The ongoing financial turmoil and financial discussion thread

[MoneyGuy]

Originally Posted by Muta

Again, where do you guys do your research? I'd love to start knowing about all this financial stuff but I haven't a clue where to start.

First, decide what kind of investor you want to be. Do you want to be a DIYer? Do you have the time, the interest and the skill to do it yourself? If you don't have the skills, do you have the time and the interest to acquire them? DYI investing can be dangerous. I've seen portfolios blow up this way.

If the above isn't you, then you need to find a good planner to help you.

Your research and info needs are different in each case. If you want to be a DIYer, then others here are better able to help you. If you aren't cut out to be a DYI investor, I can recommend a shelf full of books to get you started, as well as other resources. Let me know if you want some titles.

The books are a good place to start even if you want to DYI.

[ah123]

Originally Posted by MoneyGuy

I can recommend a shelf full of books to get you started, as well as other resources. Let me know if you want some titles.

I know the answer wasn't directed to me, but I wouldn't mind some of these titles...I am not a DIYer, but very keen to learn more so that I can have more intelligent conversations with my planner

[Shazam]

Originally Posted by SeeGeeWhy

One surprising thing to me was the rapid growth of derivatives - nearly $0 before 1980, and just under $600 trillion in 2007, which is nearly 10x the global GDP (the output of the entire planet each year).

There were articles in The Economist years ago talking about this, and how the derivatives system is basically totally unregulated.

Simmons has some poignant commentary on how the halt of the credit system is artificially deflating oil prices as large hedge funds are no longer able to borrow large sums of money to drive up futures contracts.

This is only half true. The stoppage of short selling hit the hedge funds hard, as they SS to make gains during down times. Because of their leveraged exposure, the only way they could make margin was to sell their assets at lower than market value.

If the credit markets recover, oil price will not be far behind...

Maybe. Depends on how much regulation the derivatives market will get.

[Shazam]

Originally Posted by ah123

I know the answer wasn't directed to me, but I wouldn't mind some of these titles...I am not a DIYer, but very keen to learn more so that I can have more intelligent conversations with my planner

Start off with the Moneysense magazine. Read The Economist if you want a bigger picture view of the economy.

I find most "financial planning" books to be utter BS.

I'm sure other people will have more suggestions.

[Slava]

Originally Posted by Shazam

Start off with the Moneysense magazine. Read The Economist if you want a bigger picture view of the economy.

I find most "financial planning" books to be utter BS.

I'm sure other people will have more suggestions.

How come? (I'm actually just curious, not trying to pin you down on anything here...)

[Shazam]

Originally Posted by Slava

How come? (I'm actually just curious, not trying to pin you down on anything here...)

Because many books are written by authors that think they can beat the market.

[MoneyGuy]

Originally Posted by Shazam

Start off with the Moneysense magazine. Read The Economist if you want a bigger picture view of the economy.

I find most "financial planning" books to be utter BS.

I'm sure other people will have more suggestions.

Originally Posted by ah123

I know the answer wasn't directed to me, but I wouldn't mind some of these titles...I am not a DIYer, but very keen to learn more so that I can have more intelligent conversations with my planner

Actually, there are some great financial books dispensing some great ideas and advice. I don't have much time these days but I'll try to post a list. I own about 50 of these books and lend some out to clients. If I don't get around to it, someone might send me a PM to remind me in a few days. I subscribe to Moneysense but don't even put in in my office waiting room because I don't agree with some of the advice. The books also give advice that I disagree with (such as the traditional advice on emergency funds, for example), but there are several that I really like. For anyone who is younger, Kevin Cork's tome, The Money Book, is good. I know Kevin (he lives in Calgary) and his book is very humourous. I could list several other titles but can't do that right now.

How can you say that a book of Buffett's advice is BS?

[Muta]

Originally Posted by MoneyGuy

First, decide what kind of investor you want to be. Do you want to be a DIYer? Do you have the time, the interest and the skill to do it yourself? If you don't have the skills, do you have the time and the interest to acquire them? DYI investing can be dangerous. I've seen portfolios blow up this way.

If the above isn't you, then you need to find a good planner to help you.

Your research and info needs are different in each case. If you want to be a DIYer, then others here are better able to help you. If you aren't cut out to be a DYI investor, I can recommend a shelf full of books to get you started, as well as other resources. Let me know if you want some titles.

The books are a good place to start even if you want to DYI.

I have an IG financial planner, but I haven't really used him in a long time. My plan has been since I stopped consistently using him to furiously pay off my (declining) debt, and then get more serious about investing. That should happen this year.

I guess I would be a hybrid. I know that financial planning isn't my forte, as I do have a planner and I know the world of good they can do (I would recommend a financial planner to anyone that doesn't have one, they turned my rents finances around when they were young too). I want to do some investing, and would normally allow my planner to do it, but I'd like to start learning some of this myself in the hopes that I can go off and do some of my own investing in the future. I have a business degree, but really only took one finance course (sometimes I'm embarassed by this fact). That course taught me about Canadian finance, but not to the level of detail and understanding I can now focus on now that I'm done my schooling. I know what it takes to make a proper budget and to save more than you spend (and that a planner helps in this regard), but now I want to take the more complex next step.

I would love to know the books that you would recommend, Money Guy. Weirdly enough, I'm kind of casually reading a book from the 90's called Rich Dad Poor Dad. Not really about investing and terminology per se, as it is about money management.

[Shazam]

Originally Posted by MoneyGuy

How can you say that a book of Buffett's advice is BS?

Did I say all books are BS? And how can you possibly expect the average investor to follow Buffett's actions, considering that he gets special offerings that the average investor has no hope of getting into?

You can count on one hand the number of people that consistently beat NA equity markets. So there's, what, five authors that are of any use? There's, what, eleventy-billion authors that make books?

If You Want To Be Like Buffett, then there's websites that track his actions.

[SeeGeeWhy]

Originally Posted by MoneyGuy

How can you say that a book of Buffett's advice is BS?

Has Buffett ever actually written a book? His MD&As and year end commentaries are excellent reading, however.

Charlie Munger has published some fantastic stuff, too.

I like reading FP books because they give perspective and varying viewpoints.

My advice to the poster that asked how they can learn more about finance would be to start off learning about basic accounting techniques and how to read financial statements. You can quickly go down the foxhole from there.

[Slava]

Originally Posted by Shazam

Because many books are written by authors that think they can beat the market.

I think that there is a distinct difference here; financial planning is not about beating the market at all. You are reading books about investment strategies and that is only a smaller piece of the pie.

[Slava]

Originally Posted by Muta

I have an IG financial planner, but I haven't really used him in a long time. My plan has been since I stopped consistently using him to furiously pay off my (declining) debt, and then get more serious about investing. That should happen this year.

I guess I would be a hybrid. I know that financial planning isn't my forte, as I do have a planner and I know the world of good they can do (I would recommend a financial planner to anyone that doesn't have one, they turned my rents finances around when they were young too). I want to do some investing, and would normally allow my planner to do it, but I'd like to start learning some of this myself in the hopes that I can go off and do some of my own investing in the future. I have a business degree, but really only took one finance course (sometimes I'm embarassed by this fact). That course taught me about Canadian finance, but not to the level of detail and understanding I can now focus on now that I'm done my schooling. I know what it takes to make a proper budget and to save more than you spend (and that a planner helps in this regard), but now I want to take the more complex next step.

I would love to know the books that you would recommend, Money Guy. Weirdly enough, I'm kind of casually reading a book from the 90's called Rich Dad Poor Dad. Not really about investing and terminology per se, as it is about money management.

If you want to focus on single securities you should start with the "bible": "The Intelligent Investor" by Benjamin Graham. If you select the latest edition it has updated chapters by Jason Zweig with more recent examples of the principles that Graham espouses. Jason Zweig writes for Money magazine and has a very interesting (although maybe not entirely topical book out as well on Neuroeconomics).

In any event, once you do some reading and research of your own, I would be extremely interested to hear/see what you think of the IG Financial Planner.

[MoneyGuy]

Originally Posted by SeeGeeWhy

Has Buffett ever actually written a book? His MD&As and year end commentaries are excellent reading, however.

Charlie Munger has published some fantastic stuff, too.

I like reading FP books because they give perspective and varying viewpoints.

My advice to the poster that asked how they can learn more about finance would be to start off learning about basic accounting techniques and how to read financial statements. You can quickly go down the foxhole from there.

I'm not aware that he's written any himself but he has co-operated with writers who have written about his strategies and musings. The best writing by the Oracle are in his annual reports.

BTW, there has been lots of interest here on TFSAs so I thought I'd mention that the government apparently is going to report TFSA room on notices of assessment like RRSPs. I look forward to seeing those two zeros on both columns.

[macker]

The Snowball is a great read!

[maverickstruth]

Originally Posted by Slava

If you want to focus on single securities you should start with the "bible": "The Intelligent Investor" by Benjamin Graham. If you select the latest edition it has updated chapters by Jason Zweig with more recent examples of the principles that Graham espouses. Jason Zweig writes for Money magazine and has a very interesting (although maybe not entirely topical book out as well on Neuroeconomics).

For those not familiar with the book (who maybe want a bit of an introduction to it before running out to find a copy), here's an ongoing "book-club" style review (link is to first post, you can find the rest by clicking on the "Intelligent Investor" tag at the top of the post). It's a good overview of the book, although of course not a substitute for actually reading it

[pepper24]

The Wealthy Barber is a must read. If you only have time to read one financial book then this is this book. This is from someone who's read a lot of personal finance based books.

[Phanuthier]

I would be interested in seeing MoneyGuys list as well

Mine so far:

Beating the Street - Peter Lynch
The Warren Buffet Way
A random walk down Wall Street - Burton Makiel

My next read is going to be the Intelligent Investor (Ben Graham), and that was before Slava's recommendation too.

[macker]

Looking over at the top shelf of my book shelf I see :
-Freakonomics
-Adverture Capitalist
-Beating the Street
-Buffett : The making of an American Capitalist
-Snowball
-Get Smarter
-Real Money
-3 Robert Kiyosaki books
-When Genius failed
-The world is flat
-Moneyball
-The man who beats the S&P
-Think & Grow Rich
-Jack
-Boomernomics
-The Pig & the Python
-When the Pig goes to market
-Die broke & wealthy
-You can't take it with you
-Automatic millionaire
-The one minute millionaire
-Stock Strategies & Common Sense
-Successful Stock Market Speculation
-The Inteligent Asset Allocator
-The Four Pillars of Investing
-Millionaire next door
-The Canadian Guide to Managed Accounts
-The Richest Man in Babylon
-Tax tips for Canadians
-The Wealthy Barber

Each book gives a different spin on investing but no book can teach you what type of investor you are....

[MoneyGuy]

I'll see about posting the list. I'm busy but will see what I can do. One book I've always liked The Money Coach by Riley Moynes. You DIYers won't like it, but it's great for newbies who want to learn about the basics. I suggest it's a great starter book.

[jtfrogger]

Originally Posted by pepper24

The Wealthy Barber is a must read. If you only have time to read one financial book then this is this book. This is from someone who's read a lot of personal finance based books.

I don't read very much, but when I got my hands on this book, I read it in a day. My first employer gave it to every employee. I was just a coop student, and I borrowed a copy from someone that just came on full time.

This book is what got me interested in personal finance. After reading that book, I did read a few others, and I have read a number of magazines. At the peak, I probably subscribed to about 4 or 5 finance/business magazines.

I have gone through varying paths of investing. Some good, some bad, some ugly. I paid to get the share certificate printed for my Bre-X shares as a reminder of the ugly. It was a greedy move on my part, and lost money on it. But I learnt in doing so, and that lesson has probably paid off financially. Overall, I have done quite well. Whenever I see wealth statistics (MoneySense usually has an article about once a year), I am always in the top cohort for my age group and usually for one or two age groups older too.

Now, I only subscribe to MoneySense. It is my favourite magazine. I disagree with many comments that they have, but I really enjoy the unique stories (e.g. when they profile people and what they do financially).

Although I have read about many different investment strategies and really enjoy learning about the complex ones, I actually go quite simple in practise. I follow a modified Couch Potato portfolio. The modifications are specific to my needs. When I rebalance, I don't actually sell anything, I just add more money and invest in whatever bucket is low.

If I had to choose a different career, I think I would be a financial planner. I've even been tempted to go for certification courses just for the fun of it.

Anyway, I digress quite a bit. I am really just endorsing the book. From personal experience, I believe that it is a great way to start your knowledge of personal finance.