Continuing on the reading binge, I’ve read:
The Warren Buffet Way by Robert G. Hagstrom: This book got really repetitive after a while. Warren Buffet is a disciple of
Benjamin Graham, the original value investor, who is referred to heavily in all three books. According to Graham, the theories of an efficient market don’t apply very well, and it’s occasionally very easy (especially during a recession) to buy companies (or their stocks) for far less than they’re worth. Buffet simply buys the whole company. The best advice is that “the market is only useful as a reference to see if anyone’s offering to do something foolish”. It’s a theme that’s echoed in all three books.
One Up On Wall Street by Peter Lynch and John Rothchild: Not as good as I’d hoped, but in some ways better, and worth reading. The title comes from the idea that individual investors are actually better placed to take advantage of the market before institutions, since they often have access to information to assess a company with before analysts even take a look at the company. He then follows this up by saying that you should treat it as a tip, and that you should treat all tips the same: as a reason for investigating a particular company. All of the preceeding didn’t impress me much. But he then tells you how he goes about assessing a company, especially reasons why he won’t buy a company, which I found very helpful.
The Intelligent Asset Allocator by William J. Bernstein: The best of the three. This book picks up where Random Walk leaves off; that book encourages diversification, while this one shows you how to do it. Also, Random Walk focuses largely on the stock market, whereas this book discusses lots of asset classes and the correlations between them and how to pick a portfolio designed to maximize return while reducing risk. Also he spends a lot of time on specific details about which mutual funds are good for various asset classes, as well as various tips for really squeezing out as much return as possible through thinks like tax-conscious funds.