The Education of a Value Investor: Part 2
The Education of a Value Investor: The Good, the “Bad,” and the “Ugly.”
We do not see things as they are. We see them as we are. – The Talmud
Part II: The “Bad”
To be fair, the author delivered exactly on his promise in the first paragraph of his book:
My goal in writing this book is to share some of what I’ve learned on my path as an investor. It is about the education of this investor, not any other investor. This story is not an investment how-to. It’s not a road map. Rather, it is she story of my journey and of what I’ve learned along the way. With my own flaws and foibles and idiosyncratic abilities—and despite my considerable blind spots.
I titled this part of the review, “Bad” because I was hoping for so much more from the author. Much of his description of his investment process is cursory and his analysis seemed a mile wide and a half-inch thick. Examples will be discussed in part III. He never promised that in his opening paragraph, but more experienced investors will then have little to learn from The Education of a Value Investor.
If you want to learn about the psychology of investing and trading then start with the classic, Reminiscences of a Stock Operator by Edwin Lefevre. Tudor Jones calls it a textbook for speculation.
Another relatively unknown classic, Why You Win or Lose by Fred Kelly (1930) See a synopsis here:WHY_YOU_WIN_or_LOSE_Fred_Kelly (1)
Investing is something you do. Like sex, reading about another’s activities will only take you so far in understanding it. You must apply yourself, actually invest, and review your results.
Two excellent books on having an investment process and managing emotions:
Trader Vic-Methods of a Wall Street Master and Trader Vic II-Principles of Professional Speculation by Victor Sperandeo.
Back to a hardcore value investor. Read, There’s Always Something To Do, The Peter Cundill Investment Approach. Cundill was a Canadian Graham and Dodder.
An interesting romp through the investing world, The Money Game by Adam Smith.
Simple But Not Easy by Richard Oldfield is another interesting overview by an old pro.
Then if you want to understand why you must fit investment to YOUR OWN approach, read about all the different ways there are to trade and invest by reading the Market Wizard books by Jack Schwager or Free Capital by Guy Thomas.
Of course, go to the original sources and read all the investment letters from Buffett, Munger, Klarman, Tweedy Browne. Type in their names in the csinvesting.org search box and see where the links lead you.
In Part III, the “Ugly” I take off the gloves and point out the author’s fuzzy thinking regarding the financial crisis.