4 ms·
Ask HN: Good finance books?
In a recent post by Don Dodge, he says: "Diluted earnings per share are expected to be in the range of $2.12 to $2.18." I'm a compsci guy, and have no idea what something as sexy as diluted earnings per share is, let alone why it is important, what the other metrics exist, or why I should care.
Googling it brings up a lot of definitions, but its hard to grasp the big picture with these. The finance section of the book store is an intimidating section at first glance -- can anyone recommend a good book that will bring me to a level where I can comfortably read a financial blog post or the WSJ?
- nostrademons 18y agoHave you checked out Investopedia? http://www.investopedia.com/terms/d/dilutedeps.asp http://www.investopedia.com/terms/d/dilutedeps.asp They hyperlink to all the related terms too. Probably the easiest way to get around financial terminology.
- matt1 18y agonos, thanks. i did see that site and have come across it several times while looking up terms. but as much as wikipedia and investopedia help, its tough to link everything together in the meaningful way a book might. where to most people learn these terms? econ degrees and mbas?
- nostrademons 18y agoProbably not an econ degree - I took a couple econ courses and they didn't cover any standard financial terminology. Pretty sure a typical MBA doesn't cover it either. Maybe accounting, but I've never taken an accounting course. I think most people learn through going to work at a financial firm. My friends in hedge funds actually have classes (with tests, and homework) that they take within their employer, and they cover a lot of the corner cases of financial terminology. I guess I learned most of what I know through osmosis from former I-bankers and quants when I worked at a financial software startup. If you don't mind a book from the 1930s, you could also try Benjamin Graham's Securities Analysis, widely considered the bible of the field. Warren Buffett learned from that, and from pestering Graham until he hired him for his investment fund. It's really dry reading, but covers almost everything you need to know to understand income statements and balance sheets, including little adjustments you have to make to the company's numbers because they always try to paint things a little better than they are.
- sebg 18y agoHere's what I did in the past when I encountered the same situation: 1. Looked up what reports a company has to file. The key one I liked is 10-Q. 10-Q: (from investopedia) A comprehensive report of a company's performance that must be submitted quarterly by all public companies to the Securities and Exchange Commission. In the 10-Q, firms are required to disclose relevant information regarding their financial position. The form must be submitted on time, and the information should be available to all interested parties. 2. Look up your favorite public companies 10-Q. For me: Google's 10-Q filing => http://www.sec.gov/Archives/edgar/data/1288776/000119312507238468/d10q.htm http://www.sec.gov/Archives/edgar/data/1288776/0001193125072... 3. Get a book like Brealey, R., and S. C. Myers. Principles of Corporate Finance. 7th ed. Irvin McGraw-Hill. 4. Using 10-Q, book, and google, go through each line of the financial statement to figure out what it means. 5. For some insight and wisdom, look at Warren Buffet's letters to investors. => http://www.berkshirehathaway.com/letters/letters.html http://www.berkshirehathaway.com/letters/letters.html enjoy!
- matt1 18y agoi will do just this, thank you for the pointer. also, i scanned through one of buffet's letters, and wow, what a wealth of information.
- sebg 18y agogreat. I haven't made it through buffet's letters, but from the one's I've read I've always been very very impressed. Also worth reading are the writings by Buffet's business partner, Charlie Munger ( with this one being my favorite => The Psychology of Human Misjudgement => http://vinvesting.com/docs/munger/human_misjudgement.html http://vinvesting.com/docs/munger/human_misjudgement.html).