Being an Average Joe, Learning Investing, and a few Maxims
Occasionally, it is useful to sit back and read some of the prior posts that one has published. I can be rightfully accused of using a lot of buzzwords and financial lingo that may not be broadly understood.
My goal is to create a blog that is useful and relevant to a broad spectrum of people, not just the value geeks or those who are financially adept. Sometimes, I throw out terms like operating margin, free cash flow, return on invested capital, etc without providing any support for those unfamiliar with these words.
There are a number of places for you to clarify these terms.
I found a new blog, "The Average Joe Investor" that is providing a basic run through understanding financial statements. "Joe" does a great job in easing investors who want to gain greater understanding of financial statements through this kind of information. So far, he has reviewed both the income statement and the balance sheet in his back to the basics approach.
I would be remiss not to mention my friend Geoff Gannon who continues to have one of the best organized financial blogs out there, Gannon on Investing. Using everything from regular postings to podcasts to surveys to newsletters, Geoff goes out of his way to make investing better understood by investors. He has also provided a very useful glossary, the "Value Investing Encyclopedia" to guide you through some of these terms.
My friend Bill at Nodoodahs.com has a wonderful post this morning about the index effect with numerous links and references to some great information. Bill, who blends some great contrarianism with his fundamental and technical analysis (and some political economics) is highly readable, entertaining, and provides us all some terrific insight and education. In light of Googles admission to the S&P 500 index, I think you will find his post very useful. For veteran readers of this blog, please note that Bill has moved to the Wall Street 2.0 community and you should update your link.
Finally, "Not a Lemming" at"Mr. Market-Musings of a Value Investor" has published some of Bruce Berkowitz' (of Fairholme Funds fame.) I think you will find these maxims very entertaining and useful. The most important, I believe is the last one:
Zeroes don't grow (don't lose)
Above all else, Benjamin Graham had it right. Minimizing the risk of permanent loss of capital is what all of us mentioned here share.