Trading your way to a million in the stock market takes hard work. But the more effort you put into evolving your investment style, the faster you’ll start to see decent results.
I reckon we need to study, practise, evaluate, adjust and repeat to get that million. And doing that can form a continuous spiral that leads to ever-better execution of our activities in the stock market. Keep going, and you’ll have more chance of latching onto some winning stocks that can propel you towards that ‘magic’ seven-figure sum.
And when it comes to studying, there’s nobody better to study than investors who’ve not only made a million, but much, much more.
Developing your own investing style
My investing style began evolving when I picked up a copy of Mary Buffett’s book Buffettology during the late 1990s. At the time, I was running my own company and the book inspired me to make changes to the underlying business. Indeed, Warren Buffett’s investing principles helped me make the business more profitable and led to its sale. And that’s how I achieved the capital for investing in the stock market.
The book taught me about the difference between what Buffett calls Commodity-Type businesses, and Excellent or Consumer Monopoly businesses. The former tend to have zero pricing power, and the latter tend to enjoy profitable market niches and strong brands. So, armed with that information, I achieved mixed investing results in the stock market. But soon discovered Benjamin Graham’s classic tome The Intelligent Investor. And the book gave me a decent foundation for how to recognise a share price that was mispricing the underlying business. I’d recommend every serious-minded investor wade through its pages. Within the covers, there’s a good grounding in basic value investing.
Essential Warren Buffett
But delving more into Buffett’s methods led to me to his shareholder letters. They reveal he invests differently to Graham. And as far back as the 1960s, he was moving away from simply buying cheap shares. He now puts far more emphasis on the quality of the underlying business. Meanwhile, further insights came when I read Peter Lynch’s books, One Up on Wall Street and Beating the Street. And Jim Slater’s book The Zulu Principle.
By then, I had a good grounding in investment strategy and began to overlay techniques from the world of stock trading. Richard Farleigh reckons trading and investing are becoming more closely linked over time. And the insights I discovered in his book Taming the Lion have been useful.
In recent years, I’ve learnt much from Mark Minervini who has written books such as Trade Like a Stock Market Wizard and others. And just as with every new investing book I’ve studied, my returns from the stock market have increased because of the insights I’ve gained.
Depending on your starting point, aiming for a million from shares can be an ambitious target. But I believe most people can adopt a lifelong learning approach to investment strategy and combine it with experience in the markets to achieve the goal.
