Esino Essentials

Investing Guidelines

I became interested in stocks when I was about 10 when my grandfather told me he owned 3 stocks, 2 of which he had bought during the Depression and the third being a spinoff of one of the others.  The 2 he had bought were Commonwealth Edison, the Chicago electric company, and Anaconda Copper.  Commonwealth Edison has changed names and Anaconda was bought by Atlantic Richfield in the 70's.

I watched stocks but had no one to guide me.  There are a lot of books about investing but many of them are contradictory.  I got lucky in the mid 70's by buying small amounts of  LaQuinta Motor Inns, Southwest Airlines, and Luby's Cafeterias, all based upon their having good products.  I was unable to sustain this record later.  I did read the Economist in the college library and in the 80's subscribed to it.  They repeatedly made references to a number of classic works, the foremost being Security Analysis by Benjamin Graham.  This is a college textbook for sophomores and is an easy read.  I bought it in the early 90's and spent 6 months reading the first 2/3 of it while waiting for soccer games to start.  This gives an excellent grounding in fundamental as opposed to technical analysis*.  Warren Buffett of Berkshire Hathaway went to work for Graham for free to learn his techniques.  Read this first.  You can buy good used copies of it on half.ebay.com for about $30.

Andrew Tobias has a number of good books which are really collections of newspaper and magazine articles he has written.  He is financially very conservative and a great writer with a lot of humor.

The Wall Street Journal is essential for staying abreast of the markets.  The online edition has everything the print edition has except the ads.  It also costs less and is available with any internet access.