What investing advice would you give to your 15 year-old self? That was the question posed to me at the end of this interview with Livewire back in August (it’s the last question, 19 mins in if you want to skip to it).
I remembered the interview while listening to a Tim Ferriss podcast over the weekend. Ferriss usually interviews “world class performers from eclectic areas”. In this version he interviewed himself. Asked at the 40-minute marker (by himself) about the most worthwhile investment he ever made, Ferriss said “creating my own real world MBA”.
While researching undertaking a US$120,000 MBA at Stanford, Ferriss decided instead to take the $120,000 and invest it. The assumption was that he would lose the money. But that “the skills [he] would develop would be worth more than the $100k over time”. He says the money he lost ($50k of it on the first foray) was his best ever investment.
Investing advice for beginners
It reminded me of the similar question posed to me by Livewire and the similarity in our responses. My advice to everyone who wants to be a successful investor is to take a sum of money you can afford to lose and get cracking.
That doesn’t mean go out and spray money around randomly. It means practice what you are trying to learn. Read Peter Lynch’s One Up on Wall Street, then go and find a stock you think is in the early stages of success and invest in it. Read Ben Graham’s The Intelligent Investor, then go and find a company trading at a discount to its tangible asset backing. Read Joel Greenblatt’s The Little Book that Beats the Market and try and find yourself some “good companies at bargain prices”.
You should expect to lose money. But the practical experience will be worth more than formal training can ever provide.
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Forager Funds is a boutique fund manager specialising in a value investing approach. We offer an ASX listed Australian Shares Fund as well as an International Shares Fund both aimed at delivering returns for long term investors.