Barry Ritholtz has a great column on what it takes to be a great investor.
My thoughts on his suggestions.
1. Historian - absolutely but looking at the numbers alone will not prepare you for the emotional involvement of what is happening. Reading about history is one thing, experiencing it is something else. I proposed a business history course at another college but no one seemed interested. Too bad I have engaged in quite a bit of that self education since the melt down in 2008.
2. Psychiatrist - This is where socionomics comes in. Understanding that changes in social mood bring changes in the markets is paramount, period.
3. Trial Lawyer - for that one I would substitute External Auditor, a healthy does of professional skepticism is an absolute. As he says every CEO wants you to buy his stock. But is he or she doing so, that is not the case right now at CRM or OPEN, both hot stocks. What does that tell you, the insiders are selling, if the CEO is not buying neither should you. NO matter how much you learn about the company you will not know as much as he does.
4. Math ad Statistics - You need math through Algebra I and Calculus. While most people recoil at the mention of calculus it has a couple of interesting features. One is the concept of a limit. 1/x never gets to the axis, it just gets closer. Another concept is a derivative function, the rate of change tells you what is happening internally in a market. Oh, and from algebra, a parabola or hyperbola is often experienced at market tops or bottoms. And don't overlook arithmetic, you know that percentage stuff. a
Most of the stat you will need is in the Dummies book on statistics. You need mean median mode slope regression and normal distribution and small distribution studies
5. Accountant - Yes particularly Intermediate II on equity, e/s/ p/e and the
income
balance sheet
cash flow
statement of owner equity
Without accounting there is no chance of reading the notes to statements and understanding them.
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