Wisdom from the financial blogosphere

There’s a timeless aspect to a great investment book.

You know it’s amazing when you can read it years or decades later, and its messages are still relevant and wise.

Books like:

Benjamin Graham’s The Intelligent Investor.

John C. Bogle’s Common Sense on Mutual Funds is another.

Philip Fisher’s Common Stocks and Uncommon Profits is a third and

Burton Malkiel’s A Random Walk Down Wall Street is a classic fourth.

Read each of these books twice, from cover to cover, and I can promise you one thing: you will have read far more investment related material than is required for a Series 7 certification (Series 7 certification allows you to be a stockbroker in the U.S. and the academic component can be completed in less than a month) and you’ll have read much more “in depth” investing material (in quantity and quality) than is required for a Certified Financial Planning Certification. It’s hard to believe that a CFP designation can be earned in fewer than 6 months of formal coursework (not to mention the additional required time spent gaining sales and client experience at a brokerage).

Timeless Blog Entries

I’m going to suggest a few blog entries with a timeless component to them.

Sure, there are great bloggers writing daily contemporary reports, but I want to focus on some classic entries: stuff that you could read today, and then read again, twenty years from now, and say, “Yeah, that was super, timeless stuff.” Such posts are based, not on predictions, but on foundations and wisdom. And it’s a strong financial foundation that will make you rich over time: an understanding of human psychology, financial history, and the importance of keeping taxes, costs and fees at bay.

The Young are Rarely Wise

The first one I recommend is from Mike, “the Wise Guy” at The Wise Buck.com.

He outlines the valuable lessons learned after 20 years of investing. It’s my strong bias that wise investors (if they do choose to hire an advisor) should never hire somebody young—regardless of their grades in business school or finance school. Mike doesn’t discuss this bias of mine, but his rules speak more to wisdom than simply knowledge. And the young are rarely wise.

Making investment professionals look silly

Kathy Kristof writes on her blog at Money Watch.com

Kathy Kristof talks about the benefits of couch potato investing. It’s simple, tax efficient, and can beat the clothes off most professional investors over time.

For a Canadian perspective on the same topic, check out Ian McGugan and Duncan Hood’s article from a 2006 edition of MoneySense Magazine.

Ian McGugan has really championed this strategy for Canadians. And the humble Globe and Mail  writer/editor started tracking a Canadian version of the couch potato online, ten years ago. It’s impressive. World stock markets are currently lower than they were a decade ago.

But his couch potato portfolio is up from the year 2000. Way up. The premise of rebalancing, keeping costs low, and avoiding fads has bode well, historically for this concept. And it’s likely to bode well in the future as well.

Looking for other Timeless pieces

If you know of some other timeless, wise pieces from the blogosphere, please link them in the comment section below. There are some great pieces out there worth sharing.








Andrew Hallam

I’m a financial columnist for Canada’s national paper, The Globe and Mail, as well as for AssetBuilder, a financial service firm based in Texas. I’m also the author of Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School (2nd Ed. Wiley 2017) and The Global Expatriate’s Guide To Investing: From Millionaire Teacher to Millionaire Expat (Wiley 2015). My mission is to educate, motivate and inspire people on basic retirement planning and best practices for investing, using evidence-based strategies. I’m happy to comment on your questions. However, please read the Terms of Use, Privacy Policy and the Comments Policy.

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7 Responses

  1. DIY Investor says:

    I like this piece about emotions and risk:

    http://www.timesonline.co.uk/tol/money/article497

    I like this youtube talk by Dan Solin to Google employees as part of their author series:

    http://www.youtube.com/watch?v=Y0LSG2omvEg

    I would add as must reads to your book list Jason Zweig's "Your Monet & Your Brain" and Chancellor's "Devil Take the Hindmost" a really good book on market bubbles.

    Bernstein's "The Intelligent Asset Allocator" and "The Investor's Manifesto" are also great.

    Here's one I enjoyed. It is against my basic thinking because it is a "how to get ultra wealthy" by investing in stocks type of book but I think it is very important to read in areas you don't agree with. To often I think we read what is in our comfort zone and aren't intellectually challenged. It is "Payback Time" by the irrepressible Phil Town a big-time motivational speaker who was supposedly taught the secrets of investing by a multi-millionaire whose lived he saved on a rafting trip on the Colorado river(I know what you're thinking). In any event he does go over, in excrutiating detail, the financial analysis involved in successfully picking individual stocks which is good.

  2. Thanks for those suggestions Robert. I've always been especially impressed by how Google educates its employees. There's this one too, which I know you've seen, but it shows how the heads at Google brought in the big gun experts so their employees wouldn't get ripped off by mutual fund advisors/salespeople:

    http://www.sanfranmag.com/story/best-investment-a

    I'm currently reading "The Investor's Manifesto" for the third or fourth time. I think Bernstein's stuff is great.

    A good friend of mine also read "Payback Time" and now I'm especially curious, after your additional recommendation. He owns it, so I'm going to borrow it from him when I get back from work.

    Thanks Robert,

    Andrew

  3. DIY Investor says:

    @Andrew Hallam

    Phil Town does the detailed research just like you do so I think you'll appreciate his approach. My view is that individuals can beat the market if they are smart, do the research, have the time and have the resources. Furthermore they have to have their emotions in check which is a biggie. Individuals (including big time traders like Kirk) have a huge advantage in that they don't have the excessive costs that most advisors charge directly and indirectly.

    Still the huge outperformance you have achieved is unusual and shouldn't be expected, in my opinion.

  4. @DIY Investor

    Hey Robert,

    As ironic as it sounds, I'm not convinced that I can beat the markets at all, going forward, despite doing it handily for more than a decade. I smile when I read about others who brag, somewhat, of doing it (beating the market) for a year, or three. Statistically, there's such a huge component of luck involved. And in my book, beating the market (even for a decade) can be considered lucky.

    My caution is one of the reasons I bought VEA last week (Vanguard's EAFE index). And this morning, I placed an order for XDV.To (a high dividend yielding Canadian index).

    Investors who beat the market for a short time (and I do consider 11 years a short time) often get big-headed when they should be cautious.

    I always warn the investors in our investment club that the indexes will eventually catch us. And when they do, we plan to index everything. Doing otherwise would be foolish if I gave up such a big lead on the market, and then figured that I could re-gain it through purchasing individual stocks.

    That said, the competitive part in me wants to keep buying some individual equities for my personal account when I've done the right research, and the price is right. It keeps me thinking. And it's fun, as well.

    Thanks for the positive push though. With luck, maybe you're right. Maybe I can beat the market. Long live the investors of Graham and Doddsville, right? They give all active investors a bit of hope:

    http://www.grahamanddoddsville.net/wordpress/File

  5. I'm surprised you don't have the Investment Zoo in there Andrew!? One of the best I've read.

    I need to read a couple of the books above, so thanks for sharing the classics.

    I also enjoy Ian's and/or Duncan's articles. They are always very well done.

  6. Hey Mark,

    I haven't read the Investment Zoo, but I'll check it out.

    I'm an investment book-aholic. I stopped counting after I read 300 of them—and the crazy thing is that I read them over and over, as well.

    So I'm really keen to read the Investment Zoo. Thanks for the recommendation!

  7. I will be interested in what you think of it. Cheers!

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