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Did that sound contradictory, or flattering, or both? I mean it as both, and I'll tell you why, with some helpful suggestions.
A few inquisitive readers (investing does that to you, doesn't it?) have asked if I write these newsletters off the cuff. I don’t, but would you like to know where they come from.
Only one source — and anyone can tap it just as easily as I do.
It is so simple that you may find it hard to believe when I tell you. Here it is…
Study.
Yes, the only reason I can give you these newsletters is the same reason you're reading them. I study. And I steal.
I'm not that talented or intuitively brilliant. I have a library of books and thousands of articles — good and bad — that I add to constantly.
Because you're reading this, I know you study too, which is why I put you in that small, distinguished minority — the intelligently lazy.
Why I became lazy
Let me tell you how I came to join this lazy minority we both belong to.
When I started investing I was amazed to see that most people relied on flair, luck, what was going up, intuition, what they liked, hot tips — anything except a study of what worked and what didn't.
"What an unbelievable opportunity" I said to myself. "I've found a business where people are too stupid or idle to study. How can I fail?"
But what's even more amazing is that today, decades later, nothing has changed. It's probably even worse!
I must have asked thousands of people at conferences and seminars what investing books they've read and what outstanding investors they follow, and the overwhelming majority have read very little and do not follow anybody.
I'm just staggered.
Not because they're lazy. Most of them are diligently working away, maybe even harder than I do. But all too often on things that are a complete waste of time.
Fads and fashions instead of knowledge
They spend far too much time on the urgent, rather than the important; on the latest fashionable investment fad as a substitute for fundamental knowledge.
The truth is that you and I are the clever ones because we are lazy — which is the contradiction I mentioned.
Isn't it sheer madness to spend backbreaking years learning as you go along, like these amateurs do? It is very hard work, and highly likely to be unprofitable.
To sum up, there is one stark, simple difference between the winners and losers in investing and you can pin it on just one thing.
Knowing more. And applying that knowledge.
You can easily pick up what you need in a few weekends from people who've invested lifetimes and billions learning what you need to know.
That is being smart, professional and intelligently lazy.
And it's why I recommend the reading list below. I'm sure you've read some of those books, but not all.
Recommended Reading List
Books
- Value Investing Made Easy: Benjamin Graham's Classic Investment Strategy Explained for Everyone by Janet Lowe
- The Little Book of Value Investing by Christopher H. Browne
- The Little Book That Still Beats the Market by Joel Greenblatt
- You Can Be a Stock Market Genius: Uncover the Secret Hiding Places of Stock Market Profits by Joel Greenblatt
- The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition) by Benjamin Graham
- Contrarian Investment Strategies - The Next Generation by David Dreman
- The Dhandho Investor: The Low - Risk Value Method to High Returns by Mohnish Pabrai
- One Up on Wall Street: How to Use What You Already Know To Make Money in the Market by Peter Lynch and John Rothchild
- The Essays of Warren Buffett: Lessons for Corporate America, Second Edition by Warren E. Buffett and Lawrence A. Cunningham
- More Than You Know: Finding Financial Wisdom in Unconventional Places by Mr. Michael J. Mauboussin
Internet resources and articles
Columbia Business School Walter Schloss Archives — A wonderful source of information on a lot of the successful value investors as well as worthwhile articles.
Columbia Walter Schloss Public article archive — Be sure to click on the heading "Class Recordings" to see video recordings of the outstanding investor guest lectures.
Tweedy, Browne Company LLC
Tweedy is probably the oldest fund management company that practices value investing. They have a lot of good papers and speeches on their website.
Tweedy, Brown Papers and Speeches — The paper "What Has Worked in Investing" is especially worth reading.
Davis Funds
Davis Funds is a successful third-generation fund management company. A good article called “The Wisdom of Great Investors” is a worthwhile read.
Daniel Kahneman
Daniel Kahneman is a psychologist and the co-creator of behavioral economics. In 2002 he along with his late collaborator Amos Tversky won the Nobel Prize in economics.
This is a worthwhile summary of his experiences and research: A Short Course in Thinking About Thinking
GMO (Free registration may be required.)
GMO was founded in 1977 and is a privately held global institutional asset manager. One of the founders, Jeremy Grantham, writes an excellent quarterly letter. Look out for it about three weeks after quarter end.
To your “lazy” investment success
Tim du Toit
P. S. I am so short of shelf space I am thinking of getting a Kindle electronic book reader from Amazon, but that is another story.
I used to keep all the articles in files but I ran out of space, so now I file them electronically, printing them out using the free PDFCreator program.
And I make them easy to find using this extremely helpful free program called Copernic Desktop Search.
It’s a huge improvement over paper.
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