The next book in our Dave Reads series is a classic in the business book category, specifically, investments.
“Number one rule of Wall Street: Nobody - I don't care if you're Warren Buffett or Jimmy Buffett - Nobody knows if the stock's going to go up, down, sideways, or in fucking circles, least of all stockbrokers. It's all a Fugazzi. You know what a Fugazzi is?”
―
This book truly is the definitive book on value investing, the methods by which Warren Buffett claims his investing success. I found many of the recommendations included in this book to be somewhat dated, it was originally written following the great depression of the 1930s. The version I have and read is a more “Modern” revision of the Fourth Revised Edition updated by Graham in 1971-1972; published in 1973. This Revised version was published in 2003 and 2006, again with some material already dated for 2024/2025 when I read the book.
The only parts I really found to be dated were where, when, and how to consult your broker, what to do with paper stock certificates, and where to order financial information from the SEC. All the rest still applies – if you are going to invest in a company, read their financial statements and understand you are owing a piece of this company. Do not just buy the stock hoping to make money on the stock price going up.
The biggest takeaway I have from the book is if you are attempting to choose value stocks (Defined as having an under-valued stock price for their financial strength), choose wisely and research thoroughly. Read the financial statements and if this proves to be too much work, invest in an S&P 500 or similar stock fund.
I have a TON of other notes on this book and more dog-eared pages than most of my books, so ask me anything! Let’s get a conversation going in the comments.
Stay tuned for the next Dave Reads post where I will be putting down my thoughts on another great, somewhat-related, book; Poor Charlie’s Almanack: The Essential Wit and Wisdom of Charles T. Munger