Five great free value investing resources

“In my whole life, I have known no wise people (over a broad subject matter area) who didn’t read all the time – none, zero.” – Charlie Munger And so, here’s a short list of valuable value investing resources that I’ve found, offer insight into developing that mindset essential to successful investing. You’re much better off spending your time absorbing the content from resources like these than seeking out ‘Buy’ and ‘Sell’ recommendations in the pink papers. Farnam Street farnamstreetblog.com Named after the street in Omaha, Nebraska where Berkshire Hathaway keeps it’s headquarters, Farnam Street is run by Shane Parrish, who apparently worked with

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Confessions of a value investor

For the longest time in my investing experience, I felt like a bit of a fraud, when calling myself a “value investor”, the phrase so prominently visible on the header of this site. Here’s why. The definition of value investing, as introduced by the oft-quoted Ben Graham is quite simple: The strategy of selecting stocks that trade for less than their intrinsic values. Sounds simple enough. List all stocks along with their market prices (A). Add intrinsic value (B) as a column. Compute difference B minus A and voila! The stocks with the largest differences are your value stocks. Buy. Wait for

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Successful investing needs a process focus

First a quick thought experiment: Let’s assume that this site offered a stock-trading recommendation email service titled “Bonanza System (BS)” or a similar catchy name. To counter your healthy skepticism, I offer free access for 6 weeks, with weekly email recommendations on stocks to buy and sell. Without committing any money, you monitor how the recommendations pan out… It’s now six weeks later and lo and behold, all the recommendations from the “Bonanza System” have been spot on! You calculate you would’ve made a gain of 46% in just 6 weeks! Just then a new mail notification lights up and you click to see

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Investing success: Rationality scores over Intelligence

We know that tests of conventional intelligence that measure Intelligence Quotient (IQ), are only a part of a measure of how well someone thinks. Yet, most societies focus on intelligence as predictors of successful decision-making. IQ, on it’s own, has been found wanting in explaining success or failure in environments that call for complex decision-making. A paper by Michael Mauboussin and Dave Callahan of Credit Suisse “IQ versus RQ” (link to paper provided at end of post) explores the role of rationality in investment decision-making and it’s impact on success or failure. Prof. Keith Stanovich, a professor of applied psychology at the University of

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