Learning and planning

I wrote in my previous post about time management issues, we face as non-professional investors. We barely have enough time for our jobs and family. How the hell can I one pursue an outside interest such as investing ?

I am not referring to investing one’s capital via other vehicles such as mutual funds, FD etc. These options require much lesser time and can give a decent level of returns. I am referring to pursuing investing as an interest or hobby. In such a case, one is not looking for only returns, but also at learning and becoming a better investor.

The beginning
My own journey started more than a decade ago. I had started managing the finances for my family and had started reading up on the basic such as what is an FD, what is a stock etc. Those were pre-internet days, so access to information was limited. I remember searching for books and finding very limited numbers on investing. My main sources of learning initially were finance textbooks and economic times.

By 1998, I had access to internet and that was like opening a huge door for me. For professionals like us, the internet is god send opportunity. I cannot imagine being able to learn and develop as an investor while still working at my day job without the internet. Even this blog would not have existed without it !

Well, with access to internet and all this information, I started reading and learning the basics of investing. The period 1999-2002 was time spent on learning the basics. During the period 2002-2006, I started reading more annual reports compared to general articles and books. However the reading was random and all over the place.

Reading too random
I realised by 2006, that my reading was quite random and not directed. As a result I was reading the entertaining stuff, but not necessarily the dry and important materail such as accounting, AS standards , annual reports etc.

In order to avoid that, i now have a list of topics I want to learn and improve upon. For example, my current year plan includes learning more on behavioral finance, GAAP accounting and arbitrage.

The process
With these topics in mind, I start by looking for books and will list 3-4 books on the topic. Once I have the books I need, I will generally spend 2-3 months or more on that topic. This ensures that I maintain focus on a topic, explore it fully and at the end of it have more depth in it.

As an example, I am current focussing on behavioral finance. I have read 3 books on it already and plan to read 1-2 more books on it. Based on my learnings, I plan to review my current holdings to check my biases and will also be updating my investment templates (see here for the templates).

Additional reading
In addition to the focus topics, I continue reading annual reports and tracking the performance of my current holdings. I am currently not searching for new ideas as my current list of holdings have reached my maximum limit (in terms of number of holdings). As a result I am reviewing my current holdings and will require a new holding to replace an existing one.

The above is a reading/ learning plan. All my blog entries and updates are usually centred around the topics and companies I am reading about. So you can see, the blog is an extension of my learnings and current thoughts.

So in summary I can break down my approach into the following points
- key objective is to learn and be a better investor
- all reading and learning is focussed on the key objective
- The objective would be achieved by identifying areas of learning and then focussing on them one at a time

No shortcuts and magic bullets here !