It’s been while that i have started following up Gautam on twitter. On further investigation, I found his interview published at gurufocus portal. Copying the section where he mentions about stock investment as multi-disciplinary activity with collection of books for each category.
(Copyright due to gurufocus – details interview can be found here – https://www.gurufocus.com/news/495551/19-questions-with-gautam-baid-portfolio-manager-global-equities
What are the key attributes of a great investor?
Michael Mauboussin authored a brilliant paper on this very topic in August 2016 titled “Thirty Years: Reflections on the 10 Attributes of Great Investors.” Let me outline them below along with my favorite book(s) on each topic for the benefit of all the readers.
- Be numerate (and understand accounting) – “How to Read a Financial Report” by John Tracy, “Accounting for Value” by Stephen Penman, “Financial Shenanigans” by Howard Schilit, “Quality of Earnings” by Thornton L. O’Glove, “The End of Accounting” by Baruch Lev.
- Understand value (the present value of free cash flow) – “Creating Shareholder Value” by Alfred Rappaport, “Valuation: Measuring and Managing the Value of Companies” by Tim Koller, David Wessels and Marc Goedhart for McKinsey & Co.
- Properly assess strategy (or how a business makes money) – “Business Model Generation” by Alexander Osterwalder and Yves Pigneur.
- Compare effectively (expectations versus fundamentals) – “Expectations Investing” by Alfred Rappaport and Michael Mauboussin.
- Think probabilistically (there are few sure things) – “The Drunkard’s Walk” by Leonard Mlodinow, “Innumeracy” by John Allen Paulos.
- Update your views effectively (beliefs are hypotheses to be tested, not treasures to be protected) – “Stalking the Black Swan” by Kenneth Posner, “A Few Lessons From Sherlock Holmes” by Peter Bevelin.
- Beware of behavioral biases (minimizing constraints to good thinking) – “Thinking Fast and Slow” by Daniel Kahnemann, “The Art of Thinking Clearly” by Rolf Dobelli, “Your Money and Your Brain” by Jason Zweig, “Why Smart People Make Big Money Mistakes” by Gary Belsky and Thomas Gilovich.
- Know the difference between information and influence – “The Crowd” by Gustave Le Bon, “The Art of Contrary Thinking” by Humphrey Neill, “Influence” by Robert Cialdini (the chapter on “Social Proof”), “Madness of Crowds” by Charles Mackay, “A Short History of Financial Euphoria” by John Galbraith.
- Position sizing (maximizing the payoff from edge) – “The Warren Buffett Portfolio” by Robert Hagstrom, “Fortune’s Formula” by William Poundstone.
- Read (and keep an open mind).
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5. What are the best books on investing?
Investing is multidisciplinary in nature as showcased in Robert Hagstrom’s book “Investing: The Last Liberal Art.” Some great books to develop knowledge and wisdom are “The Intelligent Investor” by Benjamin Graham, “The Essays of Buffett” by Laurence Cunningham, “Common Stocks and Uncommon Profits” by Phil Fisher, “Where Are The Customers’ Yachts?” by Fred Schwed, “A Random Walk Down Wall Street” by Burton Malkiel, “One Up on Wall Street” by Peter Lynch, “The Most Important Thing” by Howard Marks (Trades, Portfolio), “Reminiscences of a Stock Operator” by Edwin Lefevre, “Against The Gods” by Peter Bernstein, “More Than You Know” by Michael Mauboussin, “Influence” by Robert Cialdini, “Seeking Wisdom” by Peter Bevelin, “Your Money and Your Brain” by Jason Zweig, “Thinking Fast And Slow” by Daniel Kahnemann and “The Fifth Discipline” by Peter Senge. One also should be an avid student of financial history and crowd psychology and read the classics by Charles Mackay, Gustave Le Bon, John Galbraith and Edward Chancellor.
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18. What are the best web sites to follow for value investing-oriented investment ideas?
Morningstar, Value Line, Microcap Club and The Manual Of Ideas are some very good resources.
wethypeople 