The Poor Investor

Investigatory Value Investing

About

This blog has been created to help the individual investor.  It explores the philosophies and strategies of investing greats, business and investing fundamentals, investor psychology, market history, and other topics.  If there is any topic you would like me to blog about please email it to me.  While this blog is heavily biased towards value investing, there is a clear cut reason for that bias.  Value investing has been proven to work (not convinced? please read).

My Philosophy:

My belief is that individual stock investing is not for everyone.  Successful stock investing takes a lot of discipline.  As Warren Buffett once said, “Success in investing doesn’t correlate with I.Q. once you’re above the level of 125. Once you have ordinary intelligence, what you need is the temperament to control the urges that get other people into trouble in investing.”  If you don’t, at a minimum, have the ability to control your emotions in stressful situations, you should not invest your own money in individual companies.  For these types of individuals I urge index investing or other passive investing methods (such as O’Shaughnessy’s strategies).  For the rest, I don’t think there is a one-size-fits-all solution.  Some might be successful by exactly copying another investor’s investment strategy, while others may copy another’s strategy and put a slight twist on it, and still others may need to develop their own unique strategy and investing philosophy in order to be successful.  Through this site and its resources, my goal is to help the individual investor figure out what works best for him or her.

However, whether you decide on active or passive money management, I do believe investors should manage their own money because of what I like to call “The Paradox of Professional Money Management,” exemplified by this quote:

“As a group, professional money managers control more than 90 percent of the U.S. stock market. By definition, the money they invest yields returns equal to those of the market as a whole, minus whatever fees investors pay them for their services. This simple math, you might think, would lead investors to pay professional money managers less and less. Instead, they pay them more and more. Twenty-five years ago, the most successful among them took home a few million dollars a year; in 2006, more than 100 money managers made more than $100 million, and a handful made more than $1 billion. A vast industry of stockbrokers, financial planners, and investment advisers skims a fortune for themselves off the top in exchange for passing their clients’ money on to people who, as a group, cannot possibly outperform the market.”  -Michael Lewis

 

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