Most of us could easily fill a book with the coulda/shouldas in our lives. And, for the most part, it's not a good use of time to dwell on those shadows of the past.
But I recently received an email from a college sophomore asking for advice. After I finished wondering how far down the list he had to go before deciding to email me with that question, I started pondering what I wish I'd done in my college days.
1. Buy more stocks
I did buy a few stocks while I was in college -- and, sigh, AOL/Time Warner was on that list right before it upended. But I wish I'd purchased more.
That's not because I assume I'd be rich and retired now if I had. Instead, it's because I've found that having money on the line goes a long way to stimulate learning. It doesn't have to be a lot of money -- just a couple of shares, depending on the stock -- but having something at risk has always driven me to do more work than I might otherwise.
This may simply not be an option for some college students. In that case, there are great mock portfolios that can be built online -- with The Motley Fool's CAPS system at the top of my list. There's no money on the line in that case, but pride and bragging rights aren't a bad alternative. (Find me on CAPS.)
2. Read more of the good stuff
Sure, I did plenty of reading in college. Unfortunately, most of it was along the lines of how to better build an econometric model, optimize economic relationships between fictitious countries, or separate debits from credits.
It wasn't until later that I was introduced to the "good stuff." To me, that header includes the following:
- Warren Buffett's letters to Berkshire Hathaway (NYSE: BRK-A ) (NYSE: BRK-B ) shareholders (they're available for free here)
- Ben Graham's The Intelligent Investor
- Peter Lynch's One Up on Wall Street
- Seth Klarman's Margin of Safety
- Jim Collins' Good to Great
- Howard Marks' The Most Important Thing (if it had been published when I was still in school)
This is far from a complete list -- and if I were to add to it, I'd add more business books as opposed to investing books -- but my 2013 self would have benefited if my college self had made it through that list.
3. Run with the right crowd
You can find a lot of different types of people in college. Admittedly, I spent a little too much time trying to figure out which people were the "cool" ones. A decade later, I'm wearing a bow tie and spending my days talking about bank stocks. So much for cool.
Were I to do it over again, I would definitely seek out my university's investment club -- or, at least, some other students that like to geek out over stock talk. One of the core strengths of The Motley Fool is the community that has sprung up around it. Whether that's the discussion boards, CAPS blogs, or the ongoing conversations David Hanson and I have with listeners of Where the Money Is (we're on Twitter @TMFFinancials), Foolish investors are constantly exchanging views.
I wouldn't know nearly as much about investing as I do today if it weren't for the other investors I've interacted with -- whether that's meant them sharing their ideas or challenging mine. I'm sure I'd be in an even better place today if I'd found that sort of community in college.
4. Don't fear the SEC
All publicly held companies have to file periodic reports with the Securities and Exchange Commission to disclose what's going on with the business. These filings can be seriously intimidating. Bank of America's (NYSE: BAC ) most recent annual filing, for instance, is nearly 300 pages and includes sections that are positively impenetrable for the uninitiated.
However, there are sections of the filings that are generally much easier to parse. Three of my favorites in the 10-K annual filing are the business section, the risk factors section, and management's discussion and analysis. Those sections are even relatively digestible in Bank of America's filing.
There are also some companies that strive to make their filings easy to follow and have an obvious desire to make sure investors understand their business. Specialty insurer Markel (NYSE: MKL ) is a superb example of that. While I wouldn't say that an insurance newbie will sail through Markel's filings, the writing and explanations are about as accessible as one could hope for from a fairly complex business.
What's even better for the broke college students out there is that the SEC has all of these filings up on its website for free.
5. Start a business
Of all the things I've learned about investing, the most important has been that to be a great investor, it's essential to really understand business. Not margin ratios. Not valuation metrics. Not the capital asset pricing model. Business.
Reading lots of SEC filings and books about business can help build that understanding, but there isn't a better way to learn than to start a business yourself. And who knows? You just might end up the next Mark Zuckerberg.