along an S-curve in further formal education in finance. Is that a fair assessment?

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Re: JL Collins - The Simple Path to Wealth

Post by jacob » Mon Jul 10, 2017 5:48 pm

@TD- No it's not. I quit because I realized that typical CFAs spend their time site-visiting or calling investor relations in order to keep the level above (investment manager) supplied with up-to-date summaries which are checked, marked, filed, and ignored. It sounded depressingly too much like doing high school homework. There were other reasons as well like timing and other priorities. You know the joke about the difference between a mathematician and a philosopher where the latter is the one who never throws anything in the waste basket. Well, a financial analyst is someone who throws almost everything in the waste basket.

Now that's the job description. However, if you're analyzing for your own purposes, you don't have to write it down and that saves a lot of time. You just have to have an informed understanding of what you're reading. If you have your own money, you can skip to the next level. If you're looking to short-cuts to an informed understanding that minimize reading, this will never work, because that curriculum is just the beginning. Investing is an ongoing process. It's not a hack. Reading those books will not allow you to pick a better "lazy life-hack approach". If that's what you're looking for, just go total stock market and live and let die.

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Re: JL Collins - The Simple Path to Wealth

Post by ThisDinosaur » Mon Jul 10, 2017 7:58 pm

Sounds like you're saying there's no middle ground between total stock market, and what you're doing. I dont buy that. Even Graham said the less enterprising investor (or whatever term he used) could just pick the 20 biggest dow stocks and shift between 25 and 75% equity based on market valuations. And while "dont be lazy" is always good advice, there is an opportunity cost to increasing effort toward something with diminishing returns. Could I beat the broad market consistently for the next 60 years? It will take me 60 years to find out. In the mean time, im just trying to maximize my efforts at minimizing my ignorance.

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Re: JL Collins - The Simple Path to Wealth

Post by jacob » Tue Jul 11, 2017 7:28 am

@TD - We seem to be talking across each other. You're talking various strategies. I'm talking about what is required to have an educated opinion about various strategies which I think is about the college freshman level for a business/finance student and that is what I'm recommending as a minimum.

That is being able to understanding critically analyze the difference between 100% TSM and 25--75% in 20 stocks depending on valuations. There is no short-cut to such "skills". I prefer SWAN strategies but I need to understand what qualifies as a SWAN strategy.

If you don't want to have an informed opinion, there's literally a million books out there each hawking their own strategy and justifying why theirs is the best ever. The issue I would have with that is that you don't know what the author isn't telling you because of a lack of general foundation. But if you're still comfortable putting six figures or several years of salary on the line based on that that's a position many take.

Maybe that works, but to me that's buying climbing gear on the internet presuming one can get safely down from the top of the building after watching a few youtube instructions. But clearly that's just me ...

Recall the recommendation I wrote for the book:
jacob wrote:Personally, I don't follow the strategy laid out in Collins' book. But then, I have spent years of work and study developing and managing my own. For those who don't want to do this, I'd recommend this book. If your goal is financial independence, you're going to need strategies that are optimal for your skills, talents, and temperament. Those in The Simple Path to Wealth will serve you well.

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Re: JL Collins - The Simple Path to Wealth

Post by ThisDinosaur » Tue Jul 11, 2017 7:41 am

We might be talking past each other. Probably my fault.

You said these books are "good enough" (your words) to result in a freshman business major level of understanding. This is appealing to me, so I'm reading them. But I'm asking you, as someone who has already walked the path, if you still think that's the most efficient way to get there.

I've read lots of books in my life. Textbooks and otherwise. Some were good, some sucked, and some had only one good idea that could be summarized in a paragraph. I don't need an ERE TED talk. Just some guidance on whether I'm following the most effective path for my goals.

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Re: JL Collins - The Simple Path to Wealth

Post by jacob » Tue Jul 11, 2017 7:59 am

@TD - I think it's the best/only way. I suppose you can ask some finance professor if they've discovered a better way by now. It's conceivable that there are audio lectures on youtube. I wouldn't know anything about that. I read much faster/deeper than I listen. I certainly think that reading the standard textbooks is far far better than trying to piece together an operating understanding by reading popular investment strategy books. You'll know far more after reading text books that you would after reading a dozen books along the lines of e.g. Collins, Swedroe, Bernstein, Ferri, Greenblatt or other little books of investing etc. and using those to piece together a theory of economics and finance. I wasted a long time on that approach when I was starting out.

Like with textbooks, you get out of them what you put into them. I spent some time building a couple of analyses out of 10Ks. I suggest picking a simple company. I remember using FAST: http://investor.fastenal.com/financials.cfm ...

My guess though ... is that if you're looking for economy of effort, you're probably not going to get any alpha out of it. Economy of effort works if you're trying to solve a fixed problem, such as sweeping the floor, because the relation between effort and result is linear. It doesn't work well when there's an opponent, like in boxing or investing, where the relation shows bifurcation. Learning is not the same as getting grades.

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Re: JL Collins - The Simple Path to Wealth

Post by 7Wannabe5 » Tue Jul 11, 2017 8:35 am

I still haven't gotten around to developing an interest in finance, but mightn't the general method towards erudition of starting with textbook and delving for original sources also prove helpful? I prefer this method because original sources are usually less dry reading and often reveal the common textbook error of repeating not-entirely-valid examples or analogies or models. For instance, I laughed out loud a few times while reading "On the Origin of Species", and I doubt that would happen if I attempted to read a modern textbook on the topic.

So, why wouldn't I be better served by reading some selection such as "Reminiscences of a Stock Operator" by Edwin Lefevre, "The Wealth of Nations", "Principles of Political Economy and Taxation" by Ricardo, "The Theory of the Leisure Class" and "The Theory of Investment Value" by Williams, than some dull textbook?

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