Book on buying stocks

[Antarctica32]

Ok, well I found this book in my basement, How to buy stocks by Louis Engel:
http://www.amazon.com/How-Buy-Stocks-Louis-Engel/dp/0553225693
but the thing is, it's the 1981 edition. It seems like an interesting book, but I'm only 13 and I don't know how much the stock market has changed over time. Would the book's concepts still be valid in 2011? If I read it will it pollute my mind with false knowledge?

[HermanAB]

Well, in a down market (which is now), you can buy anything and it will eventually go up...

Most stock market books are total BS. You should first learn something about statistics and maybe read "A random walk down Wall Street" instead.

In general, it is probably wise to buy stock in the companies you use (who's products you buy), since you know how they are doing and they must be doing something right, else you won't be using them.

[linuxforartists]

My favorite books on stock investing are:

The Essays of Warren Buffett (http://www.amazon.com/Essays-Warren-Buffett-Lessons-Corporate/dp/0966446127/ref=sr_1_1?s=books&ie=UTF8&qid=1312532385&sr=1-1) by Warren Buffett and Lawrence Cunningham - many books have been written of the world's greatest investor, but reading his own words is way better.

One Up on Wall Street (http://www.amazon.com/One-Up-Wall-Street-Already/dp/0743200403/ref=sr_1_1?s=books&ie=UTF8&qid=1312532322&sr=1-1) by Peter Lynch - this will teach you how to use your advantages as a small investor to beat the professionals.

The Number (http://www.amazon.com/Number-Quarterly-Earnings-Corrupted-Corporate/dp/0812966252/ref=sr_1_1?s=books&ie=UTF8&qid=1312532298&sr=1-1) by Alex Berenson - this book will make you think the whole stock market is rigged and corrupt. A good counterpoint to the other books.

That being said, I think the best investment you can make is to invest in yourself. For example, I've studied web design, and it's so cool that I can't imagine not being able to build websites.

Figure out how you can apply your passions and skills to solving people's problems, and try to improve yourself in that direction. This may result in you doing volunteer work, starting a business, or taking up further training. Learning more so that you're empowered to do more things, that you're able to build solutions, that's something you'll never regret.

[HermanAB]

Well, the market just dropped another 10%. So now is the time to buy blue chips like IBM, GE, Exxon-Mobil, Apple and a few others. Blue chips are the stocks that you never sell - you buy them for your old age and collect the dividends. Once in a while when the market crashes, you buy some more.

However, buying common stocks without a selling strategy doesn't help, since you will just end up riding them up and down. An age old strategy is to buy in March and sell in September - and repeat every year. If the market crashes in October, then you can buy in November and sell in February, then buy again in March and sell in September. The trick is to cash out regularly and then consider your options again when the time comes to buy.

Another thing to bear in mind is that when all the stock brokers are screaming buy, buy, buy, it means that you should sell and when they scream sell, sell, sell, you should buy - because, that is what they are doing! You got to do what they are doing, not what they want all the suckers to do.

[oldos2er]

The fundamentals of investing stay mostly the same. Give 'The Intelligent Investor' by Ben Graham a try; also Gibson's 'Asset Allocation.' To understand investing psychology there is the classic 'Extraordinary Popular Delusions and the Madness of Crowds' by Mackay.

[jmszr]

Antarctica32,

This is a good basic online learning resource: http://www.investopedia.com/university/stocks/.

From: The Simple Dollar

[era86]

The fundamentals of investing stay mostly the same. Give 'The Intelligent Investor' by Ben Graham a try; also Gibson's 'Asset Allocation.' To understand investing psychology there is the classic 'Extraordinary Popular Delusions and the Madness of Crowds' by Mackay.

+1 on "The Intelligent Investor" by Ben Graham (Warren Buffet's teacher and mentor). Provides the basic fundamentals of 'value investing', but it's kind of a steep read...

If you want a basic overview of how the market works, check out "The Neatest Little Guide to Stock Market Investing" by Jason Kelly. It is an inexpensive, short read that covers the very basics.

I've also read "How to Make Money in Stocks" by Will O'Neill which focuses more on using technical analysis techniques. This is stuff the traders use more so than the investors.

The stock market can make you seasick, so be ready to come aboard! :popcorn:

[JDShu]

+1 to Random Walk down Wall Street