
Ask HN: How did you learn about stocks and the market? - n13
I find it really hard&#x2F;confusing to understand stocks and the market from the investing perspective. I&#x27;m a beginner in this domain. So, I keen to learn about it so that I can understand the technical details too. I did a search and found out that everybody is recommending &quot;The Intelligent Investor&quot; by Benjamin Graham. I&#x27;m kind of person who likes to watch videos, so I also found couple of courses (paid) on Udemy but those aren&#x27;t good and just wastage of money. I also found that Investopedia is an excellent resource. It contains a lot of good tutorials [0], guides [1] and videos [2].<p>You might have already learnt what I&#x27;m trying to. What&#x27;s your story? It would be really nice if you can also share the resources that proved really useful to you.<p>[0] http:&#x2F;&#x2F;www.investopedia.com&#x2F;university&#x2F;stocks&#x2F;
[1] http:&#x2F;&#x2F;www.investopedia.com&#x2F;university&#x2F;
[2] http:&#x2F;&#x2F;www.investopedia.com&#x2F;video&#x2F;
======
eorge_g
"A Random Walk Down Wall Street" is THE book I recommend for accessible
framework on the different strategies people approach the stock market and
investing.

[http://www.amazon.com/gp/product/0393352242](http://www.amazon.com/gp/product/0393352242)

Edit: WSJ Review: “Talk to 10 money experts and you’re likely to hear 10
recommendations for Burton Malkiel’s classic investing book.”

~~~
dforrestwilson
Khan Academy is a great resource for this. Salman worked in finance.

And it really does depend on how deep down the rabbit hole you want to go. I
do equity research now... feel free to contact me.

~~~
n13
There's no contact information on your profile!

~~~
csabapalfi
[https://twitter.com/dforrestwilson](https://twitter.com/dforrestwilson)
[https://www.linkedin.com/in/dforrestwilson](https://www.linkedin.com/in/dforrestwilson)

------
brianpgordon
You will never, ever beat the market by making smart trades.

Get real- you're a beginner reading investopedia. Active funds employ hundreds
or thousands of people who work more than full-time to support an operation of
systematically studying investment opportunities and exploiting inside
information to beat the market, and even _they_ don't beat the market.

Put your money in a diversified portfolio of index funds and leave it alone.
Making targeted trades costs money and will do no better than index funds
anyway.

~~~
dwc
Agreed, with one exception: when you as an individual have fairly deep
knowledge about something and spot a market opportunity based on that
knowledge, you _might_ be able to correctly judge whether you can take
advantage of it.

I've done this several times and made good money. Two times I approximately
doubled my money over the course of several months. Yeah, not day trading but
buying and waiting for the market to figure out what I already knew. The thing
about that is, it only happens when it happens. Most of the time my money is
sitting in index funds quietly getting solid but undramatic returns, and I
don't have to pay much attention at all.

~~~
brianpgordon
I admit that's a possibility, but be very careful and very limited in your
domain. Stupid shit is wildly successful all of the time, and brilliant
offerings fail all of the time.

The market still hasn't figured out that SharePoint sucks and enterprise lock-
in from vendors like Oracle is predatory and bad for business. Amazing
achievements like NeXT and the Amiga never made money. Gimmicks like the
Amazon Echo and the Apple Watch ship millions of units. It's really hard to
tell what the market will do.

~~~
dandelany
Or as Keynes put it, "The market can stay irrational longer than you can stay
solvent."

------
ChuckMcM
Depends on what you want to do, there is a difference between _investing_
which is supporting companies by buying equity (stocks) or debt (bonds) which
are growing, and _trading_ which is taking advantage of information or value
gaps in an imperfect market to extract value.

Back when I first started to ask questions about investing my 401k money and
diversifying the stock I was getting as an employee at Sun I took a Forbes
Stock Market study at home course, big 3 ring binder, a dozen cassette tapes.
It was all about reading balance sheets, understanding metrics like
price/earnings ratios versus price/income, margins vs profit vs growth. I've
spent a fair amount of time "fake" investing, basically doing the research,
pretending I had $5,000 to invest, and then investing it in the companies I
imagined would be good investments, and tracking that over the course of a
year to see how that $5,000 did relative to savings accounts or alternate
strategies.

Briefly I looked at trading when "everyone was doing it" back in the dot-com
days (that was quite a bull market). And I was struck by how much it felt
exactly like playing craps in a casino. For me, I found that for a lot more
work I wasn't getting any better returns than simply investing long on quality
stocks and spending the time doing other things.

I will tell you that like most complex systems, the more you learn the more
you realize what you don't know. And it doesn't help that things change,
sometimes in major ways, in response to various events. It isn't something you
can learn and then be done with sadly.

------
sharemywin
Keep putting your money(about 10% or more if you can swing it) in a good index
fund and ignore it for 40 years. There's a good chance you'll do about as good
as 50% of the stock market investors(or more counting fees lost) and you can
do something more productive with your time.

Stock market investing reminds me of that insurance commercial with the
fishing pole. "you gotta be quicker than that..."

If you want a better investment spend it on educating yourself... or something
where you can have inside advantage like your own company.

~~~
SteveNuts
Where's a good place to buy index funds, and how can I set it up on an
automatic deposit?

~~~
eorge_g
Vanguard is the gold standard [https://investor.vanguard.com/mutual-
funds/index-funds](https://investor.vanguard.com/mutual-funds/index-funds)

~~~
maaku
Cannot upvote this enough. This link should be the only answer to this entire
thread...

------
acconrad
Intelligent Investor and it's even denser cousin, Securities Analysis (both by
Graham) are often touted as must reads without the recommender actually
reading them.

I have read both and you can safely skip most chapters. I can summarize for
you, that based on your description in this post, you are what Ben Graham
calls a Defensive Investor, as you want to preserve capital without being able
to make significant time or resources towards exploring companies in-depth.

The modern way to be a Defensive Investor is to invest 50-50 in a stock and
bond ETF/index fund, such as VTI and BND. It provides broad, safe exposure
that mimics how you would have done it in Graham's day. If in the future you
find wanting to put the time into your investments, that is when I would
consider becoming an Enterprising Investor, at which point you should read
that chapter in II, and read Margin of Safety.

~~~
fiftyacorn
Ive read Intelligent Investor twice - and there is a chapter midway through
the annotated version which basically says that if you arent willing to put in
the time finding value shares then stick with passive investing in low cost
funds.

I also read Buffetts share letter and he frequently touts how well passive
investing would do, even with respect to Berkshire Hathaway

Im purely passive now based mostly on bogleheads

~~~
n13
Would you please mind giving some examples of low-cost ETFs?

~~~
fiftyacorn
I use the Vanguard Lifestrategy funds so i dont even have to rebalance at the
end of the year. These funds let you contribute - 80%share/20%bonds,
60%share/40%bonds, ... based on your age or risk profile. They also include a
global component to your portfolio

------
znebby
Since we're recommending books, Peter Lynch's "One Up On Wall Street" [1] was
a very informative and interesting book.

Peter Lynch ran Fidelity's Magellan fund from 1977 to 1990. He avergaed a
return of 29.2%, increasing the value of the fund from $18M in 1977 to $14B in
1990.

His philosophy is to invest in what you know, and that the market misses
things that everyday people can notice just from going about their life. I
think his advice worked a little better before the age of the internet, but
it's still a very solid and easy to read book.

[1] [http://www.amazon.com/One-Up-On-Wall-
Street/dp/0743200403](http://www.amazon.com/One-Up-On-Wall-
Street/dp/0743200403)

------
MicroBerto
Looking at the demographics and political climate of America, I am not at all
bullish on the idea of the continuation of long-term bull market.

Ignoring anything technical, there are two extremely strong things going
against the markets:

1\. The fact that the boomers will be drawing down on their investments as
they retire and begin to spend them.

2\. The sentiment that is growing against our corporatist structure that has
propped earnings up (ie the jobless recovery). Whether it's Bernie or Trump
you support, it doesn't matter -- well over half the country is voting against
policies that have made the stock market so successful at the expense of the
American middle class

My point being, market knowledge is always important to have, but I'd advise
against putting _all_ of your time into it. It's going to be stagnant for a
generation. IMHO you are better off building a real business with your time.
Get ahead of the game and see where the future is headed -- the trend is your
friend.

~~~
VLM
3\. Demographic shifts. For example the classic nobody is going to buy cars
because we'll all live in luxury city apartments and uber. As if the FIRE
sector will simply give up on car loan revenue, those dollars will have to
come from somewhere. Or if you laugh at the boosterism people for saying the
same things since 1970 and it all fails, then who eats the losses on those
luxury apartments and gig economy taxi startups? Either way its going to be
very exciting.

------
herman5
Mr Money Mustache [0]

[0][http://www.mrmoneymustache.com/2011/05/18/how-to-make-
money-...](http://www.mrmoneymustache.com/2011/05/18/how-to-make-money-in-the-
stock-market/)

------
astrodust
Don't forget the flip-side here, too. Some of the first books I read about the
stock market weren't about the stock market at all, but about confidence
scams, gambling and the inner workings of Wall Street.

Playing the stock market is, at its core, gambling, and any good gambling book
will devote a large portion of itself to explaining the basic principle of
money management: Of knowing when to cut your losses and how to prevent
yourself from going on a huge tilt.

If you learn more about how confidence scams work you can better avoid pump
and dump schemes, smooth talking investment "advice" people, and will be more
wise about opportunities too good to be true.

Most of all you need to know how these securities are packaged, what the
motivation of the players behind the scenes are, and how the market works
internally. Be aware of the sharks in the water and what sorts of investments
are being manipulated by things like high-frequency trading.

They say the final lesson is to be prepared to set fire to $10,000 in cash
because no matter how good you are as an investor there will come a day where
that much or more goes up in smoke based on market movements. If you can
handle that, psychologically, you'll be fine. If that thought really freaks
you out, better hold on to something more conservative.

------
Homunculiheaded
If you really want to dive into the technical details there's really no better
book than Hull's "Options, Futures, and Other Derivatives". It's extremely
well written and if you have a basic understanding of calculus and probability
the math isn't too difficult. The only catch is that it is a very expensive
book, but if you buy a used copy a few editions back it is more affordable.
Also don't worry about the "derivatives" subject matter, if you want to
understand derivatives you naturally have to understand the underlying
instrument. If you just read the first 100 or so pages (covering Futures
pricing) you'll have a pretty good sense of the basics of thinking about
financial markets.

I really recommend this book even if you're not interested in Finance as a
general guide for thinking about stochastic processes in a practical manner.
Nearly all "basic" business/web metrics can be understood best if you
understand how to correctly model financial instruments. Personally, I think
the basics of quantitative finance are just as relevant to Data Science as
machine learning is.

~~~
lloyd-christmas
+1. I worked as an equities trader and this still sat on my desk in place of
any equities books.

> Personally, I think the basics of quantitative finance are just as relevant
> to Data Science as machine learning is.

100% agree. As a hobbyist on the data science side, I still refer back to the
book whenever I get a "this looks familiar" thought.

~~~
huac
do you have any particular points of crossover OTOH? interested in what some
similarities between data science ~ quant finance are.

~~~
lloyd-christmas
I guess "data science" is a pretty big term, so it depends what corner of the
bubble you're in. My interest leans toward computer vision. The first thing
that popped into my head is Kalman filters being useful in time series
analysis, whether it be equities or object tracking.

------
greenwalls
The Bogleheads website is a great community in my opinion. Their Wiki is here
[https://www.bogleheads.org/wiki/Main_Page](https://www.bogleheads.org/wiki/Main_Page).

~~~
fiftyacorn
I can never recommend this book enough

------
mikraig
A lot of great suggestions already (especially regarding index funds), but I'd
add that one of the best things I've done is get a Wall Street Journal
subscription. Reading the business and markets section daily really helps. I
know it doesn't sound as rigorous as reading a textbook on trading or
investing, but after you read the news daily for a while, you start to make
connections. You know all the current deals, you know how a lot of businesses
are doing. And most importantly you start to build an internal model of how a
stock will do based on certain stories that get published.

------
imgabe
When I first started I read The Wall Street Journal Guide to Understanding
Money and Investing [0]. It's probably a bit dated now, but if you're just
starting it gives a pretty good overview of the basic terms like what is a
stock, a bond, options, futures, put, call, stop, limit, short, etc.

Another similar book is How To Read the Financial Pages[1]. Again, probably a
little dated, but I don't think much of the terminology has changed.

I would still recommend index funds for the best returns, but if you want to
follow the financial news it helps to understand the lingo.

[0][http://www.amazon.com/Street-Journal-Guide-Understanding-
Inv...](http://www.amazon.com/Street-Journal-Guide-Understanding-
Investing/dp/0684869020/)

[1] [http://www.amazon.com/Read-Financial-Pages-Peter-
Passell/dp/...](http://www.amazon.com/Read-Financial-Pages-Peter-
Passell/dp/0446606707/)

------
pstrazzulla
I started when I was a kid with my brother as we wanted to make money for some
reason and learnt very slowly over years.

Don't read The Intelligent Investor, it will just put you to sleep.
Realistically, you shouldn't be picking stocks on your own. You should just be
putting money into ETFs that track the market and can help you diversify your
holdings cheaply.

Look up a few of the key terms in investopedia like stock, bond, etf, etc.
Then, either create your own ETF portfolio via an online brokerage account, or
go with a robo advisor like Betterment.

Good luck!

------
philjr
I've spent long enough investigating this heavily that I feel like I should
dole out advice. And I say "investigating" as something light and fluffy when
in reality I normally take a unnaturally healthy obsession over researching
and learning about new areas.

To me I think about "investing" as trying to guarantee a return over the long
haul. All the smart evidence points to taking a strategy that links you to
index funds. This is what I ended up doing in terms of carving up my
investments [https://www.bogleheads.org/wiki/Three-
fund_portfolio](https://www.bogleheads.org/wiki/Three-fund_portfolio)

When I started this though what I actually, of course, wanted to know more
about was the sexier, potentially much higher return end of "picking stocks".
This is still sexy to me, and I still get inclinations to pick stocks every
now and again, particularly in the tech sector where I feel like I have an
edge. But as I've done dummy investments in the past, the market has bitten me
in lots of unexpected ways. General market downturns, edgy sentiment around
quarterly earnings, bad product releases etc. etc. So now I call this what it
is: high stakes gambling. I do play, but with money I'm ok losing. The kids
college fund goes uses the three fund strategy described above making heavy
use of index linked funds.

------
Muted
I saw my dad looking at charts one day and asked him what he was doing. He
explained some stuff and the idea of owning part of a business really appealed
to me. I could sit behind a pc, own part of a business, and make money doing
it, what wasn't to like?

Since my dad wasn't the richest investor in the world, he wasn't the best so I
started googling and quickly came across Warren Buffett. Not only is he the
best (personal opinion), he also had a strategy that resonated with me. I had
read basic books on technical traders, position traders, day traders and none
of that made sense to me since they often neglects the underlying business. (I
also didn't find traders close to the top of forbes' list.)

Once I found something that made sense, I pretty much watched every video
online or tried to read every book he recommended. Luckily Warren Buffett
loves teaching so there is plenty online you can find. The intelligent
investor is definitely a must read. So is "security analysis", "common stocks
uncommon profits" and a bunch of others. Here [1] you can find a list of
"Buffett approved" books in case you run out.

[1] [http://www.bookwormomaha.com/store/c-2-berkshire-
hathaway-20...](http://www.bookwormomaha.com/store/c-2-berkshire-
hathaway-2009-meeting-selections.aspx)

------
kdamken
I'd recommend [http://www.amazon.com/Bogleheads-Guide-Investing-Taylor-
Lari...](http://www.amazon.com/Bogleheads-Guide-Investing-Taylor-
Larimore/dp/1118921283)

I've recently been trying to learn more about investing and this book has been
right on the money.

Basically, the advice is don't buy individual stocks, you can't pick them and
outperform the market consistently. Instead, get an index fund or ETF that
tracks the whole market, like
[https://personal.vanguard.com/us/funds/snapshot?FundId=0085&...](https://personal.vanguard.com/us/funds/snapshot?FundId=0085&FundIntExt=INT).
Vanguard is the best for index funds as they have the cheapest expense ratios.

If you want to learn more about the basics of economics, which are important
as well, I've enjoyed this lighthearted youtube series -
[https://www.youtube.com/playlist?list=PL8dPuuaLjXtPNZwz5_o_5...](https://www.youtube.com/playlist?list=PL8dPuuaLjXtPNZwz5_o_5uirJ8gQXnhEO)

------
VLM
We're coming off a multigenerational bull market. So writings are a tad
unrealistically optimistic. For a slight counterexample, or a dose of reality:

Reminiscences of a Stock Operator by Edwin Lefèvre

Where are the Customers Yachts by Fred Schwed

Nothing has really changed psychologically since those books. The same people
are doing the same things for the same reasons, just with different numbers
and tools. This will provide some background in those areas. Very much like
music or sex (edited to add, or programming), young people like to think their
generation invented the topic, but not as much has changed as you'd think.

Note that just because its hilarious reading what Livermore did a long time
ago, doesn't mean you won't get thrown in jail if you tried it today. So these
are like anthropological case studies, not preachy instruction manuals. Make
sure you get that.

Aside from that I'd propose the usual critical thinking skills. Whenever you
hear or read something: Follow the money. From his perspective, why is he
telling me this? Where is this on the lifecycle of ideas from new (perhaps
only to you) to conventional wisdom (may already be obsolete) to obsolete, and
is this a linear time or circular time situation?

Finally bad people or bad motivations don't necessarily torpedo an idea. Take
for example haircuts. Ask your barber how often you should get a haircut, that
will be every paycheck please, because he's paid transactionally. Likewise,
you ask your financial advisor or broker how often you should dollar cost
average, because he's paid transactionally guess what his advice will be.
However, corrupt as that may appear on the surface, it might none the less be
correct advice, for reasons having nothing to do with your broker's revenue
stream!

------
moshiasri
Well the real question here should be how much pain can you bear to learn the
process. Because the term stocks and market covers a big area, you have to
select a more specific domain, like bonds,derivatives, stocks, commodities or
forex and the learning curve is steeper than the traditional processes like
coding or design, plus there is capital involved, if you are a newbie i would
advice you to start with "Paper Trading" and read a lot of books.

Do not enter the market, right after you finish a few courses, you will just
be chewed up and spit out, and find a book called "A Complete guide to Day
Trading" by "Markus Heitkoetter" it is plain and simple with lots of examples,
and put "the Intelligent Investor" away for six months at least, that is a
good book but is not for now.

I Started three years back when i was in engineering final year, and went on
to get the certification as a derivatives and equity trader from the
regulatory body.

Good Luck

~~~
n13
Thank you so much! I'll look into that too.

~~~
moshiasri
Your Welcome my friend, if you need any further info regarding the stock
market, fell free to ask, i will be glad to answer. :)

~~~
n13
Thank you! HN doesn't have any option to follow but that's ok. I do have a
question for you - Does newsletters/pro accounts (costs around $199/yr) like
Motley Fool, Morning star of any help, or those are just sham?

~~~
moshiasri
Well they are not a sham, but they are not very help full either.

look in stock market information is an asset,but if the news is out on any
news service, it has already been used and all you are getting are the left
overs.

Instead of getting glued to the newsletters or pro accounts or even a business
news channel, i would advise you to improve your technical analysis skill,
because that way you can understand the market movement in real time, and you
do not have to worry about being feed some misguided or hoarding news, and you
can see the trader sentiment to understand the mood, and movement of the
market. and use the news service as an extra source in decision making, plus
you need to learn how to read between the lines or in this case listen to what
is actually being said. most of the time you will be amazed by the difference
between what has been said and what was the actual case.

And then there will be days when you would just have to sit back and not
buy/sell even a single contract at all, and days when you will go bananas by
the sheer volume to transaction or market volume.

make your own trading rules, and strategies and then stick to them. dont just
give up at the first instance.

------
Another223
Random Walk and Intelligent Investor as already mentioned are great books. I'd
put Common Stocks and Uncommon Profits (Philip Fisher) near the top of my list
and I enjoy the Value Investor podcast (John Mihaljevic).

If your interest is more the short-term movements, and less investing based on
price and intrinsic value, then I'd suggest branching into economics and
psychology. The Little Book of Behavioral Investing (James Montier) is
excellent.

I think the best way to translate what you're reading to a practical
application is a paper portfolio. I wouldn't recommend single-stock selection
for your $ portfolio, but researching and following stocks that you pick will
make you more aware of the market. As with learning anything, document your
decisions (what, when, why) and use that as a feedback loop to improve.

------
eldavido
The stock market exists at the intersection of a few academic subjects.

One is economics. This is a social science, like psychology, and deals with
human beings, and why they act the way they do: why prices go up and down, the
effect of regulation and policy, supply and demand, etc. Economics is the
bedrock underlying any market because ultimately, markets are made up of
people. It's sort of like how math underlies all of programming -- you don't
often use it directly, but it's the intellectual foundation of all market
behavior.

To learn economics, get a basic micro textbook or listen to Russ Roberts'
EconTalk. It's an outstanding scholarly podcast once/week with a huge range of
topics including environmental regulation, financial market behavior, food and
cuisine, and the effect of law on public welfare.

The second major discipline is finance. In a nutshell, finance is all about
trading flows of money, and how that's priced: if you promise to pay me
tomorrow, how much should I pay you today? What is a 10% interest in a company
worth? Part of finance is "corporate finance", which is "I have a company, how
should I fund it" and the other part is "financial economics", which deals
with markets for stocks/derivatives/options etc. and how they're priced and
traded. Finance is built on economics, because the whole reason financial
markets exist is to facilitate the reorganization of money/capital to better
align with peoples' preferences: saving vs. spending, borrowing vs. investing,
etc.

The third major discipline is business management/analysis. You'll learn this
if you work anywhere for a while: how companies operate, why people are
hired/fired, etc.

Mostly, just take it in a little at a time, be curious, and pay attention to
the markets. Read the news. For instance, there's a lot of discussion about
what the Fed will do, raise vs. lower rates. Why does this matter? How will it
affect output (how much is produced), securities prices, and firms decision to
invest (build stuff) vs hold cash? What will the effect on the housing market
be? Will mortgage rates go up or down? Try to fit this into a conceptual model
of how the world works, and refine it over time.

EDIT: Accounting, especially tax, is also important. Accounting is the basic
language of business. If you want to understand the words people on TV/news
are using, like "non-GAAP" or "gross margin" or "restatement", learn a bit of
accounting.

~~~
Nano2rad
This is the best answer. You have to know the factors influencing the market.
If you are strong in at least some subjets you can spot the opportunities. If
you know about economy, you could benefit when the economy is growing and it
could benefit almost all companies. If you know economy is weak, you can
short, just as an example. Other factors like market, management, managers,
consumer behavior, govt policies, foreiegn policy, technology, raw material,
rent, trading laws, stock exchanges, accounting etc. will help. Read business
magazines and dailies but dont believe everything. But whatever you do, there
is chance of failure. So if you are in market read Fooled by randomness and
Black Swan. Investing rules from the masters say there is really no rules. You
can be daytrader, long-term investor, options and futures, stock picker, index
trader, etc. Actually, each style suits personality.

------
fny
I highly recommend William O'Neil's "How to Make Money in Stocks" [0]. There's
a lot of chart study involved and high-level advice that's necessary for
gaining a higher understanding of what drives the market.

While I agree that you won't ever beat the market by making smart trades, this
book will teach you the discipline needed to keep from losing money or being
lured into stocks and index funds by Wall Street bullshit.

[0]: [http://www.amazon.com/How-Make-Money-Stocks-Winning-
ebook/dp...](http://www.amazon.com/How-Make-Money-Stocks-Winning-
ebook/dp/B00916ARYS)

------
fauigerzigerk
I knew a bit about accounting when I started investing and didn't even realize
how much it helped me until I heard other investors talk about companies in
ways I knew were based on completely flawed assumptions.

I don't think accounting basics will help you much in terms of beating the
markt. But they may help you not to be the one who funds other people's
outperformance by making stupid mistakes.

Learn to read a balance sheet, an income statement and a cash flow statement.
You'll easily find good enough sources for that by googling these terms.

------
blabla_blublu
Used to watch my dad come back from work and stay glued to the television
tracking the tickers. I used to help him keep track of a few stocks as well.
Slowly got interested and picked up some random book that explains the stock
market terminologies.

The #1 takeaway from the book is "Before you buy the stock, give an elevator
speech with facts(data-driven) and reasons as to why this stock is going to be
a good buy."

Turns out a lot of my investments don't stand this test!

~~~
fauigerzigerk
The problem is that there are pros and cons to every stock. Weighing them and
getting the timing right is incredibly difficult though.

So if someone makes an elevator pitch for some stock, what I would be asking
is why these pros are going to outweigh these cons.

And that's where we're back to square one where everything is just opinion and
ituition, albeit better informed, which has to count for something.

I'd like to add some sort of quantitative discipline into the mix. And I mean
something that has some statistical credibility.

------
dmourati
I had a class in high school freshman year where we would get a $10,000 fund
to paper trade with. We'd make our selections and record them in a journal.
Each day, we'd review the WSJ and track prices on our picks.

I went to watch stock ticker channels on PBS at homes and subscribe to
Investor's Business Daily.

From there, I spoke with my parent's financial advisor and was able to make
some small purchases to invest some of my family's real money.

------
mohawk
Short advice: get a low-cost physically-replicating ETF covering a large part
of the market (e.g. Vanguard) and dollar-cost average. This is the ultra-low-
effort average returns approach.

Stock picking advice and understanding the economy:

I really recommend reading all of Warren Buffett's letters to shareholders
which can be found on the Berkshire Hathaway website. They are written in a
down-to-earth style and offer a panoramic view of investing, from accounting
issues to competitive advantages to macroeconomics. You can also see Warren's
investing style evolve and him deal with various issues throughout history,
from high inflation to the dot-com boom. Warren boils down many issues into
easily remembered sayings ("Be greedy when others are fearful and fearful when
others are greedy", though the sayings themselves are probably as old as the
stock market itself).

Find investments that have moats is one of Warren's guiding rules, i.e.
business advantages that are hard to replicate.

Learn about accounting. You don't have to learn everything, but you should
know about the things that will affect your valuation of an investment.
Pension contributions, stock-option accounting, etc. Come up with your own
metrics to compare companies in a sector to find out who is the most efficient
etc.

You will have to find an edge, something that most other people don't know,
otherwise you'll just follow the crowd. Things that aren't in fashion are
great places to find bargains.

Understand how a discounted cash flow (DCF) calculation works. The important
part in a DCF from the point of an investor is to look at how sensitive the
results are with regard to changes in the input variables (because the risk-
free interest rate and size/timing of future cash flows isn't known in
advance).

Understand the effect of interest rates on asset prices (see DCF calculation).

Understand the debt cycle. We are at an interesting point in time, coming ever
closer to our debt-carrying capacity.

Here is a nice video by Ray Dalio on this topic:

[https://www.youtube.com/watch?v=PHe0bXAIuk0](https://www.youtube.com/watch?v=PHe0bXAIuk0)

Some economists probably disagree with some things said there, but i think the
gist of it is spot on.

------
jacko0
I was a total novice, I got a copy of The Naked Trader, read it on the bus and
now have made quite a lot of profit using the easy to understand tips.

[https://www.amazon.co.uk/The-Naked-Trader-Anyone-
Trading/dp/...](https://www.amazon.co.uk/The-Naked-Trader-Anyone-
Trading/dp/0857194135/ref=dp_ob_title_bk)

~~~
Jaruzel
Aha, glad I scrolled down, I was about to suggest this book also. It's the
only one I've read where I actually remembered the trading tips the next day.
It's got a very easy style, and good for the total novice.

I never got as far as actually playing the market though...

------
mdorazio
Probably not helpful to you, but I originally learned from my grandpa when I
was in middle school. He was quite the stock market investor and broke down
for me the way the market worked at a basic level so that I could understand.
However, I didn't really learn about the fundamentals of the market and the
basis of all the derivatives/options/leveraged investments, etc. until I took
an Investments class in college.

What's your end goal here? Do you just want to be able to make some good
personal investment choices, or are you trying to be a day trader or
algorithmic investor? The materials will be different depending on your
intended path.

In any case, I definitely wouldn't pay for a class. There are more than enough
free materials out there like this MOOC from Stanford GSB:
[http://online.stanford.edu/Stocks_and_Bonds_Fall_2014](http://online.stanford.edu/Stocks_and_Bonds_Fall_2014)

------
banku_brougham
I didn't know what stocks were until my first job out of college as a junior
civil engineer. It was 1999, everyone in the office was talking about stocks,
all the time. There were magazines laying around like "Money", one I remember
had a photo on the cover of a guy and the jet skis he bought with his smart
stock investments. Lucky for me I didn't have any savings to 'invest', because
it turned out all the stocks people talked about (Juniper Networks? comes to
mind) weren't really worth anything, and led to permanent losses on a
significant fraction of my colleagues savings.

So...I think it's important to consider fundamental value. A diversified low
cost US fund makes sense. I've also learned about bonds, I think medium grade
US corporate is a good trade off, when it comes to bond funds you want fixed
maturity date 'bullets'. Municipal bonds are good as well. Yada yada, AAPL.

------
peller
I want to ask, what is it that you consider the "investing perspective?"
Unless you _never_ plan on closing out your position, then at _some_ point,
you will have to sell (or cover, as the case may be). My point is, even if
buy-and-hold investing suits your personality more than any other style,
technically, you are still a trader. Or more specifically, if you want to
learn to reliably make money more often than not, you are going to need to
learn to think like a trader, even if you prefer to fancy yourself an
investor.

Things to note: This is going to be hard work. It will take time (years for
most). Take notes on everything you think and do (keep a trading journal).

You will loose money at first (consider it your "tuition").

Don't put too much weight on the publication date of a resource. Certainly,
some specifics of market implementation have changed over the years, but as a
whole, human nature (fear and greed) is the same now as it was when the first
humans decided to build financial markets.

I know you didn't mention books as a preferred learning source, but, IMO they
contain the most condensed stores of knowledge by the most reputable people
(read: retired and/or independent) on this subject. Here's my list of
recommendations:

High Probability Trading by Marcel Link

How Technical Analysis Works by Bruce Kamich

How to Buy by Justin and Robert Mamis (out of print; worth every penny)

When to Sell by Justin and Robert Mamis

Trading in the Zone by Mark Douglas (don't underestimate the importance of
getting your psyche under control!)

Japanese Candlestick Charting Techniques by Steve Nison Market Wizards by Jack
Schwager (these are well worth reading)

And of course, the timeless classic, Reminiscences of a Stock Operator by
Edwin Lefevre

Good luck!

------
anonu
The way I think about the markets - and a way that may help guide you in your
quest to focus on this vast concept called the market - is to figure out what
investment time horizon suits you best. On the short end of the scale you have
your high-frequency players that care more about market-making and market-
structure. On the other end of the scale you have the buy-and-hold investor.
They look at the fundamentals of the company and try to invest for the long
term. And then there is everyone in between. Your trading style and investment
thesis usually lines up with the product you care to trade. For example,
people looking for a short-term leveraged play on gold commodity might find
that going long gold miners gives them that exposure...

------
akg_67
> I did a search and found out that everybody is recommending "The Intelligent
> Investor" by Benjamin Graham.

This book is too advanced for beginner level. As a beginner, you most probably
will not like this book and reading it might turn you off investing and stock
market (too complex).

The type of books you want are the ones that cover basics and are easy to
read. Instead of considering books recommended by others, I will suggest going
to a physical book store (library is another option), pick up any investing
book on the shelf, read for 15-20 minutes. If you like what you are reading or
book fascinates you and you want to continue reading the book, buy (check out)
the book and take it home.

If you are a visual learner, I heard Khan Academy videos are good. Also,
consider reading biographies of famous investors and financiers and other
story-telling type of investing related books. As I am not visual learner, I
can't make any specific recommendations.

If you prefer numbers, I will suggest reading "Millionaire Next Door", "A
Random Walk Down Wall Street", and "What Works on Wall Street". The first one
is not per se investing book but more of an "encouragement" book that will
help you continue learning about saving and investing.

> What's your story?

I learnt stock market as "substitute" for gambling. When I first started out
working professionally, some newbies (like me) at work will go out to casinos
or have booze and gambling Thursday nights (alternate Friday off from work). A
few of these people were hardcore gamblers: studying and learning tips and
tricks of blackjack, poker etc. Monday lunch at work cafeteria used to be
"whining" session, how we lost so much money and odds are against us, etc.

During one such whining session, an older member at work mentioned that on his
Friday off, he goes to library to read Wall Street Journal, Value Line to
research stocks and check value of his stocks like checking lottery numbers in
newspaper (pre-Internet days). He got his "gambling" adrenaline through stock
market and how odds of winning are much better than going to casino. This was
the start of my interest in stock market and learning more about trading and
investing and saving. I went to library on my Friday off to read and check out
any investing and trading book on the shelf. I most probably read 30+
different books in a few months period at the start. Investing and trading is
the only hobby that has kept me interested over the years.

------
hluska
You've received some excellent answers here. I won't reinvent the wheel, but I
will add one small detail.

If you're interested in learning about the stock market, it's also helpful to
get a good primer on financial accounting. You don't have to be good enough to
actually do a public company's financial statements, but it's helpful to have
enough of an understanding that you can look at a company's quarterly report,
compare it to past periods and get a good sense of how things are going.

I can't think of an accounting primer that is good for this, but I studied
accounting in University so I may be biased. So, if I were you, I'd:

\- pick five or six public companies you are interested in.

\- read their annual reports.

\- Google terms you don't understand.

~~~
vibrio
i came here to say this. i'd recommend getting a used accounting book and/or
Schaum's guide to have on a shelf as one reviews financials. Also, when i
narrow the field down to a small group of companies to evaluate and pick from,
I often buy a few (sometimes very few, 5-10) shares. The habit originates from
the old days when the positions would get the hard copies of the Filings (k's
and q's) sent to me-- but that was the 1990's. Now I find that it keeps me
committed and focused into looking at the companies so i can either dump the
shares or expand the position.

------
umbs
Your question is a bit open ended. You want to learn about "stocks" and
"market". The second one is a blanket term, but I'll share what I have been
doing as, like you, I too prefer videos/audios over reading books.

For past one year, I have been very actively listening to financial podcasts,
reading investopedia, taking classes on Coursera (I avoided Udemy so as not to
pay for courses). After gleaning through various resources, I settled on the
following:

Podcasts: [1] Money Tree Investing:
[http://moneytreepodcast.com/](http://moneytreepodcast.com/) [2] We Study
Billionaires - The Investors Podcast:
[https://www.theinvestorspodcast.com/](https://www.theinvestorspodcast.com/)

I listened to other podcasts and finally settled on these two. I particularly
like [2] for the in depth analysis on markets from each guests
perspective/expertise.

Classes: [1] Understanding Financial Markets:
[https://www.coursera.org/learn/understanding-financial-
marke...](https://www.coursera.org/learn/understanding-financial-
markets/home/info) [2] Introduction to Finance:
[https://www.coursera.org/specializations/valuation-
investmen...](https://www.coursera.org/specializations/valuation-investment)

I took only one course in [2], couple of years back and it was very helpful.

Sites: [1] Investopedia.

Keeping in mind that you are a beginner.

I do not invest money in stocks. As @brianpgordon mentioned below, it is very
hard to beat the market, especially for a beginner. I only put money in ETF's
and low cost index funds. But listening and or reading above resources keeps
me educated about this field.

Personal Opinion: "The Intelligent Investor" is very dense and is not for
casual investor. Read it only if you are serious about this subject.

EDIT: Edited too many general statements.

------
memossy
I became a global multi-strategy hedge fund manager at 23 ($1bn fund) via a
series of odd events so didn't have time to go through the classic CFA analyst
=> fund manager process.

I get asked this question a lot and usually recommend
[http://www.realvisiontv.com](http://www.realvisiontv.com) these days,
particularly if you like videos.

Some variable quality, but some really excellent, unique viewpoints from value
investors and macro managers there.

I would also recommend the Market Wizards series by Schwager and Inside the
House of Money/the Invisible Hands by the Drobnys.

------
goo
In the course of investing and reading about investing sometimes I stumble
upon what I think of as particular well distilled pieces of insight. I keep a
file of these in my notes. Here are a few of my favorite concepts, quoted from
others:

“It all comes down to who is going to buy and who is going to sell and for
what reasons,” -- Ray Dalio

Determine whether an investment opportunity is a Yes, No, or Too Hard: If you
do not understand it after brief study…it’s Too Hard. If you do not love it
shortly after that, it is a No. -- Warren Buffet, paraphrased

"The market is like a large movie theatre with a small door” - N. N. Taleb

------
1123581321
Not a joke: I communicated 60 minutes each way for a year and thought about
all the ways you could know which lane would travel faster than the other, and
when.

For information to input into that way of thinking, I got in the habit of
reading primary sources (Fed PDFs, company announcements, etc.) as much as
possible. At the time I had a subscription to a service that aggregated
primary sources in the sectors that interested you. That service has pivoted a
few times since then and is now useless for gaining a real information
advantage.

Edit: yes, commuted is what I meant. :) Leaving for posterity.

~~~
aerovistae
(I think he meant "commuted" 60 minutes each way??)

~~~
flying_kangaroo
tbh I read it as "commuted" anyways. The human brain is quite the work of art.

~~~
1123581321
Haha! Yes, it's funny how a longer, incorrect word goes unnoticed. Thanks for
catching it.

------
bmay
[https://www.bogleheads.org/wiki/Video:Bogleheads%C2%AE_inves...](https://www.bogleheads.org/wiki/Video:Bogleheads%C2%AE_investment_philosophy)

------
jefe_
The Market Wizards books are a bit dated, but still do a good job of profiling
various trader mindsets across a number of markets.

[http://www.amazon.com/The-New-Market-Wizards-
Conversations/d...](http://www.amazon.com/The-New-Market-Wizards-
Conversations/dp/0887306675) [http://www.amazon.com/Market-Wizards-Interviews-
Weinstein-Hi...](http://www.amazon.com/Market-Wizards-Interviews-Weinstein-
High-Percentage/dp/1592802761)

------
tcoppi
Read "Trading and Exchanges: Market Microstructure for Practitioners
([http://www.amazon.com/Trading-Exchanges-Market-
Microstructur...](http://www.amazon.com/Trading-Exchanges-Market-
Microstructure-Practitioners/dp/0195144708))

This will give you an idea and maybe whet your appetite about how markets and
trading actually work, and all the reasons people use markets. From there you
can work towards learning more about actually developing trading strategies
more complex than buy and hold.

~~~
osullivj
Seconded: Harris Trading and Exchanges is an excellent book. I read it in 2006
when I was working for a rates trading desk, and wrote a series of blogs posts
on it: [https://etrading.wordpress.com/category/reading-
harris/](https://etrading.wordpress.com/category/reading-harris/)

------
galfarragem
IMHO investing is more an art than a science. It's a chaotic game that can be
played with several focuses and sets of rules but always with the same goal:
make money by predicting his evolution. Which focus is better? I don't think
there is one, at most, it depends on your personality, investing time frame,
amount of money to invest and how much time do you want to spend.

The best actionable advice I heard from somebody making a living from it,
paraphrasing:

"Imagine you are a mouse. Investing is to learn how to steal the cheese
without being caught."

------
zhte415
You may want to look beyond stocks, because stocks are a small part of
financial markets.

I've mainly done asset allocation. That means, looking between markets and
moving assets accordingly. More an interest in themes than individual
companies (though themes between companies often appear).

An excellent blog for this style, generally called 'macro', is [http://macro-
man.blogspot.com](http://macro-man.blogspot.com) though the financial market
slang can be a bit much at first. It is funny and fresh.

------
kspaans
Millionaire Teacher[0] is what I read for a layman's approach to index
investing. It approaches it mostly from an expat's perspective, but the core
approach is the same regardless of where you are or plan to retire. And for
Canadian-tilted advice I read the Canadian Couch Potato blog[1].

0 - [https://andrewhallam.com/](https://andrewhallam.com/)

1 - [http://canadiancouchpotato.com/](http://canadiancouchpotato.com/)

------
kirpekar
Easy:

The Bogleheads' Guide to Investing

A Random Walk Down Wall Street

You will know 99.9% of what you need to know.

------
DonzoS
Read the Little Book of Common Sense Investing by Bogle, and have stayed the
course every since. The more and more I learned about trading, market
analysis, arbitration (trying to take advantage of an information market
mismatch), I realized my time would be better spent doing something I enjoy
and Investing (with a capital I) the Bogle way. In short, buy into passively
managed index funds (Vanguard funds, etc) with low cost ratios over time, and
dont touch until you must...

------
writtles
Too many naysayers in this thread (get burned before guys?).

Motley Fool Investment Guide is where I started. I've subscribe to their Stock
Advisor newsletter for nearly a decade and have picked from their
recommendations in that newsletter. Basically i've invested money in one of
their picks once per month with the expectation to hold that investment for
10+ years. That portfolio has gained an average of 25% PER year and I've never
researched a stock.

~~~
acconrad
When did you start investing? Because by saying "never researched a stock"
sounds like you have been lucky in a bull market rather than investing for
decades across multiple bull/bear cycles.

------
rbcgerard
Read Warren Buffets shareholder letters

Howard Marks letters at Oaktree

Jeremy Granthams Letters at GMO

Seth Klarman's Margin of Safety

Investor letters of good hedge fund managers (einhorn, dalio, singer, etc)

------
osullivj
Two of my faves, Random Walk & Trading & Exchanges, have been mentioned by
several others, so I won't comment further. Some other books I've enjoyed have
been Lewis: Liar's Poker, Das: Traders, Guns & Money, Niederhoffer: Education
of a Speculator, Partnoy: FIASCO and Kinderhoffer: Manias, Panics & Crashes.
And Taleb: Fooled by Randomness.

------
pessimizer
I learned about them in a bizarre, backwards way; starting with commodities
trading (which is more comprehensible because it is zero-sum and its purpose
and flows of cash are comprehensible.) Then I moved to bonds, through munis;
then insurance, then finally stocks and other derivatives. It's probably a
more historically ordered way of learning than is normal.

------
Tyr42
Khan Academy actually has pretty good videos on all this, which isn't that
surprising giving Khan's background before he started Khan Academy.

[https://www.khanacademy.org/economics-finance-domain/core-
fi...](https://www.khanacademy.org/economics-finance-domain/core-finance)

------
tmaly
I read a ton of books. I happened to do an internship at Intel back in 1999,
and there was a senior engineer in the group that published his own book on
the subject of stock trading. It was quite an ingenious method he used.

I have read many books since then, but none have had the uniqueness or
simplicity as his method has.

~~~
sphix0r
Interesting. Do you have a link to his book / paper back then?

~~~
tmaly
He only sold it privately in batches through newspaper classifieds. I remember
the method and I can provide a summary of how it works.

I did purchase his book, and I ended up lending it out to a family member who
lost it :(

------
DeanWormer
Since you said you like videos, Khan Academy has a section on stocks:
[https://www.khanacademy.org/economics-finance-domain/core-
fi...](https://www.khanacademy.org/economics-finance-domain/core-
finance/stock-and-bonds)

------
estefan
This is a good book (albeit UK focussed): [https://www.amazon.co.uk/Financial-
Times-Guide-Investing/dp/...](https://www.amazon.co.uk/Financial-Times-Guide-
Investing/dp/1292005076/)

------
contingencies
As my third job, when I was perhaps around 17-18, I worked in a small publicly
listed company. What I saw there in terms of inefficiency, PR, gaming the
system and outright corruption turned me off stocks and the market entirely.

------
maxschumacher91
Over the last couple of years, I have spend a lot of time on investing (e.g.
learning about it and actually making picks) and I did not outperform the
market (aka "generate alpha"): Seeing how strongly the major indices
developed, it would have been better to buy an ETF (a passive investment
instrument that replicates the movement of an underlying such as the S&P500
index) and do literally nothing else.

Generating alpha is very, very hard; If you want to maximize your financial
wealth it might be better to focus on earning more money (for example by
acquiring in-demand skills), living frugally and be content with market-
returns (which have been fantastic over the last 200 years).

What is true for most skills is true for investing: instead of reading about
it, start doing it right from the start: Pick a company (maybe smallish <$250m
market capitalization, so the complexity is less overwhelming) and learn as
much about that firm, its competitors and the market it operates in as you
possibly can. This process can take weeks of full-time work for a single firm.

At the end of the investment process you have one task and one task only: have
an opinion on whether the company is selling for less than it is worth.

You don't actually have to commit capital, just start a watchlist (a couple of
dry-runs will be a good learning experience!)

Be aware of the fact that investing requires a lot of discipline: thorough
analysis is tough and time-consuming. Also, investing is contrarian by
default: you don't outperform the market by doing what the market does
(D'oh!), you have to think and act independently.

Investing can be an emotional roller-coaster (e.g. it is tough to admit that
your judgement was wrong and cut your losses).

Investing is more art than science, uncertainty about the future and facts you
cannot know are lurking everywhere, you'll have to develop your own principles
(and refine them over the years) to become successful. I recommend creating a
checklist that reflect your principles and sticking to that list religiously.

Fundamental analysis crucially relies on understanding the three parts of
financial reporting: the profit & loss-statement, the cash-flow statement and
the balance sheet. Studying those from one of the numerous free online
resources should serve you well.

In conclusion: investing is a intellectually rewarding endeavor (and I
wouldn't want to miss it) but, and that is true by definition, almost no one
can reliably generate alpha. So spend your time, effort and (!) money wisely.

------
snikeris
I'm a big fan of Harry Browne's thoughts on the subject:

[https://en.wikipedia.org/wiki/Fail-
Safe_Investing](https://en.wikipedia.org/wiki/Fail-Safe_Investing)

------
ashishb
(Shameless self-promotion) My notes -
[http://ashishb.net/category/finance/](http://ashishb.net/category/finance/)

------
aczerepinski
Keep in mind that in order to beat a passive index like the Vanguard 500, you
will need to be better than the _vast_ majority of professional hedge fund and
mutual fund managers.

~~~
BEEdwards
Or you know a monkey picking randomly.

[http://www.marketwatch.com/story/how-hedge-fund-geniuses-
got...](http://www.marketwatch.com/story/how-hedge-fund-geniuses-got-beaten-
by-monkeys-again-2015-06-25)

------
chad_strategic
I read the intelligent investor and then went an got an MBA.

I would recommend building a business / start up or teaching yourself
programming. Over the long term you will make more money.

------
ascendantlogic
Growing up my father had a subscription to BusinessWeek, which for some reason
I took a healthy interest in reading back in the 80's.

------
mathgenius
Ask yourself this question: "What do you know that no-one else does?" Then
find a way to trade based on this information.

------
tomc1985
Self-taught. Still learning. I'm avoiding books and trying to draw my own
conclusions by watching the market.

One thing I have learned is that most of the other people talking about the
market are full of shit. There is so much misinformation and red herrings that
it feels like seasoned investors WANT newbs getting lost in the spiderwebs.

------
nodesocket
People recommending VOO as a nice ETF, what about QQQ (mirrors Nasdaq).

------
burp3141
Hi n13,

>What's my story.

My father was a chemical engineer. He got an MBA and switched to investment
banking and then to financial stock analysis. Back in the 80s, he had
something similar to ValueLine and would go through them looking for P/E and
EPS filters. We had racks of these financial metric newsletters and a couple
of interns running this from home. Occasionally I would help out. This was my
first introduction to stocks.

My dad then switched to private investment banking. He would come home and
tell us stories about startups, how he invested and so on. Then he started
writing financial articles for newspapers. Mainly on Technical analysis. Some
days, he would be too busy to do it and I would write the articles. I was his
tech support for the graphical charting packages. The technical charting
packages were also my "fruit fly"/muse for learning new languages. Every time
I wanted to learn a language, I would re-implement my charting package. Dad
fancies himself an astrologer so for a while there were articles on stocks and
astrology. "You must be a Virgo - cause your wallet is so thick ;)"

At one point, he was the owner/editor of a newspaper publication himself and
we had the union workers protesting outside our residence for a day on some
matter. The newspaper died fairly quickly when we couldn't find advertising to
support it.

One event from this period that sticks out. Like twelve years old are wont to
do, I'd asked for a bicycle. My dad usually responds to these with - "If I
invest in the bike, what will we get back?" I have better answers now. Anyway,
he bought me a really unappealing cheap, robust bike that I was ashamed to
drive with my friends. It never got much use.

So by the time I graduated college, I knew roughly what stocks were. I had
written technical charting analysis packages, understood EPS and P/E and knew
that you only put money into something if you get more money back.

For my master's thesis I worked on Genetic programming and growing technical
analysis indicators to trade stocks.

This is a formidable head start but my investing record is quite pitiful. I
understand a lot of the terms but not how to apply them successfully. I've
found quite a few ways to fail and am now comfortable sticking with invest
funds.

But I continue to invest and read up on investing. I believe it is the easiest
way for me to reach my "magic number". And I enjoy the process. But most of my
money is in index funds.

\-----------------------------

Advise: On reflection, I can recommend the following.

1\. Get a broad 30,000 foot view of the different investing philosophies
(Technical analysis, Fundamental analysis, value investing, special
situations, Dividend investing, etc.). Evaluate these schools against each
other and against yourself. For example - I started out as a technical
investor, but it made no logical sense to me. So I switched to momentum
investing and sucked at that. Now I'm trying value investing on for size. Some
of these methodologies will fit your personality and others will not. The book
recommendations made in this thread help. Random walk down wall street says
markets are efficient so don't try to beat them. Fisher's book will have you
picking stocks. Some of these arguments will resonate with you and others
won't. Try on these philosophies. "Strong opinions weakly held" comes to mind.

2\. For value investing - forget the technical jargon and Investopedia.
Approach the stock from a HN/startup/VC point of view. Imagine you are buying
a business. If this company asked for your money, would you give it? What
questions would you ask as a VC?

\- What is the market size?

\- Are the users growing?

\- What is the infrastructure cost?

\- What is the exit strategy?

\- Who are the competitors?

\- What are the risks?

Shark tank does a good job making this sort of mental modelling accessible in
video form.

You only need the finance terms to answer these questions. But the first task
is to ask the right questions.

The problem you'll find is that most public traded companies do lots of things
and it gets confusing. Find the 1-3 most important things to focus on or look
for smaller companies.

3\. As others have recommended, take a stock and make a recommendation. Write
out an analysis of whether you would buy or sell. Then look at the analyst
reports for that stock. Look at seekingalpha.com articles. What did you miss?
What insight did you have that nobody else did? This is the hard work of
having an opinion that cannot be done from videos. Investing is a contact
sport for ideas and you need to understand the feel of the soccer ball on your
feet.

4\. Be realistic. What kind of returns are you expecting? Anything more than
10-15% is unrealistic in the early days. Even if the return exists, would you
be willing to risk enough in that one opportunity to make an overall
difference in your net-worth? This is where portfolio management comes in. The
more you diversify, the less risk and return you have. The less you diversify,
the more certain you have to be in your abilities. For those of us who are
unsure, getting to that point of certainty is long road.

\-------------

Good luck - you have a wonderfully interesting road in front of you that will
keep you excited for years.

------
brokencog
If your goal is to "make money" by personal selection of
equities/futures/options/ETFs you will in the long run lose more money than
having kept the money in a savings account. You will lose both the capital and
interest.

Since the fastest way in the market to make a million dollars has historically
been to start with two million, in todays markets one would need to start with
10 million.

Today 99% of profitable market trades are automated. You will neither have the
hardware infrastructure, technical accumen, or market/insider knowledge to
EVER compete. You may eventually acquire a sufficient technical understanding.
Individually you will never gain the other two.

If you want to "gamble" then I would suggest you figure out how much money you
are willing to lose. If it is less than five digits, you will have neither
enough for learning nor enough to survive setbacks. Initial minor choice: take
this cash to Vegas rather than Wall St.

Once you have your trading account setup and funded, leave it alone for the
next month. Watch market news. Read analysis. Join trading forums. Once you
are reasonably fluent in the lingo and action, go back to your trading
account. Second decision point: IF you are still interested in losing all that
cash sitting in the account (think of what you could have used it for this
past month, or how much it will accrue in your IRA/401k/saving account), then
start tracking sectors which appeal to you.

Develop analysis to track stocks/sectors/etc in such a way that you feel you
have insights to offer into the above discussion venues.

Now, the hard part. If you have spent sufficient time to gain understanding,
and still have an interest in spending even greater time, then you are ready
to start gambling for real.

You will have developed specific sectors/equities which you are interested in
trading and so will have a reasonable idea about what to bet on. Do so with
1/4 or 1/3 of your cash. Decide entry, exit and bail out prices. Ignore these
at the certainty of loss. Make a buy order, keeping your perviously intuited
prices in mind. Wait for either a profit sale or a stop-loss sale. After sale,
assess every step of you process. What was accurate? Wrong? Unclear? Resolve
all these questions.

Repeat this process until you have no more trading cash available in your
account.

Final decision: Either: scrimp, scrounge, beg, borrow and steal another stake;
deposit into account and enter a lifelong addictive passion of passing your
own money into the coffers of "others." OR: acknowledge you have neither the
time, interest, expertise, insider knowledge, infrastructure access or capital
to continue this gambling and walk away.

Option 1 will cost you money, health and familial ties. Option 2 will earn you
great wealth and free time.

Good luck. Have fun storming the markets and don't say you weren't warned.

~~~
fauigerzigerk
_> Today 99% of profitable market trades are automated_

Do you mean that 99% of all profits end up with HFT firms?

------
aws_ls
Many others have wisely advised caution. This is an area which interests me as
well. A lot. So have read a lot of articles and also some books on the topic
(some may only indirectly apply to this topic)

\- 'The Big Short' & 'Liar's Poker' by Michael Lewis

\- AntiFragile by N N Taleb (There are other's by Taleb, which I haven't read)

\- Seeking Wisdom by Peter Bevelin (on lessons learnt from Warren Buffet &
Charlie Munger -- Yes, few of the most richest guys, who gained perhaps)[1]

I have also made some mistakes in investing. One so obvious mistake in
hindsight, one was around 2007, when I moved a large portion of my networth
from a single stock, to a diverse portfolio. Which was a good thing in itself,
as I was moving it from all-eggs-in-a-basket to more distributed. But When the
crash happened (world wide) I might have gone down 30%! The single stock, was
comparatively down by much less. The good thing I did was not to do a panic
sell in 2009. Though Discarded some stocks which were proven worthless (some
down by 95%), just to avoid the pain of seeing them in my portfolio. But I
kept the Mutual funds, which again started to come back to the original levels
around 2011 and later on.

In restrospect, I should have reduced the risk fast. That is moved it all to
cash. Then gone about investing slowly. By which I would have escaped huge
downside (2008/2009). The problem is I knew the mantra already. But it got
firmly registered after that experience. Another such golden rule is 'Buy when
cheap, Sell when high'. Sounds very simple, but hard to grok it fully, unless
you have felt some pain.

Having learnt that lesson. Now I keep most of my investment outside the stock
market (exited during the rise of 2014). And keep only lesser amount around
10-15% in stock market. And that too only in index funds.

So IMHO, there is clearly no one size fits all. Investing and gaining from it
is very much possible. Wonder if there is any vested interest in the mantra
which gurus give i.e. invest only in mutual funds/index funds. Do they want
others to not compete with them? :-)

But it does take a lot of time and years and pain to become good at it. And
time is the biggest resource constraint, which perhaps we (the non-pros) all
have. So at present I like to read everything I find on the topic. But decide
to play it safe (i.e. fixed deposits, index funds, and similar). As once you
are in the game i.e. investing in stocks/instruments which have huge
upsides/downsides and hence riskier. You need to be more involved. And my
personal experience its very difficult to do that, with things like
programming and trying to grow your own business.

Hope this misc bit of reading pointers and micro experience share, is of tiny
bit use. I am ever interested to read as much on this topic - views, articles,
particularly the insights people learn from experience.

[1] Had got this reco via Derek sivers
[https://sivers.org/book/SeekingWisdom](https://sivers.org/book/SeekingWisdom)

Edit: typo

------
jankeromnes
ZeroHedge

------
lowglow
[Deleted]

~~~
bsilvereagle
Anything you upvote shows up in your profile under "saved stories" or "saved
comments".

~~~
lowglow
Ah, I did not know that, thanks!

