Accounting

[mperich]

Hi guys,

Ive decided to get seriously into investing lately, as I will probably have fairly large sums of money to work with in the next 6mo-1yr, so you guys will probably be seeing a lot more of me around here [img]/images/graemlins/smile.gif[/img] I have always enjoyed a challenge, as well as learning (about things that interest me anyways), and would like to eventually actively manage my own portfolio (well)

Anyways, from what I have read around here it would seem that you need some accounting background to get started with value investing. I was wondering what the best way to go about learning this would be. I dont really want to take a class, but I would be willing to read thru an accounting txt book (or 2 etc if thats what it takes). Or would you say that some sort of beginner accounting book etc would be all I would need at this point? Any recomendations on specific text books used in a college course that you took or any helpful titles I could get from amazon etc would be awesome. Thanks in advance guys,

-Mike

[mrclean368]

[ QUOTE ]
Hi guys,

Ive decided to get seriously into investing lately, as I will probably have fairly large sums of money to work with in the next 6mo-1yr, so you guys will probably be seeing a lot more of me around here [img]/images/graemlins/smile.gif[/img] I have always enjoyed a challenge, as well as learning (about things that interest me anyways), and would like to eventually actively manage my own portfolio (well)

Anyways, from what I have read around here it would seem that you need some accounting background to get started with value investing. I was wondering what the best way to go about learning this would be. I dont really want to take a class, but I would be willing to read thru an accounting txt book (or 2 etc if thats what it takes). Or would you say that some sort of beginner accounting book etc would be all I would need at this point? Any recomendations on specific text books used in a college course that you took or any helpful titles I could get from amazon etc would be awesome. Thanks in advance guys,

-Mike

[/ QUOTE ]

A good book on Accounting that explain things on a level it looks as if you are looking for is 'How to read a Financial Report' by John Tracy.

[Evan]

I don't think a college text book is the best way for you to go about this. They are pretty dense and really designed to be used in conjunction with a teacher.

I don't know any other books but I'm sure something like mrclean suggested is a better resource to start with and use on your own than a 500 page textbook.

[DespotInExile]

There are a lot of good self-study tutorials built around a super simple business, like a lemonade stand, that gets progressively more complicated with each problem set. But you'll learn the basics of accrual accounting, understand concepts like matching expenses with revenues, etc. Mind you, you're not going to understand the rules for accounting for asset-backed securitizations under FAS140, or issues being considered by FASB EITFs, but it's a start. Do be aware, though, that a little accounting knowledge is a dangerous thing--particularly when you're examining modern, financially sophisticated companies, that dont fit neatly into Accounting 101 situations. As you get into it, I found one good book to read was Howard Schilit's "Financial Shenanigans", because it takes more of a forensic look at accounting, rather than an investor-based approach. The forensic accountants are always more careful readers of financial statements, in my view.