Is “by far the best book on investing ever written” the worst thing you could ever read?

So, it happened again.

I spoke with a new client yesterday and she said something that I’ve heard before. Maybe 4 or 5 different occasions. Let's call her Jane.

She’s lost money taking “advice” from online financial influencers - also know has “finfluencers”.

It’s hard to quantify her financial loss, but she is definitely worse off and she felt pretty down about it. She feels “a bit stupid”.

She did what most young, smart, high-earning individuals do when they want to learn something - a little bit of research. On the Internet.

The internet can be the best and worst place to learn about money. It’s literally bursting at the seams with tips, tricks and hacks on how you can “achieve financial freedom” and leave your day job behind.

Knowing there was a wealth of information online - but, equally a lot of garbage - she subscribed to a couple of newsletters and began following some financial people. Her plan was to spot a few recurring trends and tips, assume there was some truth to common themes, then try a few things out herself.

As a self-confessed bookworm, she felt particularly drawn to book lists. A good strategy. Instead of investing her hard-earned money based off a single tip from a random stranger online (it does happen!) her plan was to check out a few book lists, note the regular nominees, and dive in.

The Intelligent Investor by Benjamin Graham was the one book that kept popping up, over and over - it topped just about every investing book list she saw. So she did what any intelligent (wannabe) investor would do, she bought it. When it arrived the next day she gasped at the size of it: 20 chapters, spanning 618 pages.

Jane was not easily deterred. If this was “by far the best book on investing ever written” (Warren Buffett’s words), and she wanted to start investing then, what else could she do but dive in? That’s where the problems began.

Right from the start she struggled. It felt “dry, abstract, and pretty stuffy”.?

Having been a straight-A student through school, and with 2 degrees (one of which First Class Honours) Jane expected to be able to get through it, in a quietly-confident rather than a complacent way. She was used to learning new concepts, hitting the odd brick wall, having to take a step back, think about something, come back fresh and then push on.

This strategy had served her well previously, but wasn’t working now. A different strategy was required.

She moved on to the “Feynman Technique”, a learning method that helps people consume, understand and retain new information and learnings by teaching the concept to someone else. Her husband, brother, mother and colleagues all soon felt her pain, with a newfound pain of their own.

Still this didn’t work. Her flash cards and mini-powerpoint presentations were becoming a chore, and she had nobody to talk to about the concepts she was so eagerly trying to grasp.

After four unsuccessful attempts over a three-year period Jane abandoned her Intelligent Investor journey and donated the book to a colleague. The desire to learn the ropes of “proper investing” had left her, the stock market app on her iPhone was deleted and the cash accumulating in her bank account for investing was shunted into an online saver “paying peanuts”.

For a short while after, upon seeing the Intelligent Investor on the shelf of an airport bookshop or being mentioned online Jane felt a little triggered. A reminded of her perceived failure to get to grips with the “the best book on investing ever written”, the one that the whole world seemingly loved.?

But here’s the thing. She is not alone. I told her yesterday that she was the fourth or fifth person I had spoken to with very similar experiences. I told her it took me two attempts to get through it myself. She burst out laughing when I told her one of my all-time favourite books (Thinking Fast & Slow by the late, great Daniel Kahneman) took me THREE attempts - it’s a dense read, but maybe I’m just denser!

Feeling a little better at hearing of others’ struggles to conquer the book, she began to ruminate on the lost time and forfeited investment gains as result of her experience. “Should've moved on sooner” and “why didn’t I just take proper advice?”.

Jane worried that she’d “lost a fortune”. I showed her 2 historical charts of the stock market, one of the Dow Jones going back to 1900 and one of the MSCI World going back 30 years. I asked her what she noticed, she replied “they’ve gone up”.?

I asked if there was anything else she noticed, she replied “it's gone down a lot, a few times”.

Yep. Both are true. And in all likelihood will continue to be true.

Coulda woulda shoulda. No good comes from that line of thinking (unless you can harness it to effect positive outcomes for yourself).

So, back to my original question, is “by far the best book on investing ever written” the worst thing you could ever read?

Ben Graham, the author, himself admitted before he died that it was out of date and value investing, as a style has, has struggled in comparison in recent years. But, in reality, it depends.

It depends on what you are looking for. It depends on your existing knowledge base, your end goals and personal interests.

The book is a treasure trove of investing wisdom, the newer versions with Jason Zweig’s notes make the book more accessible and relevant than it otherwise would be fore many readers, considering the original edition was written in 1949.

If you are a keen investor, a financial history-nerd, or a finance student you will (most likely) enjoy it.

If you are new to investing, have little interest in the finer workings of value investing, “Mr Market” or allergic to tables of financial data then ask yourself if mauling your way through a 600 page investment bible is the best (and most fulfilling) use of your time.?

For many people, the right book has to come at the right time. And the right time will depend on where you are on your own, personal journey.

Morgan Housel admitted recently on his podcast that, in the past, he has recommended books to people and declared that they changed his life, only to go back and re-read them later and discover “they were not that good, they were pretty mediocre books”. He sincerely meant what he said at the time but now realises that they happened to provide “a missing piece of a puzzle” that he was looking for at that time.

As ever with relevant, useful and actionable information, context is everything. Taki Moore once said “people are choking on content but starving for context” and this is so true when it comes to financial information online.?

It is important to remember when consuming any financial content online that the person doing the talking (or writing) most likely knows nothing about you, your goals, objectives, dreams or fears. They don't know what you’ve been through. They don’t know where you are at financially, psychologically, or academically.

So the next time you hear someone boldly proclaim THIS way or THAT way is the BEST way for you.. take it with a truckload of salt. Do your homework. Ask around. Seek advice.

If you are keen to start investing, pay less tax and protect your family you have two main choices: do it yourself (DIY) or take professional advice.

If, for whatever reason, you favour going down the DIY route then you should read widely and do plenty of research to eliminate potential blindspots and minimise your chances of loss.

If you go down the professional advice route, seek out (a) an Independent financial adviser, who (b) holds either Chartered or Certified financial planner status and (c) follows an evidence-based investment process, to maximise your chances of a positive, successful long-term outcome.

Remember the Abraham Lincoln meme? Don't believe everything you read on the internet.