So if index funds are the way to go, why is the most recommended investing book of all time, even today, about picking individual stocks?
buy ETH
It has many valuable lessons, even more basic and important than the Index fund stuff. Anyway if you get the latest edition, the commentary chapters deal with those and other more modern subjects.
>>1134914
preferred shares are actually the way to go
>>1134963
>It has many valuable lessons, even more basic and important than the Index fund stuff
Such as?
It's a bit confusing to me as a new investor, since on one side I have Bogle saying that index funds are the way to go, and stock picking is relegated to the dustbin of history, and on the other hand the most recommended book is one ABOUT stock picking.
>>1134975
Warren Cuckett himself endorses Vanguard index funds
>>1134976
I know, so why does he recommend this book? Why hasn't he gone out and said that stock picking is dead?
>>1134982
He's a Jewish shill
>>1134914
aaay i just bought it last week
>>1134975
I find it a bit weird that you have this opinion before even reading it.
The important parts of the book are where he teaches about the difference between investing and speculating, the mr market stuff, etc.
And the commentary chapters are very useful also. The book is not only about stock picking; in fact it never goes i to great detail about that except in one chapter.
It's like "the little book that beats the market" by greenblatt: you could skip everything about the magic formula and the book would still be just as useful for a beginner
>>1134991
bought a book freely available with a cursory google search....psssht
>>1134976
True fact but you have to listen closely to what he says. He only says this when talking about the average investor.
That is more a testament to the prowess of mathematical analysis of Standard and Poor's indices teams, relative to the world's.
He is an investor in S+P. Its kind of a humblebrag at his level.
They just invested in KMI if that interests you. Get in on the next dip and you'll be sitting pretty.
>>1135024
Berkshire Hathaway did?
I'm all in VOO baby.
>>1134975
Mr. Market is pretty damn efficient, but at times it undervalues assets and that can be spotted by "value investors". Obviously in 2016 this book shouldn't be followed as a "lesson to make it big" but rather a good way to value companies not only based on their financial statements, but also based on how they manage.
Mr. Buffett really likes to invest in companies that he believes have great management.
>>1135024
>bought a book freely available with a cursory google search....psssht
i aint gonna read a book on my computer, plus, feeling the pages between my fingers feels pretty cool
>>1134914
Index funds are best for passive investors.
Active investors need to do a lot of research to do consistently well.
The revised version of the book has commentary bringing up indexes. Indexes are the safest strategy with with decent returns and you can forget about them all year round.
Now if you want to attempt to beat an indexes performance (5-8%) annualized you're gonna wanna by stocks. Thing is the book is heavily against day trading, its more buy and hold, which makes sense really but that means picking the right stock AND still waiting years for it to pay itself off.
The average stock pays itself back in about 15 years much like how a commercial rental property pays itself off in 13. You buy into a working business and stay long enough for it to make you back some money. Now if you spend 50k on a business and it pays itself off in 15 years (perfectly reasonable) then every dollar after that mark is like owning a passive income stream aka a small share of a business.
Its all perspective, everyones investing strategy is different because people have different time frames, expectations or view of the world so just tailor your investing to your needs.
>>1135111
>with decent returns
but from what I've read, their returns are _better_ than active management, so surely passive investing beats out active (i.e. picking stocks), right?
>>1134914
Because they didn't have ETH back then.
>>1135395
from the latest edition of the intelligent investor:
"as the years pass, the cost advantage of indexing will keep accruing relentlessly. Hold an index fund for 20 years or more, adding new money every month, and you are all but
certain to outperform the vast majority of professional and individual investors alike. Late in his life, Graham praised index funds as the best choice for individual investors"
>>1135111
index funds are the way to go for retail customers, which most of you are. for professionals there are way better options.
>>1136235
Where do you invest after getting good?
Having a passive income without doing anything and with little risk sounds nice and all but waiting 15 years for anything to pay off can't be the best way to go
>index funds avg what, like 5-9% a year
>a single stock can do that in a week
Its simple to understand
>>1134914
But Benjamin Graham recommends passive index funds. Not just for defensive investors (as he outlines in The Intelligent Investor) but everybody.
>>1134991
You know that literally every public library has this book, right?
Index funds are a meme for lazy accoutants.
If you have been following tbe markets, youd know ehy the index fund meme is bullshit.
You can always invest in stocks and then ride the index when it goes up as well.
The only thing you get from index riding is less liability, and the u.s. isnt invinceable, especially with shillary, sanders and trump.
>>1134914
Too much effort. Picking stocks is not for the common man.
>>1136850
less risk = less loss = more compounded over time
the worst thing you can do in investing is lose money because than you have to make even better investments to get back to were you started
>>1136253
pretty much this. hell, it's "safe" to put a chunk of your money into indexes, but you're wasting your time and capital if you are anywhere near average intelligence.
im sure most of us read investing literature, and it's mostly a waste if you just say "fuck it, put it in index funds". any retard can do that eaisly enough
>>1136879
not keeping a balanced portfolio enjoy your no gains
>>1136197
So why would I need to read that book if that single paragraph explained it? Surely I don't need to bother with financial statements or analyzing companies if index funds is the way to go all the time.
ive been listening to the audiobook on youtube in the truck. seems like this is the 1972 edition a few years before graham died.
it seems like a really good precursor of the basics.
thx for bringing it to biz, ill listen to more books from now on.
>>1134914
Low-fee index funds didn't exist until the internet.
The book is older.
duh
Audiobook. No problem, phams.
https://www.youtube.com/watch?v=5FIYNRoXKiE
>>1134914
I've read it. Not so pertinent these days in the age if growth investing and when p/e ratios are through the roof. The days of buy and hold are long gone
>>1136879
>any retard can do that eaisly enough
No, retards don't even know what "funds" are. You really think you are smart enough to beat the market?
>>1137649
this has been bogging my head as well, could someone explain it to me, /biz/?
>>1137889
You don't. It's just that for book to sell it has to contain more pages. If they just said it in one sentence, they couldn't sell the book.
>>1137906
So when he says to look at stuff like "25 times the P/E ratio" and shit like that, I should just ignore it?
>>1138265
Yes. It's mathematically impossible to determine if a security is overpriced, or even to clearly define what "overpriced" means. All you can do is buy everything and hope for the best.
>>1138273
So again, why is a book on stock picking and analysis the most recommended book on investing, if none of it applies anymore? Even today people are recommending it. Even index investors sometimes recommend it.
>>1134914
>The way to go
Every single posts presents their own unique opinion but they all claim it's "the way to go"
Sure investing long time into a trustworthy fund that is already doing great is a guarantee you'll output good cash in 20 - 30 years, but for everything else you have to already have an natural talent at observing firms advantages over others and study some serious economy.
Everything else is just robbing, stealing, lying fucking people over or being the first.
>>1135073
>feels
Gl becoming a millionaire - trust your emotions ok?
>>1135111
>The average stock pays itself back in about 15 years
>spending the best years of your life living like a homeless Spartan so you can achieve an additional income of 100 bucks a month when you are 40
what's the point to be quite honest
>>1137657
There are like 5 posts above you that suggest REVISED version - you came exactly like some retard saying he lists to first edition.
Don't expect to become rich.
>>1137711
Makes 0 logic, stocks are business not plastic coins which might increase or decrease in value.
I guess where there are less stocks, the company is from shitty to average - of course prices are going to fluctuate like crazy because people are selling and buying their stocks based on emotions, shitty computer algorithms and so on... so it's more of a game of dice where if you spend most of your time developing algorithms you might have a 10% increased chance of success - but for everything else it's just business.
>>1138310
>>spending the best years of your life living like a homeless Spartan so you can achieve an additional income of 100 bucks a month when you are 40
The correct way of looking at it is that every dollar you spend when you're 20 could (conservatively) be $40 by the time you retire. So that $900 iphone is really robbing you of $36,000. That $1500 gaming rig? $60k down the tubes.
God help you if you bought a new $30k car; that would have been $1.2m.
>>1138316
What else is there to learn? I know I sound ignorant but everywhere I look I see "index funds beat active management", which would mean learning anything else is a waste of time.
>>1138445
First, I agree that if you have a short attention span you may just "believe" that "put it all in index funds" is everything you need to know. But when you put your money on index funds tomorrow, and start noticing how your money goes down every month instead of up, doubts may come up. So, it's useful to learn a little about market fluctuations etc. to understand why you're supposed to just "hold it out" and not try to do market timing, when everything you read and watch on tv tells you to sell this, buy that, invest on gold/oil, the next crash is coming etc.
Besides, the book covers basic stuff like dollar cost averaging, the importance of inflation on your investment's returns, stock vs bonds (and asset allocation), history of crashes, dividend reinvesting... not all of these are explored in detail but are very useful for a beginner. Of course maybe you don't care enough about the subject to read a whole book; that's why nowadays we have investopedia and wikis.
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