In my current re-read of Benjamin Graham’s timeless book “The Intelligent Investor”, I ran across the following paragraph and was immediately struck by the simple, deep truth in the lines: But note this important fact: The true investor scarcely ever is forced to sell his shares, and at all other times he is free to disregard the current price quotation. He need pay attention to it and act upon it only to the extent that it suits his book, and not more. Thus the investor who permits himself to be stampeded or unduly worried by unjustified market declines in his holdings is perversely transforming his basic advantage into a basic disadvantage. That man would be better off if his stocks had no market quotation at all, for he would then be spared the mental anguish caused him by other persons’ mistakes of judgment. Jason Zweig, in his notes for the […]
book review
Book Review: The Malign Hand of the Markets
Subtitle: The Insidious Forces on Wall Street that are Destroying Financial Markets – and What We Can Do About It This book, written by Duke Professor of Psychology, Biology and Neurobiology John Staddon, provides a quite interesting view of the way our markets are impacted by the “malign hand” – a play on the “invisible hand” described by Adam Smith in his book “Wealth of Nations”. Briefly, the Invisible Hand Theory describes how an unknown force allows the market to self-balance – the self-interest of the individuals making up the marketplace has a beneficial impact on the overall marketplace, even though the individuals in the marketplace are only interested in their own benefit. But we’re not here to talk about Invisible Hand, but rather the Malign Hand. Staddon explains that individual self-interest may have a negative impact to the overall marketplace. One example of this is in the tragedy of […]
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Book Review: Low Fee Socially Responsible Investing – Investing in your worldview on your terms
Today I’m reviewing a book written by a friend and colleague, Tom Nowak, CFP®. Tom is passionate about Socially Responsible Investing (SRI) and he has written a great overview of the concept. He introduces some very good tools that the average investor can use, either on your own or to help guide conversations with your advisor. But SRI concepts are available in many forms from many sources – what makes Tom’s book unique is that he develops a framework that allows the individual investor to implement SRI strategies (or for that matter, any investment strategy reflecting a particular worldview) in a very cost-effective manner. Mr. Nowak starts out with a discussion of fees and how they can have a major impact on your overall investment returns. As you may already know, any reduction that you can achieve on the fees that your investment activities cost you will be returned directly […]
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Book Review: Abnormal Returns – Winning Strategies From the Frontlines of the Investment Blogosphere
I wasn’t sure what to expect when I opened this book. After all, the subtitle could lead one to expect some sort of sensationalistic attention-grabbing sort of “get rich quick” scheme. I was pleasantly surprised, to say the least. I had not read any of author Tadas Viskanta’s writings prior to this book (I’ve since resolved that shortcoming – see Abnormal Returns, you won’t be disappointed!), so I didn’t realize how insightful and reasoned Mr. Viskanta’s commentary could be. What he has produced in this book is an excellent overview of the components of the investment environment these days. This book should be required reading for anyone who is investing these days – especially for the non-professional investor who is going it alone, without a professional advisor. The author starts off with a thorough explanation of the concepts of Risk and Return, and then explains the basics of Stock (Equity) […]
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Book Review – Backstage Wall Street
This was a good book, I truly enjoyed reading it. The primary reason that I enjoyed it so much is because it’s the book I have been hoping to find from someone like author Joshua Brown: a book that tells the truth about what’s really going on on the seamy side of Wall Street (which is the only side, to be truthful). Joshua Brown (TheReformedBroker.com) provides a unique perspective – that of someone who has been involved in the “inside” of wirehouse broker-dealers, but who has since seen the light and moved on to a career in independent investment advice. As such, Mr. Brown has seen the worst of the worst, in terms of how these institutions treat the investing public. Once he became aware of how it all worked, through a great degree of soul-searching (and a whole lot of gumption), stepped away from it all and has never […]
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Book Review: The Wall Street MBA
This book, by Mr. Reuben Advani, sets out to cover much of the pertinent information required in an MBA program within its pages, and I think it does a good job of meeting this goal. Mind you, I don’t have an MBA degree so I can’t say with certainty that the goal is accomplished, but I’d have to say that the book does an excellent job of hitting all of the important points of required knowledge, specifically as it relates to investing and individual company valuation. I liked this book, but then again I’m kind of an out-of-the-ordinary accounting/investing geek. Where I have some confusion with this book is in understanding who is the target audience. The problem is that the subject matter gets pretty involved in accounting principles that can be overwhelming to the average individual – potentially so much that the average individual may lose interest. On the […]
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Book Review: Investment Mistakes Even Smart Investors Make
This book is a must read for all investors. Author Larry Swedroe has demonstrated once again how he has a full understanding of the average investor’s situation, by listing 77 real-life mistakes that all of us have encountered at one time or another. What’s more, Mr. Swedroe also takes the time to provide examples of where the mistakes listed have damaged investors’ situations, as well as to show how the investors could have avoided the mistakes. Larry Swedroe, for the uninitiated, is a best-selling author of many books which explain his concepts of investing – including The Only Guide series, The Quest for Alpha, and others. These books cover primarily passive investing, or investing without active management, and as such he is a sort of guru in the self-managed investment world. The listed mistakes in this book include everything from hindsight bias (believing after the fact that a particular occurrence […]
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Book Review: Financial Fitness Forever
I have to tell you something about how I treat books: I have a great deal of respect for books. I have so much respect for books that you will rarely find a book in my possession that has writing in it (other than an author’s signature) or page corners turned down. I like my books to be pristine, so it’s against my own personal rules of conduct to do things like that to a book. Occasionally though, I run across a book so important and useful that I am compelled to break these rules, in spite of myself. This particular book is just such a book. What I found so useful about this book is not the subject matter or the topic, as there are many, many books on the topic of how to be financially secure throughout your life, with most being far less impactful than this book. […]
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Book Review – Freedom From Wealth
This book is an excellent resource for folks who have been accumulating wealth over their lifetimes – wealth that is more than they need to live off of. Granted this isn’t everyone, but it’s probably a lot more of you than you think. You don’t need to be a Bill Gates to have these sorts of issues in your path. When you’ve worked your entire life to build up your wealth, you likely want to leave some of it to your children and grandchildren, but is it best to just hand it all over to them at your passing? What if you also hoped to make a difference in the world with your money – perhaps with charitable activities, or to help your offspring to establish their own place in the world, or to leave a legacy, a way that your name can live on? The first part of this […]
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Book Review: Saving Capitalism from Short-Termism
How to Build Long-Term Value and Take Back Our Financial Future This is a great book. I got a lot out of the sections that bring to the surface a lot of the issues that we’ve been seeing in our economy. These issues have been written about in countless places, but author Alfred Rappaport also proposes workable options that could be put into place to resolve these issues, a step that has been lacking in other places I’ve seen these issues discussed. But I’m getting ahead of myself. The issues I’ve referenced above are the sort of systemic issues we’re seeing in economy in general and specifically the financial services industry. Included in these issues are the wild short-term fluctuations we have been seeing in the markets, in part due to the ways that CEOs are compensated, how investment managers are compensated, and how those compensation systems influence behaviors and […]
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Book Review: The Old Rules of Marketing Are Dead
The complete title of this book is: The Old Rules of Marketing Are Dead – 6 New Rules to Reinvent Your Brand & Reignite Your Business, and it’s written by Timothy R. Pearson. Mr. Pearson is the former Vice Chair, Global Managing Partner, Marketing and Communications (and first Chief Marketing Officer) for KPMG, along with numerous other positions in management consulting, boards and societies. It’s from the perspective that he gained in the position at KPMG that much of the book is written, so it is understandable that the viewpoint is primarily about large corporations. That’s not to say that there is nothing in this book for the small business – you simply need to adjust the language to meet your situation. For example, when the book refers to your marketing team, for the small business person that probably just means “you” – the same as your accounting team, management […]
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Book Review: Investing and the Irrational Mind
This was an interesting book for me. I found that the research that author Robert Koppel has compiled from various sources throughout academia lends a great deal of insight into the “why?” of activities by individuals, professional traders, and others that take part in the great game of investing. Even though the majority of the discussion and analysis that Koppel brings forth deals with professional traders, the behavioral psychology applies to individual, non-professional investors as well. An example of a particularly interesting passage is one where Koppel quotes Nassim Taleb from his book, The Black Swan – effective responses to Black Swan Events (such as the 2008 economic crisis or the 9/11 crisis): What is fragile should break early, while it is still small. Nothing should ever become too big to fail. There should be no socialization of losses and privatization of gains. People who were driving a school bus […]
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Book Review: The Last Economic Superpower
Have you found yourself wondering over the past couple of years just how the Great Recession came about? What sorts of things led up to this meltdown, and how far in advance did it all start? What might we do in the future to keep something similar from happening again? In his book, The Last Economic Superpower, Joseph P. Quinlan does a wonderful job of answering those questions and many, many, more. While the text does get long on statistics and therefore a bit technical to comprehend, I think Quinlan has done an excellent job overall of walking the reader through the precursors to the crisis, the crisis itself, and what our present situation looks like as a result. The first section of the book covers all the events leading up to the late-2008 global economic crisis, tracing issues back to the very roots of the rise of globalization after […]
Sterling Raskie, MSFS, CFP®, ChFC®
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