There is no definitive criteria to successful investing. The best thing an investor can do to prepare themselves is to be knowledgeable about the subject and understand the nuances of the market. I would recommend you to have the following prerequisites:
Mathematical Knowledge at high school+ level (understanding algebra and calculus).
These subjects work well in conjunction with economics and investing:
Psychology – Behavioral Side of Economics is key to understanding why the long game is important for the stock market.
Computer Science – Automated Value Investing and Trading are becoming more and more relevant. If your looking for a career on Wall Street I would say this is close to a must for the next 30+ years.
Physics, Biology & Chemistry – A modified version of the scientific method is what should be used for investing + these subjects work well in conjuction with economics as they are mathematically based disciplines.
Starting Out
I would recommend starting by learning the principles of economics which can be done here:
So now you’ve learnt undergraduate level economics and game theory. From here you can learn a bit more about economics / consolidate your learning by reading economics books on this reading list.
Diving Into Value Investing
A Great Resource for economics and investing in general is http://investopedia.com. However I would recommend now going through:
http://www.investopedia.com/articles/basics/07/getting-started-stocks.asp
http://www.investopedia.com/university/beginner/
http://www.investopedia.com/university/dcf/
Most of this is recapping what you’ve learnt in the yale courses. Now its time to learn from the old school value investing gods:
The Intelligent Investor & Security Analysis – Benjamin Graham
Margin of Safety – Seth Klarman
Berkshire Hathaways Annual Shareholder Letters – Warren Buffett
Once you have read these I would strongly recommend reading and following this guide:
http://www.wallstreetoasis.com/forums/on-the-job-with-simple-as%E2%80%A6-my-research-process
Now you can fill in any gaps in your knowledge by reading these:
http://www.streetofwalls.com/finance-training-courses/hedge-fund-training/hedge-fund-books/
Now you should be quite knowledgeable about value investing and the old school plus the more modern hedge fund techniques and strategies.
Also there are many other great annual shareholder reports by some great CEO’s and hedge fund managers.
Practicing Value Investing
Now I would recommend reading 13-F filings of hedge funds and other funds and seeing what they buy, when and why as well as when and why they sell. I would not recommend copying them as the opportunity has most likely gone.
A great tool for the job is: http://whalewisdom.com
Also viewing (and eventually participating) in these forums would be advisable:
http://valueinvestorsclub.com/
There are some great blogs (other than this) that have great stock ideas and portfolio walkthroughs.
Now you are ready to start investing with your own money. To be a successful value investor you must understand more than just this. You must have a vague idea of the macroeconomic picture as well as news. Which is why I would also suggest reading these regularly (I tend to read on a weekly-monthly basis):
How To Find Investments
To find your own investments stock screeners are really the only way. These scan the entire market based on fundamentals you want to find (eg. low PB & PE ratios). The best free stock screener is:
BUT there are better paid experiences if you have the money. You can easily google and find them out.
I would recommend at least when starting out after you have conducted your due diligence and created your view, to start with at least try and find what other people think. If there is a difference in view, read what they have to say and see if you can prove them wrong.
Paper Trading
I would recommend spending a month or two tracking potential investments that you spot and looking at the results. Move on from this step when you have built up your confidence a bit. Do not spend too long paper trading as it is not the same psychologically as actual investing. Investopedia has a paper trading platform.
How To Improve
Try formatting your investments as a scientific method. When you buy a stock work out the catalyst (the reason why there is this opportunity) and the valuation through fundamental analysis as well as other important points (such as management).
When you sell put reasoning why you sold such as a change in the company or share price or that you have found a better asset. If your trade did not go well evaluate why.
Always look back through these justifications and try to improve based on what the stock price is now and what is was like when you bought and sold.
Continued Reading is always recommended in any subject; investing is not an exception.
Being an active participant in the growing online investing community would also be recommended. Please remember however that you should always have your own views and due diligence before you make an investment. IF you are going to copy people you may as well not have bothered reading this article and just go pop all your money in a passively managed index fund.
The Missed Opportunity Fund 