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Modern Security Analysis - Martin Whitman Worth?


InspireByReason
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I'm getting to the end of the trail with highly respected value investing books and now i'm starting to look on the periphery for books that can help with more of the trench digging aspects of investing. Has anyone checked out any of Whitman's material like distress investing or modern security analysis? What are your thoughts on them? Were they helpful?

 

 

Cheers  :)

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If you enjoy reading books where sentences are randomly abbreviated into acronyms then you'll love the writing; IDLWLT (I don't like writing like that), so it never clicked with me and  since IDLWLT I had trouble finding value in the books (VLB), but I've found VLB in other books, so all was not lost.  Oh wait, did my sentence just run on forever?  Marty's do as well..

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If you enjoy reading books where sentences are randomly abbreviated into acronyms then you'll love the writing; IDLWLT (I don't like writing like that), so it never clicked with me and  since IDLWLT I had trouble finding value in the books (VLB), but I've found VLB in other books, so all was not lost.  Oh wait, did my sentence just run on forever?  Marty's do as well..

 

Haha I appreciate the humor. I know that you're interested in the kind of investing I'm trying to learn more about. I would appreciate any books suggestions that would scratch this... "Modern Security Analysis/Distress investing" itch. Hopefully help some future wanderers who consider going down this dizzying path too lol. Nailing down the good material in investing is a skill in of itself I believe.

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If you enjoy reading books where sentences are randomly abbreviated into acronyms then you'll love the writing; IDLWLT (I don't like writing like that), so it never clicked with me and  since IDLWLT I had trouble finding value in the books (VLB), but I've found VLB in other books, so all was not lost.  Oh wait, did my sentence just run on forever?  Marty's do as well..

 

Haha I appreciate the humor. I know that you're interested in the kind of investing I'm trying to learn more about. I would appreciate any books suggestions that would scratch this... "Modern Security Analysis/Distress investing" itch. Hopefully help some future wanderers who consider going down this dizzying path too lol. Nailing down the good material in investing is a skill in of itself I believe.

 

I pushed through to read the Aggressive Conservative Investor.  I remember getting to the end and thinking "I've turned all of these pages, but I can't remember what I've read."

 

Here's my $.02, read Security Analysis, the 1941 edition if you're into asset investing.  Each edition is different, dramatically different.  From 1941 to 1951 the book changed a lot, and by 1962 it was almost a different book.  In 1962 Graham spends time talking about EBITDA, cash flow, and buying the best name in each industry when the market crashes.  He also spills ink for chapters discussing how to forecast what level the market "should" be at with a fascinating formula that combines inflation and GDP growth.

 

Check out: The Art of Profitability

 

 

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FWIW I've read quite a lot of books on investing but after you've read like three of four the upside of reading even more of them is marginal (it still is enjoyable though). Very quickly you reach a point where getting your hands dirty is far more valuable: i.e. dig down in annual reports and try to understand/model/valuate a company. If you don't understand something, google it or ask for help. You don't become a good soccer player / programmer / pianist by reading all the best books out there. Same for investing - you need deliberate practice. That said, here are a couple of books I liked best:

 

Security analysis: the classic on value investing.

Reminiscences of a stock operator: first of all a very enjoyable read. Second of all it gives a great insight in the psychology of the market and its participants.

You can be a stock market genius: title is way too catchy but actually a good book. Lots of examples on how to identify and evaluate potentially interesting situations.

Quality of earnings: good book on how to spot 'dubious' accounting.

 

I wasn't particularly impressed by the Whitman book.

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Reminiscences of a stock operator: first of all a very enjoyable read. Second of all it gives a great insight in the psychology of the market and its participants.

 

I know that a lot of people recommend this book, but for me it felt dated and really very superficial. I did not finish it and don't plan to. IMO not worth the time.

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Meta advice: for me personally, opinions of others have rather low correlation with my opinion (for books, stocks, movies, music, etc.). So pretty much try it and if you like it, continue; if you don't, move on. Yeah, unfortunately this wastes some time... but I haven't found a reliable alternative.

 

I should +1 this though:

 

FWIW I've read quite a lot of books on investing but after you've read like three of four the upside of reading even more of them is marginal (it still is enjoyable though). Very quickly you reach a point where getting your hands dirty is far more valuable.

 

 

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I will second the rec for Art of Profitability. 

 

If you've gone through the Value Investing classics I would recommend picking up books on businesses.  The Everything Store is one of the best in recent years, and Made in America is one of the classics.  Haven't read it but Shoe Dog is getting rave reviews.  There's so much to read here.

 

I would also highly recommend Clayton Christensen's The Innovator's Dilemma. "Disruption" is such an overused term because this book is brilliant, but the concept is terribly misunderstood and misapplied and I suggest everyone read the original.

 

Some of the short selling/accounting books are good even if you are not shorting:  Quality of Earnings, Art of Short Selling, Financial Shenanigans, Dead Companies Walking.

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I'm also a recent victim of Whitman, The aggressive conservative investor was more painful than straight academic accounting text books.

 

One book not mentioned is Howard Marks The most important thing illuminated. Also, I really enjoy bio/autobiographies of anyone who had tremendous success with equities. Bernard Baruch, Morgan, Carnegie, etc. I find that understanding what the actors thought/felt at different points in history about the market is demystifying and if you read enough about the history of the market you start to piece together what many of the relevant actors were thinking feeling at different times in market history.

 

 

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