I've been thinking about putting some money into an ISA and investing in a few shares, but I have zero experience in doing this. I've read the Naked Trader, but I'm now looking for any other books that people recommend or any other general advice.

I am a broken record on this but I always recommend putting it in an index tracker and forgetting about it.

The maths is simple.
You won't outperform the index through anything other than luck.

Even if you COULD match the index you would be doing what... 10 trades a year minimum....
That is £100 in costs at least which is 1.0% on £10k.

The compounding effect of achieving say 6% a year rather than 7% a year is pretty dramatic.
Your £10k would be £17.9k not £19.7k.


Now - if you view it as a hobby rather than investing and don't mind spending money on that hobby (or rather: generating lower returns) then by all means trade away. But don't kid yourself that you are somehow "investing" or "saving". Sure you are saving money - but not as much as you could.


I should point out that I am biased.
I find it really offensive that people keep thinking that they can read a couple of books and dabble in investing and somehow get rich quick.
I spend all day every day picking stocks and have done for over a decade. I am pretty good at it but I am still very happy to beat the index. It is incredibly hard and your competition is very tough.

I am offended because the implication is that, while it took me 5+ years of 80+hr weeks before I knew my arse from my elbow investment-wise (not including the masters) and I am still learning every day, my job could be done by anyone who reads a couple of books.

Since this is PH presumably you are a company director iphonedyou?
Probably one of the exec too, not just a non-exec.
How would you feel if someone came up to you and said, "I could run your company. I have read Company Directing for Dummies and everything!"

No offence to the OP. I am sure he is super smart but it just isn't THAT easy!

Even worse than that - people put on a couple of trades and make out like a bandit.
Then they think they are Buffett Jnr. It's PROOF that I am an idiot!

maybe people are lucky - i bought BP shares when they were down (not rock bottom, but at a stupid level just after the oil spill) - I sold (not when they were at their highest) and made 20% return in less than 12 months.

am i lucky? maybe, but it didnt take a genius to see that the BP share price undervalued the company as a whole and it would bounce back.

im sure you have worked hard to get what knowledge you have, but dont put others down just to make yourself feel better about it.

i guess your next missive will be about what i do for a living and whether Im a director of my own company? and therefore whether I am succesful or not in your opinion?

db10 - I suspect you might be illustrating my point really well.

I also did this trade so I would be interested in your methodology.
How did you define a "stupid" level - had you taken into account the $32bn provision they took against Macondo?
When you say it "undervalued" the company what value did you put on the rest of the assets and how did you value the probability that the eventual cost of the spill would be greater or less than $32bn?
Was it EBITDA multiples? PE? FCF? Relative or absolute?
Did you hedge the oil price exposure? What long term oil price did you use to value the producing assets?
How did YOU value the clean up cost of the most serious environmental disaster in history and potential litigation?

At what price did you sell - why did you think BP was expensive there?

How much of your portfolio did you put in the trade? 10%, 20%, 100%?

If you just saw a stock that had fallen a lot owing to bad press then yes, you were lucky. And that's great.

Please be clear - I am NOT trying to put anyone down.
I am not trying to make myself feel better about working hard. I feel absolutely fine about it.

I am genuinely trying to offer advice that I firmly believe will save the OP money.

The maths that shows that the majority of fund managers (full time professionals) fail to outperform.

The maths that says that transaction costs are going to put you at a material disadvantage.

The maths that says that you don't have access to management, to a bloomberg terminal, to sell side research, to proprietary market research.

The maths that says that YOU HAVE A DAY JOB!


Again - why would you think that reading a couple of books would make you better than full time veterans?
How is it that this is perfectly accepted for stock picking but literally NO OTHER PROFESSION????

im not sure whether you proved my point or not - fundamentally the share price versus net asset value was out of whack so it was clearly undervalued. did I believe that the company had adqueately provided for the oil spill - yes, I believe the auditors would have been over prudent and therefore they were overprovided.

I put 95% of the amount of money i put into shares into it (i dont hold many shares) - i sold because i was forced to (independence rules and my job) so the timing of the sale was out of my hands.

i guess what Im trying to say is, you can look at all the charts and metrics you like, but maybe sometimes its easier to look at something as fundamental as net asset value versus market cap and factor in public sentiment = gain?

A few good books are surely a very good start.
Who said they will make you great though... ?

+1. It's a start - no one said it would make you great.

Walm seems to have just fabricated a statement so he can argue for the sake of it.

No you didnt.