Baby steps into the investment universe - Analytical; Part 2 of 3
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- Technical vs fundamental
- Stock picking/active vs passive
- Quant or purely quantitative vs traditional
- Stocks vs other assets
- Analytical - how to analyze companies and value them
- Behavioural - how to minimize human errors
Contents
- How to learn
- Learn in stages
- Learning objectives
- What to learn
- Pulling it all together
- Foundation and Intermediate levels URLs
Case Notes I first published this post on 12 July 2020 under "Is there a way to learn (online, free) to invest (Part 1 of 2) ?" as a guide for those who want to be a better investor. I subsequently realized that for many, the post is a second step as they first have to get some basic knowledge about investing. I encountered a "Star Wars" moment. I needed a prequel. So this post cannot be the first of the series and I have re-titled and renumbered it accordingly. |
How to learn
- Gain some knowledge
- Practice to gain experience
- Repeat steps (1) and (2)
- Only move on to the next level after you have mastered a particular level
- Repeat (1) to (4)
- Start to Invest when you reach level 3
- Level 1 – Foundation
- Level 2 – Intermediate
- Level 3 – Advanced
- Level 4 – Expert
Learn in stages
- Foundation level where you focus on concepts
- The Intermediate level where you can start valuing companies using multiples
- The Advanced level where you seriously start number crunching and pick companies
- The Expert level.
Analytical Skillset
- How to analyze the business
- How to value the business
Learning objectives
- Intro to investing
- Intro to business analysis
- Understanding financial statements
- Intro to value investing
- How to analyze business
- Intro to valuation
- How to value companies
- Business strategies
- Value investing spectrum
- CAPM and Modern Portfolio Theory
- Options
- Other investment approaches – Technical, Smart Beta
What to learn
- For each search criteria, I run through what Google has identified
- I don’t select them based on Google page ranking. Rather I try to identify those that complement my historical lists.
Pulling it all together
- This is not a how-to get rich quickly site.
- There is also no secret investing formula.
- The learning process and skillsets to be developed are based on my experience in learning how to invest, in running companies at C-suite levels as well as being the Director of Studies for a renowned MBA programme.
- There is selected a resource list for you to successfully teach yourself how to invest.
- I have arranged the resources into 3 levels – Foundation, Intermediate and Advanced and hope that you become proficient at each level before advancing to the next.
- BTW, if you have come to the part of the post and have yet to read my posts Fundamentals 01 "An Introduction To Investing In Listed Companies" and Fundamentals 02, "The Basics Of Valuing A Company" shame on you.
URL
Foundation
No | Site
| Guide and comments |
Reading materials
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1 | Morningstar Investing Classroom
| · You have to sign up (free) and go to Learn · Read all articles under Investing Basics · Read all articles under Stock under Investing Classroom · I found this site after a year of trying to learn about investing and with hindsight I should have started with this site.
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2 | · Read all articles under Investing 101 and Stock Market Basics, both under Investing Basics · There are also podcasts under the above two topics and you should listen to them. · I go to the Motley Fool whenever I want to start learning about a new topic as I find it simple to digest. But the real value is their case studies.
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3 | · Go to Beginner's Guide to Investing in Stocks and read all the articles. · To be transparent I did not use the material here when I was learning. But on looking thru them, I think there are useful for beginners.
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4 | · Go to Personal Finance, look under Articles and Tutorials read all articles under Stocks and Explainers under Investing. · By the time I found Yahoo Finance, I was already into Level 2 so I actually skimped through many of the material that I am recommending
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5 |
| · This is a site with many sections so you should go the specific URL as provided to get to the recommended reading list. Alternatively, is to Google search under “The Street How to Invest in Stocks” etc · Read all articles under the following 2 URL o How to Invest in Stocks, o How to Invest Your Money and read Stock Market Basics - Stock 101 and Investing Basics - Investing 101 · I watch Cramer more for entertainment and was surprised that his site actually had some good educational material
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Podcasts
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6 | Go to Investing Podcast and search for · Investing Basics or Back to Basics and listen to all those relating to investing · Value Investing - there are blogs and podcasts you should read/listen · Investing for Dummies – listen to this · If you don't have an accounting background, the site has good articles on the various finance and accounting terms · When I started, there were really not many investment podcasts so my learning was more from reading materials. But I think podcasts can help as a refresher.
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7 | · This is a podcast of case studies of companies · I would start with the episode 100 Stock Investing Lessons · Listen to as many case studies as you can · I listen to them to get ideas on where to look for new investments
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8 | · For those without finance or accounting background, this is a good podcast about understanding financial statements · Start with Episode 1 and go through all of them as you will need to be able to read the financial statements · I did not go through any finance/accounting material as I was already familiar with them when I started to learn to invest
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9 | · Go to Episode, under Podcast series, select Investing 101 and listen to all the podcasts here · This is a site I found through Google search.
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10 | Investors Field Guide – Invest Like the Best | · I would start with Episode 51 on Buying Companies With Economic Moats, Pat Dorsey · This podcast is applicable to all the 3 levels of study · One of the podcasts I currently listen to on a regular basis
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Videos | ||
11 |
| · They have 2 videos under the Investing 101 title. Watch both · I found this through Google search
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12 | · This more like an audiobook than a video · Watch/listen to Business management 101 · An important aspect of an investment is assessing management. This gives an overview of what management does. · When I started to learn to invest, I was already familiar with management issues
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13 | · This is another audiobook. · Watch/listen to Business 101 · This is for those without any business background. · I found this through Google search and I thought it gave a good intro for those without any business background
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14 | · There are a couple of videos but focus on Warren Buffett: How to Invest for Beginners and Stock Market for Beginners 2020 · I found this through Google search
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15 | · Ben Graham Centre for Value Investing · This a series of value investing presentations by industry players. · Watch all of them · I still watch this series
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Intermediate
No | Site
| Guide and comments |
Reading materials
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1 | · This is a good intro to business strategies · I suggest that you read all the articles under Business Strategy. · There are two interpretations of “Business analysis”. In my context, I refer to understanding the business for investment purposes. The other interpretation is in software system development where you are determining the business needs in terms of the processes. Skip all the articles relating to this latter definition. · I have read several “Dummies” books over the years and found them to be a good way to start to learn about a new topic
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2 | · This contains a list of websites for learning all aspects of the business. · I am recommending that you go to the various business and investing simulation sites and play those games as part of the case learning experience eg BricksorClicks, Energee Incorporated, How the market works. · I used to be the Director of Studies of a renowned MBA programme and I understand the value of business games and simulation
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3 | · This is a blog with articles, podcasts, and videos about value investing · It is a good intro to value investing and I would recommend that you actually go through all the material (blogs, podcasts, and videos) that is available for free · I found this through Google search and I think it is very comprehensive.
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4 | · The site has articles about investing basics and some case studies, investors' histories. · You should go through all of them · I found this on Google search. I have read lots of investing books and I thought this website give a good intro.
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5 | · This is a site with articles and videos · Focus on valuation and modeling videos · At some stage, you will have to start building your financial models. This site gives you the background info and practice in model building · I am a numerical person so working with modeling using spreadsheets was not something unusual.
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Podcasts
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6 | · This is actually an audiobook on Stock Market Investing for Beginners & Dummies · I found this through Google search
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7 | · This has a series of short podcasts on value investing topics · Start with this episode on 6 Skills You MUST Know Or Learn To Make Money · Listen to as much as possible · I found this on Google search and would have loved to have had this when I started to learn about investing.
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8 | · This is a series of talks by McKinsey partners and executives on strategies · This will give you insights when analyzing a business · Start with the episode on What sets the world’s best CEOs apart as assessing management is an important aspect of your analysis · Listen to as much as possible. You want to understand strategy from the investor’s perspective · I have a consulting background so I did not have to learn this skill
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9 | Motley Fool – Industry Focus | · Motley Fool analysis of specific industries · You will need an understanding of the industry in which a company operate as part of the business analysis · I suggest that you listen to this as general knowledge and when you analyze a company go and look for the specific industry to listen to · One of my favorite site for industry knowledge
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10 |
| · This podcast is about the skills and analysis required by McKinsey and BCG consultants · I think it would help you analyze companies · There are 2 categories in the podcast – case studies and consulting skills. Focus on the case studies · But start with episode 91 on corporate strategy · I was lucky to be working at the C suite level when I started to learn about investing so I focussed my time on the valuation aspects.
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Videos | ||
11 | · Everything You Need to Know About Finance and Investing in Under an Hour by William Ackman. · A good intro for those without any finance or investing background. · I found this years after I have passed Level 2. I would have loved to have started with this
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12 | Valuation by Damodaran
| · These are an intro series without the quantitative aspect of valuation and you should watch all of them · I only found these videos after I have read his book. The best is to watch the videos first
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13 | Kase Learning, Empire Financial Research | · Kase Learning is created by value investor Whitney Tilson and you should watch the Introduction to Value Investing episode. · For those without finance or accounting background, you should also watch the Understanding Financial Statements episode · I first saw Whitney in one of the value investment seminar’s videos and have been following him since · I have also listed Kase Learning for the Advanced Level as I think it is worth following him for everything on his site
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14 | · The University has a series of investment talks. · You should track and watch all of them. Start by watching the Pat Dorsey - Investment Strategies · I still follow these talks.
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15 | · Business Models and Theories · This site has short (generally < 15 minutes) videos on various business concepts. · For those without any business background, you should watch all of them. · I found this through Google search and think that it gives a good summary of business concepts
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