Three Reading Tips for Gaining Investing Insight

Friday, April 30, 2010

The overwhelming growth of information has not been matched by our ability to assimilate it. So, how do we allocate our limited reading time? Here are three tips to optimize the value gained from reading.

Note: The tips below are not related to research reading – i.e., when you have a subject in mind and want to delve deeper. Using library and online services to find the information is straightforward. The reading I am talking about is the search for special information that can provide new insight and “ah-ha!” moments.

Tip #1 – Use shortcuts

  • Use selected reading lists – The “clipping service” lists are a terrific aid. Many news services offer such lists, often available regularly by email. The best provide a headline and a short description, so you can easily determine if it’s something you want to read. I particularly like BBC’s.
  • Use a publication’s online/email listings – Rather than trying to decipher often cryptic or incomplete tables of content or flip through a newspaper or magazine, we can examine publications using online or email listings. A quick click takes us to the article. I find The Wall Street Journal’s has significantly speeded up my reading of the “paper.”
  • Scan to appraise value – A look at the first paragraph or two should be enough to know whether there will be value from reading an article. If the value isn’t there, skip it and move on.

Tip #2 – Focus on gaining value

  • Control reading habits – Set a time and place to read, so you can concentrate
  • Read it now – When you find a good article, read it right then. Don’t bookmark or print for later reading. Your mind and thought process are in the groove, so you will gain good insight in less time from that immediate reading.
  • Read it all the way through – I have seen scanning/skipping advice for getting through an article faster. That may be fine for a novel, but it is inappropriate for something you believe will add value. Since you are committing time to the article, take it all in. Comprehension will increase as a result.

Tip #3 – Include non-business/non-investment publications

An example is the best way to describe the benefits here.

Neal Miller, now retired, was a top investment manager at Fidelity Investments. He ran Fidelity’s New Millennium Fund from its inception, producing an outstanding long-term record. I was fortunate to have him as an investment manager at ICMA Retirement Corporation, where I was Chief Investment Officer.

His investing approach was truly eclectic, searching everywhere for opportunity, and his reading style supported it. Our quarterly meetings were unique. He would bring in a stack of articles, printed or ripped out, and proceed to run through what was happening outside of the investment world that he felt was important to investing. He read such diverse non-business publications as travel, fashion, scientific, electronic and medical journals. From that wide-ranging information, he could sense a trend developing. For example, he was early into internet-based company stocks.

So… Read for insight (and profit) by allocating your time and energies towards finding and comprehending those items that are of highest value.

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