I’m 18 years old and want to learn how to invest my money. How do I get started?

Answer by Cinjon Resnick:

I was in a similar position once. Here's what I did:

Read The Intelligent Investor by Graham. This is your go to and will give you a good frame for how to think about investing (like an owner) and how to think about the markets. Graham is considered the grandfather of value investing and was Buffett's direct teacher. Try to get the one with the Zweig commentary because it updates it for today's environment.

Then read Margin of Safety by Klarman, who has done incredibly well leading the Baupost fund since the late 80s. It expounds mostly the same ideas because Klarman follows Graham's teachings but also has his own touch that is quite different from anyone else. It's very hard to reverse engineer Klarman's plays. This book is also great because of its near current examples (early 90s).

Then one more book and that's You Can Be A Stock Market Genius by Greenblatt. Terrible name but great book because of all of the special situations (these aren't unique, but are a way of identifying specific investment plays like spin-offs or mergers) it details and how to take advantage of them / what to look for.

Ok, that's three books which should take ~2-3 months. After that, start investing in things you know and understand. If you don't understand anything, then start researching.
But while doing it, the best education you can get is to be reading the Buffett Partnership Letters and then the Berkshire Hathaway Annual Letters. These span 40+ years and are a goldmine of investing and business education. I strongly encourage this last step, especially for people new to investing and those without the time to focus on anything but their industry of choice.

View Answer on Quora


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s