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Posted November 4, 2007
Excellent Investment Book
This is an excellent book for someone who wants to invest in stocks. The author lays out a case for screening for individual stocks as opposed to buying mutual funds. He then covers about 12 screening strategies. I learned a lot about what the different financial measures mean, and which ones are best to search with.Was this review helpful? Yes NoThank you for your feedback. Report this reviewThank you, this review has been flagged.
Posted November 11, 2007
This is an outstanding guide to picking stocks. It presents some of the best-supported and most logical strategies I've seen for beating the market, and serves as an easy-to-read backgrounder on many financial subjects 'some of which can be pretty complicated'. The writing is clear and jargon-free and funny in parts. There are basically three parts to the book. The first is not to be missed. You won't buy another actively managed mutual fund after you read it. You might not buy an index mutual fund, either. The author demystifies 'debunks, really ' such high-brow finance topics as the efficient markets hypothesis and capital assets pricing model by tracing the history of probability math and showing how it was gradually misapplied to the stock market. I suffered through several investment courses in college and have long wondered about the everyday usefulness of the material, so I was fascinated by the author's case that much of it amounts to 'mathematical incest' and a mischaracterization of risk. This part also has a highly useful guide to telling reliable stock picking strategies from bad ones. There's a list of 'financial parlor tricks,' or ways that investment firms and stock-picking services sometimes fabricate their performance numbers. The middle section is short. It contains just enough of an intro to financial statements so that you're familiar with most of the terms used in the later strategies chapters. It also has a brief review of screening tools. 'The author writes for a company that has one, but he's up-front about this and mostly just lists the features of each screener.' This section also has basic info on how to use screening tools. Keeping this section so short was a good idea, I think. It keeps the reader from getting bogged down before getting the to payoff in the next part. The last part contains what many people will probably buy the book for: a round-up of the best stock-screening strategies the author says he has found during his work writing columns on the subject. I found several that Ive already started using. One chapter has a way to considerably improve the returns to a strategy I already knew about 'Dogs of the Dow'. Another is about using research spending to find companies whose earnings might be about to surge. Whether you're a growth investor or value investor 'or both' you'll almost certainly find something here that can boost your investment returns. To me that makes the book a bargain. All told: Excellent beginning, good 'and short' middle and excellent end. I highly recommend this book to anyone who invests.Was this review helpful? Yes NoThank you for your feedback. Report this reviewThank you, this review has been flagged.