Getting Started as an Investor

Currently I am reading two books (recently finished a third), which I highly recommend for the student seeking a philosophy for investing. The old adage to find out who the best is in a particular field and then study him/her is, I believe, a great way to approach investing. This last year, I have started in earnest to study the best stock investor. Who else, but Warren Buffet. Now, I know there are a lot of Buffet-lovers out there. I don’t pretend to be the source on Buffet, but nonetheless, I find it interesting to read and study about him and his investment philosophy.

I figure that a good way to learn how to invest like Warren Buffet is to learn who influenced him and what he studied. So, who did influence him? Who did Warren pattern his skills and mindset from?

The answer is from Warren’s own mouth. About 6-7 years ago, as part of a Weber State University business school trip, I attended an RC Willey open house in Las Vegas. Mr. Buffet attended, and as part of the open house festivities, he hosted a student question-answer session. He said then that there were really only two investment books an enterprising investor would need. Both the books (or rather, the authors) are what have influenced his way of thinking about investing over the last 50 years.

These two books and authors are The Intelligent Investor, by Benjamin Graham, and Common Stocks and Uncommon Profits, by Philip A. Fisher. Mr. Buffet said that Graham’s teachings make up about 85% of his own investing philosophy, with Fisher’s ideas rounding out the other 15%.

During the student question and answer session, Mr. Buffet also said that he had read Security Analysis numerous times in the 1950s. Security Analysis is a co-authored book by Benjamin Graham and David L. Dodd. It essentially is the textbook version of The Intelligent Investor.

I have added these three books to my personal investment book library. The Intelligent Investor, Security Analysis, and Common Stocks and Uncommon Profits are books that serve as a foundation that you can compare other investment ideas and books against. If you are interested in learning to invest, I recommend you start with these three books.

Bryce Hansen, CPA