Nary a stomach did not flutter as 36 Billion dollars of top-notch, blue-chip market cap bling descended from its former glory, like the drop in the Cyclone roller coaster at Coney Island, to plumb the depths of despair not seen in a decade, first falling to 15 Billion and then punching through to 14 after the briefest of pauses.
Its exploding dividend yield did nothing to assuage the panic as sellers outnumbered buyers in ever-increasing numbers and the uncertainty of its risk exposure only served to magnify the sell-off.
Meanwhile, in another not too distant nation, a 22 Billion dollar market cap behemoth, which in a different time stood out as the bluest of the blue chips, declined to 10 Billion during that same period.
“Crisis on Wall Street as Lehman Totters, Merrill is Sold, AIG Seeks to Raise Cash,” read the front page headline in the Wall Street Journal back in September 2008. “Mounting Fears Shake World Markets as Banking Giants Rush to Raise Capital,” screamed another.
“Be scared when others are greedy, be greedy when others are scared,” said Warren Buffett, the Oracle of Omaha, so many years ago. And there was no doubt; the “others” were scared out of their wits.
Two companies. Two stocks that at one time or another called themselves, “blue chip.” Both plummeting. But that’s where the similarities ended. The first, Canadian banking giant CIBC, recovered quickly, rising 56 percent over the next 4 months, while the second, GM, continued to fall, losing another 50 percent in the following 3 months and facing the ignominy of being delisted from the NYSE and booted from both the Dow and S&P 500.
Not all stocks that fall are good buys just as not all stocks that fall are bad buys. Some fall for a reason, like GM with its bloated bureaucracy, unsustainable debts and poor business model. Others fall because of emotion, like CIBC – caught up in a herd of people fleeing from all things banking, whether the banks in question were solid and well capitalized or not.
Investors that were positively salivating as they watched CIBC go on sale were richly rewarded in just a few months. The suckers that jumped on GM, thinking there was no way the price could fall any further, lost 50 percent of their money over the subsequent 3 months.
To be sure, the line between investor and sucker is a mighty thin one. At least for the unknowledgeable among us. For those who know how to read a company’s financial statements and correctly interpret the results, great riches lie ahead. For the other group, constant frustration and consistently losing money in the stock market await.
Never before has the ability to invest successfully been so important. More people today have access to stocks and mutual funds than at any other time in history, yet the majority invest significant sums of their hard-earned dollars knowing less about the companies in which they’ve invested than they know about their favorite sports team.
But unless you plan to build your nest egg betting on sports teams, it’s probably better to know more about where your money is invested.
Of course you can spend a lifetime trying to figure out where to learn about the best investment methods. There are literally tens of thousands of books and courses out there each purporting to be the best. Some appeal to your greed glands by promising you millions of dollars by this time next year.
It’s no wonder most people don’t know where to start.
So with that in mind, I’m about to give you what I believe is the best education you can receive on how to invest in the stock market.
I’ve done most of the heavy lifting for you because I’ve read thousands of books, articles and magazines on investing. I’ve tested hundreds of investment strategies, and I’ve written scores of investing programs that, unlike other software vendors, I actually use to make money in the stock market – and, the fact is, thousands of other investors also use my software to make money.
In fact, I make most of my money by investing in stocks – not selling investment software (although I do make a tidy sum doing that too).
So where are you going to find this education? And how much will it cost?
Well, the good news is that you’ll find it instantly online and it’s relatively inexpensive (about $130). I like to call it the University of Amazon.com. If you truly want to learn the best way to invest, so that you can manage risk and increase returns while removing your emotions from the equation, look no further than Amazon.com.
I’ve listed the absolute best books on investing below (in no particular order). If you read them, really read them, and follow what you learn, I’d be very surprised if you don’t outperform the vast majority of investors, mutual fund managers and the various market indexes. That’s how powerful these books are.
Just surf on over to Amazon.com (or click on the book images above) and start your stock market education right from your own home. How easy is that?
There are two other books that I didn’t include in the list above. I definitely recommend my book, The Pragmatic Investor. If you read it and do what it says, you will definitely become a better investor.
The second one is a classic called, A Random Walk Down Wall Street, by Burton Malkiel. It’s actually very good. However I don’t agree with everything in it. So although I’m recommending it, take some of the things it says with a grain of salt.
Finally, be sure to check out Warren Buffett’s annual reports to his Berkshire Hathaway shareholders over at www.berkshirehathaway.com (it’s filled with fantastic investment advice and won’t cost you a cent).
So there you have it. A complete education on how to invest successfully in the stock market for much less than the cost of a family dinner out at a nice restaurant. What more could you want?