David Abrams sums up Security Analysis the best in his introduction to Part VII of the 6th edition, where he calls it “the value investors’ equivalent to Deuteronomy” . SA is an extremely thorough explanation of how to evaluate stocks and bonds, primarily focusing on a company’s income statement and balance sheet. It is not an ideal starting point for young investors, but it is essential reading for any serious investor.
Graham and Dodd discuss the philosophy of value investing eloquently. They provide detailed analysis of dozens of companies’ finance statements to support their arguments about how investors should analyze securities. It is an excellent reality check for anyone who thinks he knows a thing or two about investing.
The examples given by Graham and Dodd are a bit dated (1930s), but most of the principles are still relevant today. The organization of the book is a bit awkward, but I don’t presume that I could organize such a massive quantity and variety of material any better.
It took me a long time to get through this, and I will probably explore many parts of it again over the next few years. It is a valuable addition to any business library and a resource that you can use for a lifetime of investing.
An app that let’s you quickly and easily trade stocks with no transaction fees? It sounds too good to be true. There has to be a catch, right?
This was my reaction when I heard about Robinhood, the app you can download for free and use to start trading stocks with no transaction fees. At the time, most of my retirement savings was in a 403(b) and a state pension. These accounts have limited options, mostly made up of index funds. I am not crazy about index fund investing for several reasons, which I will elaborate on at another time. I had finally opened a Roth IRA with an online broker to invest in individual stocks, but I was frustrated with the fee situation. I investigated Robinhood as an alternative, and here is what happened. Continue reading “Robinhood to the Rescue”
Novel Investor has created a couple charts comparing asset class returns and sector returns in the U.S. and throughout the world. These charts demonstrate the importance of diversification among asset classes and diversification within asset classes. Continue reading “Historical Returns”
Let’s explore some potential investing strategies in 4 different stock sectors: technology, healthcare, energy, and real estate. We’ll start with tech, which had a huge drop today worth serious examination. Continue reading “Sector Study Session”
If you are trying to diversify a portfolio by sector, exposure to certain sectors may have more effect than others. This examination of correlations between SPDR Sector Select funds over the last 10 years shows that certain sectors do, in fact, have less correlation than others. Continue reading “Which Stock Sector Does the Most to Diversify a Portfolio?”
When is the last time your checked your investment allocations? If it has been a few years, a lot has changed in the market. Stocks have reached record highs within the last few months. These gains have probably provided you with a great return. However, they can also set a portfolio’s allocations off-balance. Continue reading “An Example of the Importance of Reallocation”