Value Blogs are better teachers than Value Textbooks
The truth is that from value textbooks, you can learn a lot. The investment books I found most important as I learned value investing are:(in order of importance)
The Essays of Warren Buffett: Lessons for Corporate America
The Most Important Thing by Howard Marks
Value Investing: From Graham to Buffett and Beyond
You can be a Stock Market Genius by Joel Greenblatt
Security Analysis and The Intelligent Investor
The Warren Buffett Way
Even now I’m reading Hidden Champions of the 21st Century and The Art of Short Selling in my attempt to grab all the knowledge I can get my hands on.
However, no matter how much I read in these books, there is a practical element to investing that you cannot get from simply reading. The best way to learn investing at a practical level? Value Investing Blogs.
Take for example Oddball Stocks. Recently there have been a few more investment process articles than usual, but if you look at the investment analysis posts, the author has only been long 1 of the stocks he posted in the last 7 purely stock analysis posts. More importantly, at the beginning of the other 6 articles, each stock looked like it could be a great buy. Then the author went into the risks that convinced him not to buy, and you get a fantastic practical lesson on how deep investment research should go and how to form opinions on investment risk.
The same is true for WhopperInvestments. Take this recent post. 4 paragraphs in and the rookie version of me is looking to buy the stock because it’s so cheap. It’s like reading an analyst report with the target price higher than the current price and thinking BUYBUYBUY. However, the key difference with the value bloggers is that they’re smart and they look at the risks far more intelligently. They’re not looking to sell you their stocks, so they do what Whopper did, which is to spend the next half of the post directly addressing why he chose NOT to buy a position. This teaches you a few lessons. First of all, it teaches you to be more cynical and suspicious. By presenting the bull case first and completely tearing it apart later, you always feel like you’ve been duped, which is an important lesson because if you can tear apart the bull case before you buy the stock in the first place, you’ll save yourself a lot of money. Second, it teaches you in depth real-time fundamental analysis on stocks of which you’ve never heard. There is a lot to learn from these blogs, and many of the lessons go beyond where any value books could go.