Tuesday, March 28, 2006

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.


At 12:50 PM, Blogger Steven said...

As a new investor I could not agree more. Your site, and the one's you mention, provide a good background of material to form a base of knowledge on all types of investing. I would also add in Shai at grahamianvalue. ALthough he is no longer posting new stuff, I bleive the site still exists as a repository of invormation on all things Graham et. al.


At 12:53 PM, Blogger Steven said...

I could not agree more. As a new investor the websites you mentioned, including your own, provide a knowledge base for new investors too build off of over all ranges of investing. I would also add Shai at grahamianvalue. While no longer active the site still serves to provide a repository of informaiotn on all things Graham.


At 11:26 PM, Blogger Average Joe said...

Hey, thanks for the press! I really appreciate your site and the ones like it and just hope that I can add a little something to the mix. The curve is steep for learning about investing, but it's definitely climbable and worth the effort.



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