This is off topic, but can you well informed posters please recommend some basic books on the stock market for a beginner without a finance background? I had a friend recommend a Jim Cramer book, but I would trust some of the posters' recommendations more. Many thanks, I am trying to learn. I love this blogsite and I love the tutorials for the complete Ubernerd.
OT- for those huddling down in your bankerdome this weekend with your tinfoil hats, be warned- your tinfoil hat may be exactly what the government wants you to wear!!!
Buffett has said that most of his profits have come from relatively few of his investments. You need to be choosy about what you invest in and if you don't find a compelling investment, wait. Be sure not to overpay. You don't have to invest just to invest; Mr. Market will offer you things every day and you are permitted an infinite number of refusals. So be patient. I think in Buffett's case years go by in which he buys hardly anything if he can't find a "bargain" to his liking.
NEW YORK (AP) -- Standard & Poor's on Friday announced another massive round of downgrades for bonds backed by home loans that the credit-rating agency said are susceptible to default.
S&P cut its rating on $22.02 billion of bonds representing 1,413 classes sold from the fourth quarter of 2005 to the fourth quarter of 2006 and backed by "subprime" mortgages, or home loans issued to people with poor credit histories.
Any of the good books people normally mention pay lip service to the fact that people are irrational, markets are irrational but then proceed to treat it, and people and the whole stuff as if its populated by rational people, that continuous mathematics applies, that Gaussian normal distributions apply.
Their usual cover is : "in the long run" - I won't disagree with that - but the long run IMO is 20, 30, 40 years, not 2, 5 or even 10.
You'll also get stuff about diversified portfolio and about index investing and about dollar cost averaging. None of those ideas are bad - but they all assume "long run bullish" - i.e. this is INVESTMENT not a crap shoot( where the dice are loaded in a manner unknown to you and the loading changes again in a manner unknown to you).
There are some startling statistics provided in a now new and hopefully to become a classic that dispute the very idea of "investing" cf : Black Swan by Nassem Taleb).
I'd start with the classic books on manias :
Charles Kindleberger, Manias, Panics and Crashes: A History of Financial Crises
A much older book in an Olde Worlde Englyshe style ( which I enjoy and also illustrates that mania is AGE-OLD) is :
Charles Mackay, Extraordinary Popular Delusions and the Madness of Crowds
That book is FREE, in 3 volumes, at the website of the Gutenberg project ( a project worth supporting ) at:
Following the lead of smart investors is not a bad idea, if you can buy what they bought at about the same price. I recall around 1990 people thought big banks might fail, even Citicorp and Bank of Boston. Bank of Boston (since merged with???)was selling at about $4 a share. The Tischs bought a bundle then, and I should have too, but I was too scared. I should have known that they would not be dropping big bucks on a bank about to go bust and I should have followed their lead. Kicked myself ever since for my cowardice.
I think Buffett said to buy when others are fearful and to sell, if at all, when others are fearless.
The Rothschild fortune started, as I recall, from their buying up all the deserted property in a S. German town where the inhabitants had all fled due to the plague. They knew the plague didn't affect real estate and that the population would return, so they bought like crazy and made their first bundle.
I enjoyed "Market Wizards" by Jack Schwager quite a bit. Schwager interviews top traders and chronicles their successes and misadventures in the markets and what the lessons are they learned. Compelling stuff.
I think trading and flipping stocks is not wise, at least not for me. The more moves you make the more mistakes you can make. Buy low and hold is my motto.
This is off topic, but can you well informed posters please recommend some basic books on the stock market for a beginner without a finance background? I had a friend recommend a Jim Cramer book, but I would trust some of the posters' recommendations more. Many thanks, I am trying to learn. I love this blogsite and I love the tutorials for the complete Ubernerd.
OT- for those huddling down in your bankerdome this weekend with your tinfoil hats, be warned- your tinfoil hat may be exactly what the government wants you to wear!!!
See: this scientific report
I would suggest "A Random Walk Down Wall Street" as a good primer for someone looking to understand financial markets.
benj. Graham's THE INTELLIGENT INVESTOR ... accept no substitute.
hopeinsd
that was priceless!
Why not read a good book on Warren Buffett and his stock smarts? And the following is a good sensible book, in my opinion:
Amazon.com: The Only Investment Guide You'll Ever Need (9780156029636): Andrew Tobias: Books
Buffett has said that most of his profits have come from relatively few of his investments. You need to be choosy about what you invest in and if you don't find a compelling investment, wait. Be sure not to overpay. You don't have to invest just to invest; Mr. Market will offer you things every day and you are permitted an infinite number of refusals. So be patient. I think in Buffett's case years go by in which he buys hardly anything if he can't find a "bargain" to his liking.
NEW YORK (AP) -- Standard & Poor's on Friday announced another massive round of downgrades for bonds backed by home loans that the credit-rating agency said are susceptible to default.
S&P cut its rating on $22.02 billion of bonds representing 1,413 classes sold from the fourth quarter of 2005 to the fourth quarter of 2006 and backed by "subprime" mortgages, or home loans issued to people with poor credit histories.
http://www2.standardandpoors.com/spf/pdf/fixedincome/2006Oct19downgrades.pdf
Peter Lynch, One Up On Wall Street
Any of the good books people normally mention pay lip service to the fact that people are irrational, markets are irrational but then proceed to treat it, and people and the whole stuff as if its populated by rational people, that continuous mathematics applies, that Gaussian normal distributions apply.
Their usual cover is : "in the long run" - I won't disagree with that - but the long run IMO is 20, 30, 40 years, not 2, 5 or even 10.
You'll also get stuff about diversified portfolio and about index investing and about dollar cost averaging. None of those ideas are bad - but they all assume "long run bullish" - i.e. this is INVESTMENT not a crap shoot( where the dice are loaded in a manner unknown to you and the loading changes again in a manner unknown to you).
There are some startling statistics provided in a now new and hopefully to become a classic that dispute the very idea of "investing" cf : Black Swan by Nassem Taleb).
I'd start with the classic books on manias :
Charles Kindleberger, Manias, Panics and Crashes: A History of Financial Crises
Amazon.com: Manias, Panics, and Crashes: A History of Financial Crises (Wiley Investment Classics) (9780471467144): Charles P. Kindleberger, Robert Aliber, Robert Solow: Books
A much older book in an Olde Worlde Englyshe style ( which I enjoy and also illustrates that mania is AGE-OLD) is :
Charles Mackay, Extraordinary Popular Delusions and the Madness of Crowds
That book is FREE, in 3 volumes, at the website of the Gutenberg project ( a project worth supporting ) at:
Project Gutenberg Titles by Charles Mackay (Mackay, Charles, 1814-1889)
-K
After the Trade is Made is nice if you want to learn about the mechanics of the stock markets.
I wonder how many downgrades it will take before someone sues Fitch for gross incompetence in their initial rating.
Following the lead of smart investors is not a bad idea, if you can buy what they bought at about the same price. I recall around 1990 people thought big banks might fail, even Citicorp and Bank of Boston. Bank of Boston (since merged with???)was selling at about $4 a share. The Tischs bought a bundle then, and I should have too, but I was too scared. I should have known that they would not be dropping big bucks on a bank about to go bust and I should have followed their lead. Kicked myself ever since for my cowardice.
I think Buffett said to buy when others are fearful and to sell, if at all, when others are fearless.
The Rothschild fortune started, as I recall, from their buying up all the deserted property in a S. German town where the inhabitants had all fled due to the plague. They knew the plague didn't affect real estate and that the population would return, so they bought like crazy and made their first bundle.
I found this book a good intro for me...don't know the 4th ed, though.
Is this a good thing?
since fundamentals no longer matter in today's world, your best beginner book may be Oneils, 'how to make money in stocks
All good recommendations. For some old and more obscure ones try:
Battle for Investment Survival by Gerald M. Loeb (orignially written about 70 years ago)
The Go-Go Years by John Brooks
(about the 1960's -- manias are a regular feature of markets)
Where are the Customers' Yachts by Fred Schwed
(a classic from the 1920's)
When to Buy / When to Sell by Justin Mamis (older but real common sense approach by an old lion)
All of these are less "how it works" and more "what's happened in the past" books -- I think that the perspective is important.
John Hussman's weekly column (at hussmanfunds.com) is invaluable.
I enjoyed "Market Wizards" by Jack Schwager quite a bit. Schwager interviews top traders and chronicles their successes and misadventures in the markets and what the lessons are they learned. Compelling stuff.
I think trading and flipping stocks is not wise, at least not for me. The more moves you make the more mistakes you can make. Buy low and hold is my motto.