Double Journey

I’m trying to get back into the swing of reading. Of course, I naturally gravitate toward financial investment books.  As I’ve posted before in my blog about the best investment books to read, the best books are those you will actually pick up and finish.  I’ve been hard for time lately, so I decided to pick up another book in “The Little Book” series.

This time, I picked up The Little Book That Builds Wealth by Pat Dorsey.   You will notice that this is the same Pat Dorsey who wrote another one of my recommendations, The Five Rules for Successful Stock Investing.  I like his style of writing, even though some might find it dry.  I find it to be easily understandable for even the average person with little investing background.

The book focuses on the concepts of economic moats.   It is a concept used heavily by the likes of Warren Buffet as well as the company Pat Dorsey works for, Morningstar.  The idea is simple.  Those companies that have sustainable and strong competitive advantages, will in the end be worth more money than those that don’t have such advantages.  Despite the rather simple concept, the book does spend some time trying to convince the reader why the concept is important.  It actually is something that needs to be explained, because it is a rule often ignored by so many (myself included).

For me personally, the most useful thing was not how to think about companies that I am looking to invest in.  It was most useful to me as a way to think about my own company.  It got be thinking about the industry I am in as well as my company’s position in it.  The book made me think about ways I can help my company create a lasting economic moat or if it was a waste of time to even try given my industry’s dynamic.  I actually recommend it highly to anyone who has major influence in a company and is looking to jump start ideas on how to create strong competitive advantages.

So overall I recommend the book.  Probably because it fits in so nicely with my own investment style.  Just take a look at my Shopping List (which I know needs to be slightly updated) .  Almost every single one of those picks are a wide moat company.  All of them were picked before I ever read this book.    Great minds just think alike.
Sphere: Related Content

I took a self-assessment at work the other day.  It was based on a book called Stregthsfinder 2.0.  The theory behind this book is that we often focus too much on our weaknesses.  The way we try to improve and get ahead is by working on your weaknesses until the are no longer your weakness rather than focusing on what we are good at and using that to our advantage and getting ahead.  It is a philosophy that I actually share and so I was interested to see what it would say are my strengths.

If you buy the book, you can take an online test to determine what your strengths are.  They ask you a lot of questions, and you are supposed to say whether you agree with one more than the other.  It was somewhat difficult because a lot of the comparisons were relatively close in meaning, but you had to try and pick one.  After taking the test, you are given five strengths.  These strengths are supposed to describe what you are good at and what you are interested in, and gives you a course of action to utilize this information in you work.  My results are as follows.

• Strategic - People who are especially talented in the Strategic theme create alternative ways to proceed. Faced with any given scenario, they can quickly spot the relevant patterns and issues.
• Significance - People who are especially talented in the Significance theme want to be very important in the eyes of others. They are independent and want to be recognized.
• Competition - People who are especially talented in the Competition theme measure their progress against the
  performance of others. They strive to win first place and revel in contests.
• Individualization - People who are especially talented in the Individualization theme are intrigued with the unique qualities of each person. They have a gift for figuring out how people who are different can work together productively.
• Futuristic  - People who are especially talented in the Futuristic theme are inspired by the future and what could be. They inspire others with their visions of the future.

For the most part, I agree with the results. I actually don’t think I’m as competitive as I used to be, I had to win at EVERYTHING growing up, but it is still definitely part of my personality. But overall, it is pretty good. It does tell me that I’m probably in almost the right job, but not quite the perfect job.  My job, right now, tends to be a lot more tactical in nature and present focused rather than on the future.

So for those of you who know me, how close do you think this is?  Is it an accurate description of the type of strengths I exhibit?
Sphere: Related Content

I’ve often been asked what are the best investment books for someone to read if they are just starting out. I’ve read a lot of books on the topic and I’m happy to share my opinion on what the best books are for someone just starting out.

One Up On Wall Street- If there is one book the average investor should read about buying individual stocks, this is probably it. It is very well written and offers very pragmatic advice on how tho think about individual stocks.  It is written by Peter Lynch who became famous running Fidelity’s Magellan fund and it is written to show how an ordinary person has some rather large advantages over the boys in Wall Street.

Robert Hagstrom’s The Warren Buffett Way -Readers of my blog know how much I admire Buffet. I believe his technique (despite what I may espouse on this website) is the way to go. Buy well run companies that are easy to understand and that are attractively priced. Buffet himself has never written a book, but Hagstrom clearly outlines what Buffet has done to make himself one of the wealthiest men on the planet.

Pat Dorsey’s The Five Rules for Successful Stock Investing - This is a really great book to teach you the basics of how to evaluate a company and what the important metrics are.  I also like the fact that it has in its appendix how to evaluate companies in different sectors.  Evaluating a bank is much different than evaluating a tech company, and this book shows you the basics so you can get started.

Joel Greenblatt’s The Little Book That Beats the Market-  The best book is the book that you read and you finish.  That’s why I put this book on the list.  It’s very short and a very quick read.  The advice is actually half way decent, but more importantly it is simple to follow.  He even has a website that does all the work for you.  The thing I like about it most is that it should make it really simple for you to invest, and the most important thing when it comes to investing is to just start.

There are a lot more books I suggest you read, but this should give you an excellent starting point.  Like I said, start with the basics and then go from there.

Sphere: Related Content