This guy likes to ramble on just to hear himself talk. He writes the same way he talks – says a bunch of things that sound good but most of it is impractical, incomplete, misleading, and at times, manipulative. The interviews included in the book were useless – nothing material or insightful.
One reviewer on here claimed Ch.2 and Ch.5 are worth both “their weight in gold” and the price of the whole book. Either this reviewer fails to understand what he reads or likes to dramatize insignificant chapters.
First, the interviews are cookie cutter questions and answers such as diversify, do not try to time the market, buy when the market is cheap, and hold for the long term. All of this is general advice that is mostly unhelpful when you sit down and try to apply the advice in real life.
Further, this same reviewer claims “he cannot believe” the chapter that discloses Ray Dalio’s All Weather allocation. First, just like he generally discloses in this book, Ray Dalio has publicly disclosed his All Weather’s general asset allocation (just search the web): about 40% long-term bonds, 15% intermediate bonds, 7.5% gold, 7.5% commodities, 30% stocks.
Moreover, generally disclosing the asset classes fails to disclose the most important part: what specific assets to purchase? Which bonds? 10 year? 30 year? Which commodities? Corn? Wheat? Copper? Crush? Lumber? Even if you decide which commodities, then how do you invest – futures? ETFs? mutual funds? Even if you decide how to invest, which specific future period, or which specific ETF? So you see Ray Dalio does not give away the secret sauce to his $180B+ All Weather Fund.
If you want advice on how to manage your money then go directly to the source – listen to Warren Buffet, Charlie Munger, Paul Tudor Jones (& yes, I know this guy gives therapeutic counseling to Paul), Stanley Druckenmiller, Joel Greenblatt, George Soros (minus his insider trading), Jim Rogers (more of a 10+ year, long term, investor), Peter Lynch, and Ray Dalio – just to name a few.
The following lists some great investing books that I read:
1. The entire Market Wizards series written by Jack Schwager (a great series if you want to get into heads of the greatest traders & consistently most profitable over the long term).
a. Market Wizards (1989).
b. The New Market Wizards (1992).
c. Stock Market Wizards (2001).
d. Hedge Fund Market Wizards (2012).
2. One Up On Wallstreet by Peter Lynch (a great read if someone wants to more actively research individual companies). 3. You Can Be a Stock Market Genius by Joel Greenblatt (on point if you want to manage your money & yes, I hate the book’s title but love the content – some readers of this book have gone on to become hedge fund managers).
4. Renaissance of a Stock Operator by Edwin Lefèvre (a classic).
5. The Rise and Fall of the Great Powers by Paul Kennedy (more of a long term, 50+ years, look on economic cycles).
6. Two great books on behavioral finance are The Crowd by Gustave Lebon and Extraordinary Popular Delusions and the Madness of Crowds by Charles MacKay.
7. Hot Commodities by Jim Rogers (gives some of the basics of commodities and hints at how to invest – expect to gain some insights but no where near enough to invest individually).
8. Investment Biker by Jim Rogers and Adventure Capitalist also by Jim Rogers (more entertainment than about investing – Jim traveled the world looking for undiscovered investments, twice).
9. Principle by Ray Dalio (about having the right mindset – not about investing directly).
10. A Random Walk Down Wallstreet by Burton Malkiel (I do not agree with author’s thesis but his own ideas help show the market acts inefficiently).
11. Common Stocks and Uncommon Profits by Phillip Fisher (about how to research companies to determine whether you should invest or not – fair warning, not the best writer but top notch material).
12. A Complete Guide to the Futures Market by Jack Schwager (if you want to invest or trade futures then you must read this book. If you can read through the book then you MAY have a chance at successfully investing or trading futures. Commodity investing firms used to require their new hires to read this book – some people quit their commodity jobs after reading several chapters).
13. Why the Best-Laid Investment Plans Usually Go Wrong & How You Can Find Safety & Profit in an Uncertain World
by Harry Browne (more about general ideas and its pitfalls – written in 1987 but directly applicable to today).
14. Why Stocks Go Up And Down : A Guide to Sound Investing by William Pike (about the accounting side of investing – people like Warren Buffet would say the most important part).
15. The Big Short by Michael Lewis and Liars Poker by Michael Lewis (both more entertaining than about how to invest).
16. Security Analysis by Benjamin Graham (1934 edition) (the bible of value investing – how to value companies. Ben was Warren Buffet’s mentor).
17. The Intelligent Investor by Benjamin Graham (basically about 40% of the same thing Security Analysis says).
18. A Treasury of Wall Street Wisdom by Harry Schultz (similar to Market Wizard series but not as in-depth but Harry interviewed the greatest investors between the early 1930s including Charles Dow – if you ever heard of the Dow Theory then this is the same guy).
You can also read all of Warren Buffet’s annual letters to his shareholders (going back to 1977) for free on the Berkshire Hathaway website (Buffet gives sage advice that is directly applicable to today). Importantly, Warren Buffet recommends that the average investor is better off investing in the S&P500 ETF (such as SPY) because a majority of the hedge funds, mutual funds, and individual investors under perform the S&P500. Why pay fees when most of them underperform.
On the other hand, even when Peter Lynch managed the Megellan Fund at Fidelity from 1977 to 1990 (the most successful mutual fund in the world), averaging 29% return per year (double the return of the S&P500), most investors who invested in the Megellan Fund lost money. How you ask? How in the world did most investors lose money when the Megellan Fund averaged 29% per year? Because when the fund was down, investors pulled money out (sold), and when the fund was up, investors piled money in (bought). In other words, the average investor’s physiological mind told herself (or himself) to sell low and buy high.
The crowd mentality and their delusions and the madness is in human nature that will unlikely change. I think most investors will continue to lose money as they search for the nonexistent “holy grail” to get rich quickly. When your neighbor tells you about a great stock to buy and how you cannot lose money then close your wallet and run the other way.
Looking at things another way, when everyone around you thinks the same thing and invests in the same thing, maybe you should ask yourself whether you are part of the herd that is about to get slaughtered.
Making money in the market is probably one of the hardest things you can do. People who say they are going to make money in the market on the side is like a someone saying they are going to make extra money on the side by performing brain surgery on the weekends. The average investor has a better chance of making the Olympics than consistently making money in the market. These are the harsh truths that people will refuse to listen to.
Thus, the market will continue to act irrationally and create bubbles such as the Tulip bubble, the South Sea Company bubble, the Dot-Com bubble, the 2007 Housing bubble, and the most recent bubble, the Bitcoin bubble (still in progress and not to be confused with blockchain technology).
I may have gone off on a tangent here but with so many great books out there, I do not see how you could have the time to waste reading this book.
*Generally About Me (it is fair to wonder who the author of this post is)*
I started investing when I was 19 years old (I blew multiple accounts and learned my investing lessons the hard way). In the past, I worked as an investment banker and stockbroker (I worked my way up from the bottom).
After spending over 10 years in the securities and financial markets, I began to understand how difficult it is to consistently make money in the market (if you look at the market and see dollar signs then you are in trouble; if you look at the market and see danger signs everywhere then you are on the right path).
For the last 5 years, my average annual return is 30%+ (S&P 500 is about 8.9%). However, you should not think that I easily averaged 30% per year. Quite the contrary. I spent countless hours researching and analyzing my investment ideas. I constantly thought about different scenarios. Even after I invested, I continued to research and analyze any new developments and re-assessed my own thoughts. I invested only if I 100% understood what I was doing. I invested only if the odds were significantly in my favor. Above anything else, I protected my capital. Even if it meant watching opportunities go by (and I watched many do so). In short, investing is not a hobby for me. It is my profession.
Investing is what I love to do (I know it sounds cliche). But if I did not love “the investing game,” I would have to be crazy to spend so much of my time and effort fighting through obstacles and problems to succeed. My love of the investing game is what kept me going where most other people gave up. I spend years trying to learn how to invest. Years. Think about that. Years. And I do not mean, on and off. I mean a majority of the 365 days.
I think this principle applies to almost anything in your life (not just investing). Do what you enjoy – not for the money, for the glory, not for the bragging rights, not for anyone else, not for anything — other than for youself.
