playin' the stocks game
jhp: Here are some things to keep in mind:- I think that it is best to invest directly in securities (only resorting to index funds if you really must outsource your thinking). You'll learn the most if you make the big decisions.- Learn how to analyze the public information available. Cash flows. Balance sheets. Income statements. Get an accounting book! Learn about the types of securities and alternatives to equity investing (especially the various kinds of bonds).- Market prices are based on combination of innumerable emotional and rational reactions to the real value of the companies behind the shares. Only over the long term will the price reflect the real value of these businesses. At any point, the price can be completely outside of reason, so beware of and be ready to take advantage of the stupidity of crowds.- Invest in types of businesses that you can understand, or plan on spending lots of time researching "in the field". Really focus on a few. When I was buying shares of Nabisco, I was spending late nights in the cookie aisle at Vons. When I started buying Apple, I spent serious time at their first toe-hold at CompUSA and later at their stores. I recently spent time at the Crocs stand at the mall to evaluate this company.- Learn the different investment mental models and build one for yourself. Graham. Buffett. Munger. Lynch. Fisher.- Learn about related fields. Psychology. Macroeconomics. Patent law. Whatever is important to industries that you are going to focus on.- Keep investing. When you are 40 or 50 years old you might be half-good at it.