Books on Investing: Discussions, Reports & Suggestions
- Laurie_Kelly
- Kirk
- SteveT
- JenL_2
- JenL_2
- Kirk
- SteveT
- Kirk
- Kirk
- Kirk
This archived discussion is "read only".
For the corresponding "live" discussions, post in the active topic forum here.
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» Laurie_Kelly - New Book By Career Press
Greetings Everyone! I am writing today per the advice of Kirk. I work for a company named Career Press, a book publisher located in New Jersey, that has just recently published a book entitled The Long Term Day Trader: Short-Term Strategies to Boost Your Long-Term Profits. The book is for the long-term investor that is new to the world of short-term trading and offers short-term strategies as an option to make cash in additon to the long-term investments. I am trying to get the word out about this new book and am looking for sites or possible reviews. If this sounds like something that might be of interest to anyone I would be happy to hear from you. I can be reached directly at lkelly@nisusa.net. Thank you for your time.All My Best
-- posted by Laurie_Kelly
» SteveT - A Random Walk Down Wall Street
<img height=140 alt="Click to order" src="http://images.amazon.com/images/P/0393047814.01.MZZZZZZZ.gif" width=91 align=left target="new" >A Random Walk Down Wall Streetby Burton Malkiel; Hardcover - 461 pages
This book has been published several times beginning in 1973. The edition I read was a paperback copyright date 1996.
First the author explains what a random walk is. "A random walk is one which future steps or directions cannot be predicted on the basis of past actions. When the term is applied to the stock market, it means that short-run changes in stock prices cannot be predicted." He goes on to outline a couple theories that have developed over time to try to determine future returns. They are "The firm-Foundation theory and The castles-in-the Air theory. Then a very brief chapter on risk and some of the Crazes of the past like the Tulip craze, South sea bubble, Florida Real Estate of the 1920s. And finally the roaring 20s and the crash of 29 and rally leading up to the decline in 1932. BTW Roger Babson is mention in this part. The next chapter deals with Stock Valuations over time and which sectors were hot at given points in time.
The next 4 chapters are on Analysis, Technical versus Fundamental. This part of the book I can recommend very highly for those not yet experienced investors. Very god explanations of both methods and some of the theories used like the Superbowl indicator, Hemline indicator, and The Relative Strength System on the technical side. In the Fundamental camp he talks about why analysis can be flawed and factors that can quickly turn what looks like a good decision into a poor pick. The one that caught my attention in this chapter was often a great analyst does such a good job they are rewarded by moving up to a sales position or Portfolio manager. While this can be good for the company they work for they are not doing the work which they have a great track record. Maybe this is one reason so many Funds have a tough time consistently beating market indices or if they have a change in management the fund suffers. At this point we get the authors' views on market Timing. In short he feels it a bad idea. Quoting John Bogle founder of Vanguard. "In 30 Years in this business, I do not know anybody who has done it successfully and consistently, nor anybody who knows anybody who has done it successfully and consistently. Indeed, my impression is that trying to do market timing is likely, not only not to add value to your investment program, but to be counterproductive."
Next he gets into various forms of the random Walk Theory, The Semi Strong and the Strong. I was under the impression before reading this book the author was in the Strong camp but that representation was quickly corrected and put to rest. The strong form suggests all information about a company is in the price now. Any new info will immediately be reflected in the price so it is impossible to find undervalued stocks. In the final chapter he etched that point into my mind with a fictional story about a random walk consisting of a finance professor who was a strong theory kind of guy and two students. The group sees a $10 bill on the ground! The educator tells the students to ignore it. Reasoning if it were really a $10 bill someone would have already picked it up.
The author takes middle of the road or Semi-Strong theory approach. Later in the book we get lessons on expenses, and brokerage costs and the author's recommendation that most of us small investors use no-load Mutual Funds for most if not all our investment options. If we feel the need to invest in individual stocks he does have some commonsense advice. Rule 1. Stocks do sometimes get on one-way streets. 2. Eventually stock prices do change direction and hence stockholder returns tend to reverse themselves. 3. Stocks are subject to seasonal moodiness, especially at the beginning of the year and the end of the week. 4. There is some evidence that stocks with low price-earnings multiples outperform those with high multiples. 5. Stocks that sell at low multiples of their book value tend to produce higher subsequent returns. 6. Higher initial dividends have meant higher subsequent returns.
The next part is on as the author calls it "Academic Playground called New Investment technology." Here we get back into a discussion of things like risk and basically it boils down to if you are trying to get higher returns you must accept higher risk. One of these New age inventions is Modern Portfolio Theory. Invented in the 1950s by Harry Markowitz. This is a very complex mathematical formula that basically says it is wise not to put all your eggs in one basket. Risk comes in many flavors like having an amount of your total assets at risk in the market (asset allocation). Having to much of your equities in one stock ( Diversification) This gets us into what is refereed to as The Capital-Asset Pricing Model developed by William Sharpe, John Lintner, and Fischer Black. Then we progress to a discussion of the usefulness of Beta. It does seem to have its limitations in short tern situations as a predictor of what a stock will do.
Then we get a good lesson on Derivatives and how they work. Conclusion most of us are better off to stay away from them but he did give 3 rules where us small fry might consider using derivatives. Two of those were examples of hedging strategies and would be considered temporary.
Chapter 12 is a "Fitness Manual for Random Walkers." It is 10 exercises we can easily do to make our lives more profitable. Chapter 13 is "The determinants of stock and bond returns and how you can roughly project the future returns from financial assets." These two chapters are the best in the book in my opinion. I will let you decide if you agree with me. Much common sense advise.
Chapter 14 is "A life-cycle Guide to Investing". Four points are; Risk and reward are related, Actual risk in the stock and bond market depends on the time you hold that investment, Dollar cost averaging to reduce risk, Risks you can afford to take.
The last Chapter makes three key points. Use Index funds or tax managed funds; If you are going to be a stock picker follow these rules 1. Purchase stocks that appear able to sustain above average earnings growth for at least 5 years. 2. Never pay more for a stock than can reasonably be justified by a firm foundation of value. 3. It helps to buy stocks with the kinds of stories of anticipated growth investors can build castles in the air. 4. Trade as little as possible; Go the easy route hire a pro. By this he means use mutual funds for saving your time and get diversification with just a small investment. Probably the best way to go for those just getting started investing. Also included a few recommended sources for investors like Morningstar for finding info on expenses and some funds that have done well over time but be fore warned in info is dated but interesting to review.
I found it a good use of time to read this book. I did learn a few new things and got clarification on a few others I thought I knew. If it is in your local library check it out, if not it is still worth $15.95.
-- posted by SteveT
» JenL_2 - Insightful Book
This post copied from the "BB Discussion" thread:Author: MichaelJohn64
Date: March 9, 2001 4:30 PM
Subject: Insightful Book
Besides some serious soul searching, this debacle has led to a lot of reevaluating of first-principles on my part. I have been reading some books that I should have read a long time ago (instead of Marketimer).
One that I can highly recommend to my fellow Qube sufferers/victims/fools is called "What Wall Street Doesn't Want You To Know" by Larry Swedroe. It is a scholarly and common sensical book that will disabuse you for good of any remaining myths and fallacies of guru worship, market timing, etc you may harbor.
It stresses index funds, diversification, proper asset allocation, tax efficiency and other sage advice. All in the goal of giving you maximized returns, restful nights and most importantly a life away from the Market's day-to-day gyrations.
-- posted by JenL_2
» Kirk - "What Wall Street Doesn't Want You To Know
In response to message posted by JenL_2:Hey, the book is on sale!
Review by MichaelJohn64:
It is a scholarly and common sensical book that will disabuse you for good of any remaining myths and fallacies of guru worship, market timing, etc you may harbor.
It stresses index funds, diversification, proper asset allocation, tax efficiency and other sage advice. All in the goal of giving you maximized returns, restful nights and most importantly a life away from the Market's day-to-day gyrations.
-- posted by Kirk
» SteveT - The Intelligent Investor by Benjamin Graham
<img src=http://images.amazon.com/images/P/0060155477.01.MZZZZZZZ.gif align=left width=92 height=140>The Intelligent Investor by Benjamin GrahamIt is impossible for me to do justice to the writings of such a wonderful Educator as Ben Graham. During his life he arguable did more to educate people on the differences between investing and speculating. Warren Buffet is among a long list of those Mr. Graham served as a mentor. Buffet wrote the Introduction and Appendix for the edition I read which was the fifth published in 1973. The recent market decline for me reinforced the key points of the book. As true investors we need not worry about what the day of the week or to a great extent what the broader market Indices are doing. Our main goal is to look at our investments in the light of us buying a piece of a business. We do our best to evaluate what it is worth and buy it only when the price is low enough so we have a margin of safety in case we have incorrectly calculated.
Through the various chapter the author talks about what types of investment is suitable for a conservative or as he calls it "Defensive investor". This applies to Common stocks, Preferred stocks, and fixed income instruments. He also addresses the approach an "Enterprising Investor" or aggressive investor could take. Dealing with market fluctuations was of particular interest for me at this time. It kind of took the edge off knowing this decline to shall pass. He also spent time on using investment advisors and Mutual Funds.
I found the last 10 chapters of real interest, they dealt with security Analysis for the Lay Investor. This was done in an easy to understand manor. It was by no means a substitute for the Graham and Dodd classic "Security Analysis". It was a step by step guide on how to begin to go about valuing a business. Several comparisons of various companies were given as illustrations of key points.
I found the book very helpful because all the elements of the book were detached from all the noise of today’s market. In short understand what you are trying to accomplish and have the discipline to execute your plan. Over the long term you will be richly rewarded. Regularly look at your holdings to see if the present prices make sense and can be justified. If not maybe it is time to take profits, if they do make sense hold them. This point was driven home by the list of companies mentioned throughout the book. Some are still around and doing well, IBM comes to mind. Graham evaluated this company as part of his first job on Wall Street. His boss said to avoid it thinking it was not attractive so he never did buy it. On the other side of the coin those companies that are now gone or in dire straights. The best course is the middle of the road, neither a buy and forget about it or a short term trader be. Maybe the best investment any of us could make is to invest the time to understand more about the decisions we make and how to improve our odds of making more good ones than bad. I would say after reading this I am ready to take on Security Analysis as part of my self improvement program.
-- posted by SteveT
» Kirk - Maria Bartiromo's New Book
Maria was just congratulated on her new book by someone she was interviewing. (she is one smart cookie I am told.. write a book and get sales while you have some fame... ) Anyway, I was told she is quite intelligent and I am hoping someone buys the book and writes a review for us. Here is the info. Order from this link and I get a 15% commission!<img src=http://images.amazon.com/images/P/0066620864.01.MZZZZZZZ.jpg width=96 height=140 align=left>Use the News : How to Separate the Noise from the Investment Nuggets and Make Money in Any Economy
by Marla Bartiromo
Hardcover - 336 pages (June 5, 2001)
Editorial Reviews
Amazon.com
Those eyes. Those lips. That special market-insider's edge. Well, not really. As the comely star and coproducer of CNBC's Market Week, Maria Bartiromo may give the impression she's privy to all sorts of market forecasting sources that individual investor slobs like us aren't. Not so, she'd like us to know, especially in this high-tech age of 24/7 TV and Web news, where everyday viewers learn of breaking changes in the market only a few minutes after, or sometimes right alongside, journalists like herself. What she has that we lack (aside from those eyes, those lips) is a professionally acquired "screen" to filter out the useful stuff from the dross, as well as a sense of how to put everything in context and read between the lines.
That's what she promises readers in Use the News--and what she almost uniformly delivers, in about a dozen chapters that are straightforward, readable, chock full of the kind of news-making anecdotes she shares on her show. Bartiromo is adept at breaking down the machinations of Wall Street and all its players--the CEOs, the brokers, the analysts, the reporters--into a scenario that even the most NYSE-illiterate will enjoy and learn from. After an opening primer on how to evaluate a company and what moves markets (a combination of fundamentals, expectations, and sentiment, she explains), she looks at the four top sources of market news--the government, actual companies, market professionals (like analysts) and unconventional sources (like herself, or your uncle Herb)--and what we should focus on or ignore from each of them. Toward the end of the book, she shares her "top 13 noisemakers" (i.e., things we shouldn't little or no attention to) as well as her personal pick of the best market-news Web sites. Throughout, she dispenses her advice like a top reporter with stories on the highs and lows of everyone from Fed chief Alan Greenspan and market guru Warren Buffett to "rock star" analysts like Ravi Suria and Holly Becker. She also includes great boxed sections on such skills as how to read earnings reports or analyze insider sales, not to mention in-depth Q&As with top analysts in each of the major markets.
For anyone who wants to know how to use the news to better understand or guide their investments--and how to weed out the important stuff from the debris --this is a smart, substantial, and briskly paced guide to just that, from a financial-news hotshot whose pretty face explains only a small part of her success and following. --Timothy Murphy
-- posted by Kirk
» Kirk - Economics in One Lesson
Hard to get more for $8.00 (current sale price)Might make a good father's day gift?
<img src=http://images.amazon.com/images/P/0517548232.01.MZZZZZZZ.jpg width=93 height=140 align=left >Economics in One Lesson
by Henry Hazlitt
Review:
Students Love Hazlitt!, May 17, 2001
Reviewer: Scott A. Kjar from Auburn University, Alabama
I teach Principles of Microeconomics, and I always use this book for extra credit. Students who hate reading long, boring, stuffy text books always like Hazlitt, and give him high reviews every single semester. The very readable chapters are short (about 3-6 pages in most cases), and told in story form to make Hazlitt's point. This makes it possible for even freshmen with notoriously short attention spans to read the day's chapter.
Hazlitt's "one lesson" is simple, and told in Chapter 1. The rest of the chapters are all stories in which the lesson plays a prominent role. In short, Hazlitt doesn't merely tell us the lesson, he actually shows us the lesson -- over and over and over, until we've got it.
With stories on tariffs, minimum wage, rent controls, taxes. unions, wages, profits, savings, credit, unemployment, and so much more, Hazlitt takes some of the most difficult economic concepts and makes these easily accessible to the lay person who has no economic training, background, or even inclination.
It's one thing for me to recommend this book. It's quite another for my students to recommend it semester after semester. I can imagine no higher praise.
-- posted by Kirk
» Kirk - "You're Fifty-Now What?"
Original post: http://www.suite101.com/discussion.cfm/i...Author: Fred2000
Date: June 8, 2001 5:50 AM
Subject: Re: Re: Re: Update
In response to message posted by Mark_J:
"And say, while there, why not check out the graduate-level financial textbooks on the recommended reading list?"
Mark_J,
If you're really interested in graduate-level financial information, instead of going to the Brinker link, check out Charles Schwabs book "You're Fifty-Now What?" A cram packed volume of basic information more extensive and concise than Bob ever dreamed was possible.
Even when it comes to disseminating financial information, Bobs efforts are second rate when compared to many others. Don't just take my word for it. Check it out yourself. Of course, one down side is that there is no sports information between the covers of the book. But hey, you can't have everything.
-- posted by Kirk
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