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A successful man is one who can lay a firm foundation with the bricks others have thrown at him.- David Brinkley
Buy dollars for fifty cents and outperform the market… sounds easy right? Warren Buffett definitely makes it seem like it. We try to make it easy for our PRO members, but it ultimately depends on the individual’s time, personal habits and financial knowledge whether he or she will outperform the market. Much of the media , both online and offline, assume each individual has enough financial knowledge to read their article, subscribe to their blog, or purchase their product. But what if an individual does not have the financial knowledge? What if all of a sudden they want to take control of their own portfolio or at least want to know what is going on with their 401K? Below are two books that should help anyone interested in learning value investing . Both books are readable, affordable and are available in our value investing library.
Peter Lynch- Learn to Earn
ISBN: 0471180033
The first book is by one of my favorite authors Peter Lynch. Not only did he outperform the market by a significant margin, but he also wrote a couple of good books. All 3 of his books are readable and filled with golden nuggets. Learn to Earn is strictly for individuals new to the stock market and really emphasizes the reason why stock prices rise over time:
“This simple point–that the price of a stock is directly related to a company’s earning power–is often overlooked, even by sophisticated investors”
Definitely do not expect detailed analysis in this book. This book is strictly for individuals who want a good introduction to stocks, finance and companies. For individuals who are beyond the basics, definitely read One Up On Wall Street to get more details on Peter Lynch’s investment philosophy.
Pat Dorsey- The Five Rules for Successful Stock Investing
ISBN: 0471686174
This book will teach you how to fish. There is simply no other way to put it. This has to be one of the most undervalued books out there. As a matter of fact, I will go on a limb and say this is one of the best guides out there to evaluating companies and what a stock price actually represents and whether you are overpaying for a stock. It’s like a modern and readable value investing guide. It is well written, introduces individuals to basic accounting, the concept of margin of safety and shows the reader a basic discounted cash flow. Below is a link to the video Pat Dorsey did for Amazon, he pretty much summarizes the book up.
http://www.amazon.com/gp/mpd/permalink/m3NJ5OUJA1MCK1
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July 2nd, 2009 at 5:07 am
Yep. Thoroughly enjoyed Pat Dorsey’s book ever since I started investing.
July 2nd, 2009 at 5:34 am
It’s been a while since I read it. i will have to put it on the “to-do’ list”. I’m currently re-reading One Up On Wall Street..
July 3rd, 2009 at 9:43 pm
Excellent books to read when starting investing.
July 6th, 2009 at 2:58 pm
Definitely. I might go back and read the Pat Dorsey book, I believe it was the first book that taught me how to do a DCF.