A Newbie Guide to Investing

For a newbie, these are the top 10 investment books that range from easy to difficult to help improve your investment skills

1. Economic Moats: The Little Book that Builds Wealth by Pat Dorsey
2. Moneyball: The Art of Winning an Unfair Game by Michael Lewis
3. Fiasco: The Inside Story of a Wall Street Trader by Frank Parindy
4. You can be a Stock Market Genius! By Joel Greenblatt
5. Margin of Safety by Seth Klarman

Read about the top investment books here
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Disclaimer: This is not a buy or sell stock tip. Please do your own research. 
Value investing blog: http://valuestocksinvesting.blogspot.sg/

Hey All,

I m currently new to value investing as a whole though i have done as much research as i could read up and still reading.
i do have a few questions for all the wise man here if you could help with this new guy:

1) Do you use ur brokers research on the company or do you strip the annual reports by yourself?
2) If u strip the reports urself, what do u do if lets say some fundamentals does not tally with those given by your broker?

thanks.

(29-05-2013, 09:20 AM)Matt88 Wrote: Hey All,

I m currently new to value investing as a whole though i have done as much research as i could read up and still reading.
i do have a few questions for all the wise man here if you could help with this new guy:

1) Do you use ur brokers research on the company or do you strip the annual reports by yourself?
2) If u strip the reports urself, what do u do if lets say some fundamentals does not tally with those given by your broker?

thanks.

Hello and welcome to the forum.

1) I strip the AR myself for the key numbers.
2) I don't really care for broker numbers - I rely on the AR for the numbers. Brokers are human too and sometimes they may make mistakes. Better to get your numbers from the source.

Hope this helps.

(29-05-2013, 09:28 AM)Musicwhiz Wrote:

(29-05-2013, 09:20 AM)Matt88 Wrote: Hey All,

I m currently new to value investing as a whole though i have done as much research as i could read up and still reading.
i do have a few questions for all the wise man here if you could help with this new guy:

1) Do you use ur brokers research on the company or do you strip the annual reports by yourself?
2) If u strip the reports urself, what do u do if lets say some fundamentals does not tally with those given by your broker?

thanks.

Hello and welcome to the forum.

1) I strip the AR myself for the key numbers.
2) I don't really care for broker numbers - I rely on the AR for the numbers. Brokers are human too and sometimes they may make mistakes. Better to get your numbers from the source.

Hope this helps.

To add-on.

Once upon a time, senior told us don't listen to one-side view, we should listen to views from every stakeholders

AR is view from BOD and auditor, which are important stakeholders

Broker's report is view from one has either attended investor seminar or company visit, which might be useful.

If competitor's view is available, that is another good one we should never ignore.

Of course, the best is your own view, after stripping AR and digested the numbers...

Actually AR is for whom it is compiled?
It's for the bankers, creditors, tax authorities, legal authorities, investors, potential investors, etc... But don't forget it is also first for the business owners.

(29-05-2013, 10:00 AM)CityFarmer Wrote:

(29-05-2013, 09:28 AM)Musicwhiz Wrote:

(29-05-2013, 09:20 AM)Matt88 Wrote: Hey All,

I m currently new to value investing as a whole though i have done as much research as i could read up and still reading.
i do have a few questions for all the wise man here if you could help with this new guy:

1) Do you use ur brokers research on the company or do you strip the annual reports by yourself?
2) If u strip the reports urself, what do u do if lets say some fundamentals does not tally with those given by your broker?

thanks.

Hello and welcome to the forum.

1) I strip the AR myself for the key numbers.
2) I don't really care for broker numbers - I rely on the AR for the numbers. Brokers are human too and sometimes they may make mistakes. Better to get your numbers from the source.

Hope this helps.

To add-on.

Once upon a time, senior told us don't listen to one-side view, we should listen to views from every stakeholders

AR is view from BOD and auditor, which are important stakeholders

Broker's report is view from one has either attended investor seminar or company visit, which might be useful.

If competitor's view is available, that is another good one we should never ignore.

Of course, the best is your own view, after stripping AR and digested the numbers...

Thanks for the advice. i have been stripping off the AR lately but sometimes its tiring.
I guess good news is best when u hear from the source.

(11-06-2013, 07:52 AM)Matt88 Wrote: Thanks for the advice. i have been stripping off the AR lately but sometimes its tiring.
I guess good news is best when u hear from the source.

I recalled the learning period of mine, worked hard to strip down the AR, and reproduced ratios on the AR, and tried to make sense of the numbers, which seem alien to me. It is time consuming, boring and hard job. It is also non-productive in efficiency.

But, without the boring and hard work done then, those numbers in the AR might be still alien to me now. It is part and parcel of learning.

(11-06-2013, 09:37 AM)CityFarmer Wrote:

(11-06-2013, 07:52 AM)Matt88 Wrote: Thanks for the advice. i have been stripping off the AR lately but sometimes its tiring.
I guess good news is best when u hear from the source.

I recalled the learning period of mine, worked hard to strip down the AR, and reproduced ratios on the AR, and tried to make sense of the numbers, which seem alien to me. It is time consuming, boring and hard job. It is also non-productive in efficiency.

But, without the boring and hard work done then, those numbers in the AR might be still alien to me now. It is part and parcel of learning.

I went thro' the same grinding process of being bored and tired... wondering why I'm making myself do such tasks, especially on something I'm mostly clueless about...

But, yes, like what CityFarmer said, it's part of the learning process, even more necessary for people like us, who're not from the Finance industry. You can attend lessons or courses but IMO, nothing can beat the actual hands on / practices in improving your understanding thro' experience..

With enough practice, you can set up your own system and process cum procedures to do these tasks more efficiently and effectively.

Nowadays, it takes me less than 10mins to copy out the figures I want from the quarterly financials to a spreadsheet. Any computations eg. PE, Yield,... and comparisons eg. q-o-q, y-o-y,.. can then be automatically done using simple formulas or macros in the spreadsheet.

The more time consuming and interesting activity is done thinking and analysing and going back to the financials to probe deeper into some of the figures that doesn't seem normal eg. much higher / lower compared to prior quarters / years... trying to figure out what's really happening with the biz... trying to see what's likely to happen in the future... almost relying fully on my 'crystal ball' to try to see the real picture that can easily be fudged by the financials and optimistic statements, in the first place...

I guess at the end of the day, it's the ability to be right (more often than wrong) that gives one the motivation to continue to enjoy, even the mundane and boring tasks...

Striping AR for financial ratio is only part of the job. How to interpret it correctly may not be so easy. i think one must first understand the business as much as possible. i found that's the most difficult part.
Two persons looking at the same ratio, example inventory has gone up from 4 weeks to 5 weeks. One may says good and the other says bad. i think in this case try to find out from insider what is actually happening is the best if you can or have the trusted connections. Which in reality, we usually don't have. So what to do? Don't invest lol, if you are not sure. Or you can take your chance if you think in this case increase in inventory is positive. imo.

Hi all, I am a newbie that is constantly learning. I am recently reading Fisher's "Common stocks and Uncommon profits" and I am wondering how many investors really go about with the "Scuttlebutt" method. Go around and ask employees or competitors question? is it feasible?