Book reviewed: Learn to Earn by John Rothchild and Peter Lynch

719aak0tVwL.jpgLearn to Earn” by John Rothchild and Peter Lynch is a book for any investor and anyone interning to learn how a company earns money.

The book accomplishes on what it sets out to accomplish by showcasing that capitalism is the best economic system.

The author, John Rothchild, is most know for his work as the former editor of Washington Monthly as well as a former columnist for Time and Fortune.

The co-author, Peter Lynch, is an investor know the As the manager of the Magellan Fund at Fidelity Investments between the years 1977 and 1990. Peter Lynch averaged a 29.2% annual return with is mindblowing.

I enjoyed reading the book. The book helps me confirm my thought that the best economic system is capitalism for the company, the consumer and the investor.

I enjoyed the first chapter where the author briefs a quick history lesson of capitalism and explain without a capitalist country like the United-stade would it prosper as it did. I also like the appendix two where the author helps ride a company balance sheet.

The only thing the I did like is that the book isn’t updated and the references are old. Unless this I enjoyed reading the book.

I would recommend this book to anyone interning to learn how a company earn money and to learn about the stocks.

 

What I have learn during​ 1 year of investing

This is what I learned after one year and a couple of months investing on the stock market. I have learned a lot from my firstsecond experience until now on the market.

The biggest mistake that I made when purchasing ownership in a company was buying stock without learning about the company, especially for my first investment. I bought the stock hoping it will go up and I failed terribly. The stock crumbled down. In fact, I lost 48% of my book value. Regardless of my loss, now when I find an interesting company, I research about the company even if I don’t buy the stock.

“The dumbest reason in the world to buy a stock is because it’s going up.”
-Warrant Buffet

I have learned only to invest in an excellent company and for the long-term. Why in the long-term? Because an excellent company will always go up, from the technology industry to the waste industry.

I find it hard to be informed about a company announcement, what the market is saying about the company. To be more informed, I use stock apps as a news feed for the company I follow. This is very useful for me, I personally use Yahoo! Finance.

I have acknowledged being patient because there will be days and even weeks where you are losing money. The key is just to be patient and it will eventually go up. Of course, it applies only if you invest in an excellent company.

I have been able to learn if the market will react in a way that I will be losing or gaining money on a day. For example, during the election day, when Trump was winning, the market went down because of the news that Trump was winning. On the other hand, when Trump has been elected president, the market went up and nowadays is high almost at all time. During the quarter earning, if analyst expects that a company will not perform as the predicted, there will most likely have a sellout. This is a good time to buy a stock at discount prices before it gets back up if you believe that the company will perform in the long-term.

When one of my companies was being acquired, I have learned that a company acquisition is a long process. Indeed, it takes months for the acquisition and any news can affect the company stock prices. In my case, I had to vote for the acquisition.

I learned that I can reinvest dividend every quarter even though the number of shares will not be a lot, in the long run, it will grow. That’s the beauty of compounding.

I have learned utilizing fundamental analysis is better that technical analysis. This is if you want to own a company because technical analysis is entirely unconcerned about the companies from which they are buying stock.

For next year, what I want to do is to diversify more my portfolio. I would like to own 15 to 25 companies, both grown and income companies. I want to read more books about the stock market and especially The intelligent investor by Benjamin Graham, the father of value investing.

If you are willing to learn about investing, I recommend Investment 101 by Michelle Chang. I have written a review about the book just click on this.

Book Review: Investment 101 by Michele Cagan​

26450689Investing 101 by Michelle Cagan is a book for the newcomer in the vast world of investing.

The book accomplishes on what it sets out to accomplish by giving a good overview of every branch in investment such as stock, bonds, ETFs, Mutual funds, currency commodity trading and real estate.

The author, Michele Cagan, has worked in several fields involving money such as financial planner, accountant, and tax advisor. She also wrote several books on personal finance and business.

I very much liked the book. I had some knowledge about investing prior but reading the book probably gave me a better understanding than the average person. I was still able to learn a lot which is never a bad thing. I have expanded my knowledge about the stock market and learned about new ways to invest especially in the bonds market.

The book has a dry and academic tone but is very easy to understand and not boring at least for me and the author doesn’t implement fancy words. It is written for the new learner with no or very little knowledge about personal finance.

I enjoyed the last two chapter where the author writes about how a person can build a profitable portfolio built according to the person’s needs. I also loved the chapter where the author introduces successful investors and gives their advice to the reader. Finally, I loved the part where the author gives an exercise where you can learn about your risk tolerance which is an important aspect of investing.

I did not enjoy parts where the author talked about mutual funds, currency, and commodity trading because I have no interest in this type of investment.

Event though I did not enjoy some parts of the book, I would change nothing about it. I believe that every part is important because every person has different ways to invest and all of them are important even if all these branches are not meant for everyone.

I would recommend this book to everyone because I truly believe everyone should learn the basics of investing.