Stock investment resources

I don't feel so quite alone now. Thanks.

 

Peter Lynch: Secrets to success | Investing lessons | Fidelity

 

A blast from the past.

Quite a few years since I have read works by Peter Lynch.

If I remember correctly in one of his papers he did numbers using two investors each investing a set amount every year over a long time. One put money in at the highest point each year and the other the lowest. He concluded the different at the end wasn't very much so market timing was pointless. He was a stock picker though - based on simple principles. It was pretty close to Warren Buffet's concepts as well.

In a meandering sort of way I've not done or attempted the market timing thing in line with that but no longer the direct share holding aspect.

 

More important than this in determining the end result is sequence of return. This not only impacts retirees but accumulators as well. Even with DCA throughout one’s working life luck plays a role. Be sure to choose the best time of birth.

 

Neat academic theory.

Never looked at or concerned myself with SORR.

 

In my case more recently I wish I hadn’t.

 

LOL. That is very funny. Almost spilled me coffee while having a chortle.

As you indicated by mentioning when you're born and what is implied in SORR, which I do understand to some extent, is there are elements which you cannot control such happily retire today, unable to return to work for various reasons and the market tanks by 50% next week. Oops.

So many aspects of life can be out of our control like health, the Association of ******s which is now a world governing body, blah, blah and even personal relationships sometimes. Worrying about money should be the least of our concerns in one way despite having a role to play.

Best just to plod on doing the best you can.

Who is Bernstein by the way? A highly successful investor who runs Blackrock or something similar? Not teasing there I really don't know who he is.

 

Yes, spot on. Hence why I’ve lost interest in researching this sort of thing. In terms of what an investor can do it seems to come back to the same thing. Low fee, broad diversification locally and globally, invest when you’ve got the cash regardless of what the market is doing then forget about it.

 

Geez I thought you’d know all about him as he wrote the book FOUR PILLARS (of investing).

MIB: William J. Bernstein, Efficient Frontier - The Big Picture

 

The best way to decrease the risk of the sequence of your returns is to frontload your purchases in stocks at an early age. Early typically means your 20s but even those in their 30s and 40s may still have 6 to 7 decades ahead of them to allow compounding to do the heavy lifting for them when you include the retirement years.

Bernstein writes:

What we have learned here is that investing all of your money up front in stocks avoids “sequence risk.” That is, with a lump sum, a particularly good or bad sequence of returns will not affect your final result one bit. Of course, unless you began your adult life as a wealthy heir, you don’t have that option. But the corollary still holds. Investing as much as possible in stocks and other risky assets up front maximally mitigates sequence risk.

To wit, it’s virtually impossible for young workers to deploy their investment capital too aggressively, because their human capital overwhelms it.

Sequence of return risk in the markets is completely out of your control. So is the year in which you were born, which is why luck often plays a larger role in people’s financial outcomes than most are willing to admit.

But you do control your savings rate and how much money you spend on discretionary items. Even though young people may be behind financially because more of us went to college than the older generations, there is still plenty of time to make up for that shortfall.

You just have to start sooner rather than later.

The Life Cycle of Wealth - A Wealth of Common Sense

 

Given the choice between the booze and the book, I'd go for the booze. Greater enjoyment value and more entertaining.

But thanks for the link - which I am unlikely to open.

 

Don’t we all wish that.

 

It's why I generally give a brief outline...Just for you Mr King

 

I can't be cranky with that approach. But it isn't for want of trying.

No, it really is good people post snippets and links for people to read. You never know how useful the information may be to them.

 

“It would be a lot to accept that the US business world – and the cash flows it will produce in the future – are worth 13% less today than they were on February 19,” Marks wrote.

“It’s ok to do some buying, because things are cheaper,” he argued. However, he cautioned that stock prices were lofty before the selloff, meaning they’re “not necessarily a giveaway” now.

Latest memo from Howard Marks: Nobody Knows II

Over the last few weeks, I’ve been asked repeatedly for my view of the coronavirus and its implications for the markets. I’ve had a ready answer, thanks to something from my January memo, You Bet! As you may remember, I drew heavily on quotations from Annie Duke’s book on decision making, Thinking in Bets. The one that stayed with me most – and that I’ve used a lot since the memo was published on January 13 – is this one:

An expert in any field will have an advantage over a rookie. But neither the veteran nor the rookie can be sure what the next flip will look like. The veteran will just have a better guess. (Emphasis added)

In other words, if I said anything about the coronavirus, it would be

 

Could not agree more. I need to see another 10% drop to feel like its a good buy. Doesn't mean I will not invest at todays prices, but will not jump in head first right now.

 

Probably no titles here that I could add to the Stock Investment Resources List outlined already, however here is a selection I have piled up in a corner to re-read in preparation for the volatility ahead and opportunities that may ensue and to sort out my own head and mind set and help my entry decisions. In no particular order:


"Your Money and Your Brain" Jason Zweig
"The Most Important Thing" Howard Marks
"Trading In The Zone" Mark Douglas
"Unshakeable" Tony Robbins
"The Psychology of Investing" Colin Nicholson
"Motivated Money" Peter Thornhill
"Super Smart Money" Michael Holmes
"One Up on Wall Street" Peter Lynch
"A Random Walk Down Wall Street" Burton Malkiel

And of course dipping into "Poor Charlie's Almanack" always keeps me
amused, entertained and educated. I love Charlie Munger.

 

I just finished reading Charlie's Almanack, and I'm not ashamed to say that half of it went over my head. How he thinks about things from so many different angles/levels (mental models as he calls them), is just unreal.

 

Ben Carlson and Michael Batnick on Animal Spirits Podcast is always worth a listen, particularly now. If you are a rational investor (in the minority) with
An interest in economics and the market you will probably enjoy it.
Animal Spirits - A Wealth of Common Sense

 

Nice. Thanks for the share. Just downloaded a few titles that appeal. Shall listen later on.