Welcome to Investing for Beginners podcast this is episode 65. Tonight Andrew and I are going to answer some readers’ questions, we’ve gotten some fantastic questions over the last few weeks and Andrew and I wanted to take a few minutes to go ahead and answer those.
I’m going to go ahead and start off with the first one so bear with me reading this so I have.
Hi Andrew,
I stumbled across yours and Dave’s podcast of the search for the ultimate truth and knowledge of investing. I have dabbled in investing, more gambling with Forex and options with a couple of stocks not good ones just losers.
The thing I’m finding is there is so much info out there or leading you this way in that so the question I have for you is now that you’ve been investing for a while I’m probably still learning along the way if you had to start again or start your daughter if she was of age for investing of her own like fill town and his daughter where would you start and what steps would you suggest?
I understand the concepts of Valle investing I believe by a good company for less than what it’s worth for a margin of safety and look for good businesses that I can understand.
I’ve just finished listening to the value investor from Graham but the issue I seem to run into is it valuation of businesses or should I start looking somewhere else.
I know you’ve both put out good info for stocks but how do you go about finding those I forgot to say thank you for both of you from probably every new investor for trying to help people realize that there is a way to have money for retirement.
Tom
Well Tom you’re welcome this is why we do what we do we love helping people and that’s a lot of fun to talk about this and Andrew and I get to geek out on air.
Let’s see let me take some of these questions for you. so if I had to start we’ve talked a little bit about this but I’ll go back and talk a little bit about this again if I had to start again or start my daughter when she was of age oh I feel town on his daughter if you guys have not checked out that’s Invested fill town and his daughter Danielle talked a lot about investing Daniella is a newbie and fill town is a value investor and of the like that we talked about and it’s kind of a great interplay between he and his daughter is their he’s trying to teach her all about Wall Street and everything. so it’s kind of a it’s a cool podcast if you want to check it out.
If I wanted to start Sadie off with investing I would just basically sit her down and talk about buying companies and so many people look at investing as buying a stock as a piece of paper or a ticker symbol on their computer or their iPad or their phone. And I would talk more about what you’re actually buying you’re actually buying a piece of the business and go about talking about how the business makes money and teacher the ways of businessman.
Warren Buffett always says that he’s a great investor because he’s a great businessman he talks a lot about and kind of vice versa he’s a great businessman because his investor and they really go lockstep hand-in-hand with each other the more you learn about business and how they operate and how they make money you become much a better investor because as I’ve said before our we’re buying businesses.
I would start with that and learning more about how businesses make money and where their revenue comes from and just learning the ins and outs of the business. And I’m not necessarily talking about learning how to read a 10k that I think would be overwhelming and kind of boring and I think that would put people off.
But if you really started off with looking at things that you go and buy on a regular basis like Starbucks and have a conversation about  how the store makes...