Hi, I'm new here, and to investing; first post; i like Benjamin Graham and Warren Buffett's style of investing.I don't want explanations for the problems below! I'm just stating my fears, ignorance level and why I'm here. If you can help me out with reading material that would be super!----------------------------Problem 1: I've been trying to understand WB's investment in Burlington North SF vs some other rail-road. I don't know anything about rail-roads besides trains go choo!I've been looking at some books on Amazon that are on the railways in America.Problem 2: I took a look at the batteries sector and promptly developed a headache. So many companies with PhD's mostly going bust - it seems cyclical - first cycle was the Li+ cycle now it looks to be carbon-nano-tubes (note: i know just 2 cycles, sure there were more).Problem 3: Then there is WB's IBM buy which i don't understand - looks like a lousy investment to me - the business looks hopeless to me - i know, i know, Watson Research, Deep Blue, new nano chip, healthcare - trouble is I don't understand the business and neither should Warren. If it was solely a IT buy, why not some other firm?----------------------------I've been googling news-reports! Fiddling with Google Finance and messing with EDGAR! I'm a total newbie and right now I want to understand businesses - not with intent to make money or to invest money (I have none and I don't intend to risk what I have).Seems to me it's a good way to understand what companies are, why they fail, how they are created - it's all purely academic. Corporates always look very mysterious to me.1. I want to study sectors one by one, and to do this.. well.. how!???Google takes too much time. Clicking, tabbing, waiting..2. I've heard about Mergent's (Moody's) Manual BUT it's pay-ware. Is there a way for me to get/access/download 20-30 years of annual reports?Commodity prices, currency prices.. When George Soros says he broke the Bank of England, I'd like to look at the actual data.. I don't want to read about it on the Wiki :(3. Battery companies - is there a list/book - can I look at that one list and confidentally say that I have studied every battery company in North America (Private and Public)? Someone on seattle.wa.us.financialchat.com (IRC) suggested I look at Li-ETFs. Those guys seemed like a very shady lot - kept suggesting "candle sticks" and day trading stuff.. still not a bad idea but slow since Lithium ETFs will contain only stuff for lithium batteries.. which is mostly everybody.. but it didn't look like a very elegant way and time wasting.. a book, manual would be better (from Amazon perhaps but names since I'm not a millionaire it would have to be updated for 2013 and then what about historical data)4. How do i go about researching other sectors - gyroscope manufacturers? Spectroscope manufacturers?Those guys on IRC sarcastically suggested a BloomBox which happens to be a Bloomber Terminal all off 2KUSD/mo which would be extremely expensive!5. Googling threw up libraries but I have no access to them where i live; Just the blasted net..I could continue googling but I've decided it's incredibly stupid to do so for research purposes.. stuff on google is based on popularity and links to a site.. by definition it's fated to toss up junk first. Added to which it's distracting - you get dragged in to cars and then carbon-nanotubes and then IBM chips.. the companies going bust are nearly endless.. and the gazillion names tell me nothing about the business.I'd like something like a list of companies to go through one by one arranged sector wise for easy comparison - where do i find such a directory.6. Commodities - how does one start looking at the various types of coal and oil. Are there books that describe what it takes to run an oil company, car company, battery company, shipping fleet, etc??
Welcome Vekm,You are not alone several well known value investors have scratched their heads over W.E.B.'s IBM and railroad buys. I would suggest that you start with http://www.amazon.com/Intelligent-Investor-Definitive-Invest...and http://www.amazon.com/Uncommon-Profits-Writings-Investment-C...These two books are foundational for anyone taking a more fundamental approach to investing. http://www.amazon.com/How-Read-Financial-Report-Wringing/dp/...Is a great primer on the three sheetsAfter that, if you want to know more about an industry there are two primary places to dig. Sell side analyst reports on industry are useful, their recommendations and targets might be skewed but they know their back yard. If they didn't they wouldn't keep their job. The second place to go is start reading the financial reports, here is where Google, Yahoo!, Investopedia.com come in handy. If you run into a term or idea that you want to explore further start with the web cuz you are already paying for it. jack
Just to clarify - take a drug or medical devices company - they have to file things with the govt (FDA, IRS, Incorporation at the state lvl). I don't want a book that spends *any* time teaching me how to discount their assets (amortize). Instead I'm looking for a book that teaches me where to find raw information: eg: IRS Form 990-N for Non Profits. Won't oil companies have to disclose where they are drilling and the results of the essay; or deep sea dredging for minerals - what permits do they need, what departments do they have to file it in (Geology)? I don't want a management book - books on the following leading bozos: Lee Ioca, Dale Carnegie, Andy Grove, Warren Buffet. Note Benjamin Graham never wrote a book on himself.
This might help:The Investment Checklist: The Art of In Depth Research by Michael ShearnDownload the pdf:http://csinvesting.org/wp-content/uploads/2012/02/the_invest...... Chap 1 How to Generate IdeasChap 2 Understanding the Business – The BasicsChap 3 Understanding the Business – From the Customer PerspectiveChap 4 Evaluating the Strengths and Weaknesses of a Business and IndustryChap 5 Measuring the Operating and Financial Health of the BusinessChap 6 Evaluating the Distribution of Earnings (Cash Flows)Chap 7 Assessing the Quality of Management - Background and Classification: Who are They?Chap 8 Assessing the Quality of Management – Competence: How Management Operates the BusinessChap 9 Assessing the Quality of Management - Positive and Negative TraitsChap 10 Evaluating Growth OpportunitiesChap 11 Evaluating Mergers and AcquisitionsAppendix A: Building a Human Intelligence NetworkAppendix B: How to Interview the Management TeamAppendix C: Your Investment Checklist
I found a couple of books on the net on the shipping industry:Maritime Economics, 3rd EditionElements of ShippingModern Pharmaceutical IndustryPrinciples of Risk Management and InsuranceI don't have a copy of Mergent's and would appreciate suggestions on books regarding industry (any industry, and technology) that other people researching are reading - from amazon and elsewhere. Send me e-mail if you are interested in grouping together and swapping notes and books that have been annotated (PDF annotation) - this will save time wading through the material.
On railroads, check out the Railroads discussion board.http://boards.fool.com/value-comparison-30732831.aspxWe keep it reasonably up to date, and I think you will get prompt responses to any question posted there.The western railroads tend to be more profitable. They carry the containers from China to the midwest, and low sulfur western coal. Union Pacific and BNSF are the main players. BNSF is well managed, and probably has the good numbers Warren Buffett likes. He also likes to invest in American companies. He likes their growth rate and potential to take volume from trucks due to higher fuel costs and better handling of container cargo. But bulk shipments like coal, grain, and now oil are the core of their business.On Moody's check the reference department of your local library. My county library subscribes. So once you get a library card, you can access the sites for free through the library website.
Welcome to the boards!Investing can be a bit overwhelming--especially when you're first starting out. Some very good books have been listed, and I won't add to this list. They are wonderful resources.Instead, I'm going to suggest one thing: When you're starting out, look into something you know. Warren Buffett didn't get caught up in the tech bubble, because he didn't invest loads into companies he couldn't understand.Start with a company that you know, or that you have an interest in. It's taken me years to understand (and I still don't) bio-techs. You speak of nanotubes. That's WAY above my head.I mean no disrespect by this: Keep It Simple. And, yes, it may seem boring at first. But as you investigate a company you know and understand (Home Depot, The GAP, Target, GE, FedEx, United Technologies, InBev...) your learning curve becomes less steep and you can begin delving into companies that are smaller, riskier and perhaps more complicated. Just my two cents,Mike
Hi Mike,"I mean no disrespect by this: Keep It Simple. And, yes, it may seem boring at first. But as you investigate a company you know and understand (Home Depot, The GAP, Target, GE, FedEx, United Technologies, InBev...) your learning curve becomes less steep and you can begin delving into companies that are smaller, riskier and perhaps more complicated. "I agree but:I need help in terms of actual books people have read, related to industry (oil, gas, retail) - this will save me time and money searching on Amazon.What has been suggested so far, by various people, is very generic - I DON'T want more suggestions on 'Security Analysis' and 'value investing' per-se (most of Graham's books: Intelligent Investor, et al.)*********IMPORTANT***********To give you and example: in shipping related books you read about: bill of lading, baltic dry index, demurrage, contract of carriage, etc.Instead people here are very helpfully suggesting all the books an 'Intelligent Investor' should have already have glanced at!Instead please suggest some book in your area of expertise! Target and GAP are big retail chains, what book did you read about their business? Did you read any books on clothing retail and the clothing industry? What machines do they use to spin the clothes - i know they are made in China, so what machines and material do the chinese use?What type of stitch do the T-shirts they make use??? Cross stitch??I am looking to team up with people and swapping notes with them on this kind of stuff (cross stitch). I don't want to hear about Benjamin Graham and his books and Warren Buffett and his homlies. Talk to me about bill o' lading - think of me as someone who worked as the CEO of Intel all his life, and now working for a Railway company (BNSF).. what books on the railways should i read? What govt departments should I bribe? How do i buy land to lay out some track from X to Y?**********END*********
I need help in terms of actual books people have read, related to industry (oil, gas, retail) - this will save me time and money searching on Amazon.If you want to read about sectors, I suggest you look at Value Line. They rank the performance of sectors and summarize what they see as major factors impacting that sector. Their industry reports are organized in sector fashion. Hence, each issue of the print edition contains an update on all the stocks in that sector. They also give you an overview of each stock. I find they are not always complete, but they do cover the high points. Find a stock you like, I'd say read the annual report, the 10K and listen to the conference call after the last earnings report.Realize that finding a book that is compete and up to date on an industry sector is difficult. Business changes constantly. Pros spend a lifetime learning the business, and are often not willing to reveal their secrets for competitive reasons. Mostly investors are aware of strategies they were willing to talk about. That is why those conference calls can be quite an education.As to retail, there is a retail discussion board where you will find postings on trends in the sector. But of course niche players with the right formula can do quite well while the big guys struggle. Again change drives the business. By the time the ink is dry, it can be out of date.
This is going to get long.I gotta be honest. I've never read a single book dealing with a sector I'm thinking of investing in.I'll second Paul's idea of Value Line. Call your local library to see if they have it in their reference section. It is a wonderful resource.For me, I don't want to bog myself down with too much information. I don't need to know which grains and hops Sam Adams Beer is brewed with or any of the beers in InBev's, for that matter. I can taste a few and 'know' if I like it or not. And if I like it, chances are other will as well. Annual (and quarterly) reports will tell me how expansion is going, how much inventory is moving, and accounts receivables are being handled...I know that FedEx and UPS has a business plan that works, I can review the reports to get an idea of how things are going.My father was in the oil/gas exploration field years ago. He can read message boards and know how a start-up company is doing, or how a wildcat rig is doing for a larger company. To me, they're only numbers and words and mean nothing to me. So, I don't own any.Years ago (and if I thought about how long ago it was I might start whimpering) I bought a couple of railroad companies. Kansas City Southern and Canadian Pacific.I bought KSU for two reasons. 1. Because Union Pacific had just merged with Southern Pacific and couldn't move cargo. At all. They were delivering spoiled food and empty tanker cars whose cargo had evaporated. It was a horrible mess for UP. Companies could use KSU to get their cargo to other tracks. A little foolish of me, but I had hopes. Also, 2. NAFTA. Many railroads travel east/west across the United States. KSU travels north/south, into both Canada and Mexico. The rails are there. They were ready for built for NAFTA. I did well with this purchase.When I bought Canadian Pacific, I did it for entirely different reasons. I heard they were thinking of splitting the company up into 5 different companies. I could get in before it happened and then wind up with 5 companies for 1. What a bargain. (CP split into 1. Overseas transportation-CP Ships, 2. Hotels-Fairmont hotels, 3. Coal-Fording 4. Oil/Gas-Encana and 5.Trains-Canadian Pacific) Over the years, the various companies have been bought up by other companies, or I outright sold them. I really can't remember what happened to CP Ships, Encana went through a couple of buyouts and mergers. I was out of it before long. I held Fairmont until it was bought up and taken private. I only recently sold CP. I sold Fording, the coal division, because, well, I don't understand coal. Fording (old ticker: FDG) languished for sometime in the low teens and I was pretty dejected about it. Then it started climbing and sometime in the 40s I sold--essentially doubling my money. I was a happy camper. But I still have no idea about coal.Enron was another company I owned. I bought it because everyone told me "they just make money. It just keeps going up." So I bought some. Then I started reading message boards and after several months I noticed that there was a discussion of a power plant in India that was being built by Enron and the sub-contractors weren't getting paid. It felt rather 'hinky' and didn't sit well with me. I sold it. I lost money on it. But, lo, how I could have lost so much more. And I still couldn't tell you what they do.I have, from time to time, invested in bio-tech companies that have little or nothing to offer. They have an idea that might help with [insert disorder here]. I don't have a Phd, and I don't plan on getting one anytime soon. I look at the board, and the CEO and think "do they have what it takes? More importantly, what have they done in the past?"***** The Takeaway:I'm the kind of investor that thinks of himself as the CEO of the company that I'm investing in. And I delegate EVERYTHING. I don't want to be bothered with the idea of "Would production be better off with a Samratron 2000 or the Harwink IX?" The company is going to know that better than I, and more power to them. Let them sum up things and let me sit in on the conference calls and send me an annual report.And look for that Value Line report.Mike
Mike,To bad I can only recommend this once.Let the experts be experts in their fields. We just need enough of an edge to make money. There is no edge in industry knowledge those best minds are bought and paid for already by the industry or the investment banks.jack
Some good points above. I was down this journey 4 years back. Here are my ideasRead Intelligent investor and maybe Phil Fishers book. I would add Joel Gs Little book / Magic Formula and Peter Lynch's two books. That gives you a few approaches.Then, start with simple businesses. Small businesses. Simple balance sheets. Read the annual report / 10K and few 10Q. See if you can understand the business and the financials. If you need primer on accoun ting, you should do that as well. Try to write up your thoughts. Maybe start a blog.Also, i use ValueLine. its great to get to know companies over time. Read blogs. Read write ups by analysts on Valuesinvestorsclub (guest access).Invest a bit if you can and learn from that. Document your investments in a diary or blog or someplace...Do retrospectives..
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