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4.12 AVERAGE
4.12 AVERAGE
I will say, reading an investment book wasn't as bad as I thought it would be, although this particular one (courtesy of my local used bookstore) is dated.
I think Mr. Bernstein does a good job of making clear some bigger picture investment points to the reader. Low Risk = Low Reward, which means that High Risk = High Reward...and a good chance of ending up poor. Individual stock or fund performance is irrelevant - your portfolio as a whole is what matters. Popular, frequently touted stocks are undoubtedly overpriced as everyone is buying them. And perhaps most importantly, investing is as much a psychological battle against one's self as anything else (i.e., people tend to panic in downturns and sell at a steep loss). He conveys all of this information with good historical context, relatively easy to follow math, and logical narratives.
What is dated? Well, almost the entirety of chapters 9 and 10 are irrelevant with the advent of online trading platforms and the vast decrease in expense ratios. Chapter 11 has some valid points about being critical of your information sources, but that advice is not peculiar to the finance industry. Also, there is vastly more information available through many more outlets, so completely shunning all financial news because "It is of no use to you." is simply throwing out the baby with the bath water. Not to mention it is a corollary of the main issue I have with this book.
So what really detracts from the quality of this book, is Mr. Bernstein's irrational hatred of brokers. If you can, try to shunt his bitter vitrol into a category of the rambling rantings of an old man. Unfortunately, his constant beggaring of the profession reduces the logical, scholarly gravitas of his other observations. Clearly, he was burned at some point and is on a crusade to lambast the entire stock trader establishment. Get's old after the tenth time. Not to mention I am always leery of people that deal in absolutes.
At any rate, I am actually glad I picked up this book and I did learn quite a bit. It wouldn't be the first book I would recommend to someone planning to start investing on their own, but it is probably worth having in your investing library. Solid 3 stars.
I think Mr. Bernstein does a good job of making clear some bigger picture investment points to the reader. Low Risk = Low Reward, which means that High Risk = High Reward...and a good chance of ending up poor. Individual stock or fund performance is irrelevant - your portfolio as a whole is what matters. Popular, frequently touted stocks are undoubtedly overpriced as everyone is buying them. And perhaps most importantly, investing is as much a psychological battle against one's self as anything else (i.e., people tend to panic in downturns and sell at a steep loss). He conveys all of this information with good historical context, relatively easy to follow math, and logical narratives.
What is dated? Well, almost the entirety of chapters 9 and 10 are irrelevant with the advent of online trading platforms and the vast decrease in expense ratios. Chapter 11 has some valid points about being critical of your information sources, but that advice is not peculiar to the finance industry. Also, there is vastly more information available through many more outlets, so completely shunning all financial news because "It is of no use to you." is simply throwing out the baby with the bath water. Not to mention it is a corollary of the main issue I have with this book.
So what really detracts from the quality of this book, is Mr. Bernstein's irrational hatred of brokers. If you can, try to shunt his bitter vitrol into a category of the rambling rantings of an old man. Unfortunately, his constant beggaring of the profession reduces the logical, scholarly gravitas of his other observations. Clearly, he was burned at some point and is on a crusade to lambast the entire stock trader establishment. Get's old after the tenth time. Not to mention I am always leery of people that deal in absolutes.
At any rate, I am actually glad I picked up this book and I did learn quite a bit. It wouldn't be the first book I would recommend to someone planning to start investing on their own, but it is probably worth having in your investing library. Solid 3 stars.
Really, really good overview of the mindset you need to take on investing. Highly recommend. Has a lot of other good book recommendations which is helpful.
Excellent book on investing! I think this book is one that everyone who manages their own finances should read and all financial advisers should read as well! Highly recommend! I think this will be an excellent reference book to keep on my shelf.
Widely considered as the bible of investing principles, this book provides the reader with a nice foundation of investment theory. It outlines the main pitfalls to avoid when dealing with different investment market players.
This was an excellent introductory book to investing. It explains some basic history of the financial systems and markets, mutual funds and why you should stay away, the benefits of investing in index funds, asset allocation, and many other things. It's an easy read and you come away feeling very informed.
informative
The Four Pillars of Investing was a poor name for this book because it cojures the image of a rock-solid investment strategy based on complementary principles that, properly balanced, support a lifetime of strong returns regardless of the vagaries of the market.
A better name would be "Four Things Everyone Should Know About Investing". This name is so much better that I will refer to this book as FTESKAI for the rest of the review.
FTESKAI is not a book for someone who just wants to be told where to invest their money. The author appears to have already written one of those. It is, more than anything, a history lesson, so if you don't like history, you won't like FTESKAI.
As a history lesson, though, it is wonderful. The writing is witty, the pace brisk, and you can't help but feel as though you're listening to someone who's about to become your favorite economics professor. It's a walk through just enough math and history to make you understand the basics of investment, which have changed shockingly little since people started keeping records. I think this was the biggest takeaway for me from the whole of FTESKAI.
A few nits: the author tries so hard to explain the math in plain English that if you're someone who can actually read math you'll find yourself getting lost and wishing he would just show you the equation. The asset allocation bits are little thin, too; the author just gives a few scenarios and how he'd allocate assets for them without providing much explanation.
Perhaps for me the most challenging part of this book is applying its principles when they have become so mainstream. When it was written, the cry to invest in low-cost index funds was probably a lone voice in the desert comparable to that of John the Baptist. Now almost everyone seems to know that this is the smart move. If almost all investors dump money soley into index funds, what does that do to the market?
It's hard to take the exhortation to "presume that the conventional wisdom is wrong" when the book has become the conventional wisdom.
A better name would be "Four Things Everyone Should Know About Investing". This name is so much better that I will refer to this book as FTESKAI for the rest of the review.
FTESKAI is not a book for someone who just wants to be told where to invest their money. The author appears to have already written one of those. It is, more than anything, a history lesson, so if you don't like history, you won't like FTESKAI.
As a history lesson, though, it is wonderful. The writing is witty, the pace brisk, and you can't help but feel as though you're listening to someone who's about to become your favorite economics professor. It's a walk through just enough math and history to make you understand the basics of investment, which have changed shockingly little since people started keeping records. I think this was the biggest takeaway for me from the whole of FTESKAI.
A few nits: the author tries so hard to explain the math in plain English that if you're someone who can actually read math you'll find yourself getting lost and wishing he would just show you the equation. The asset allocation bits are little thin, too; the author just gives a few scenarios and how he'd allocate assets for them without providing much explanation.
Perhaps for me the most challenging part of this book is applying its principles when they have become so mainstream. When it was written, the cry to invest in low-cost index funds was probably a lone voice in the desert comparable to that of John the Baptist. Now almost everyone seems to know that this is the smart move. If almost all investors dump money soley into index funds, what does that do to the market?
It's hard to take the exhortation to "presume that the conventional wisdom is wrong" when the book has become the conventional wisdom.
The current GME stuff is fascinating in a sociological way, but there are going to be some big surprises for some.
My gems:
P45 speculation vs. investment vs. purchase
P102 “most of the investment industry is engaged in non-productive work
P159 “The burnt customer certainly prefers to believe that he has been robbed rather than that he has been a fool on the advice of fools.”
P171 “one of the most deadly investment traits is the need for excitement”
P179 shopping list of maladaptive behaviors-- herd mentality, overconfidence, recency, the need to be entertained, myopic risk aversion, the great company/great stock illusion, pattern hallucination, mental accounting, and the country club syndrome
“Minimize your chances of dying poor”
P185 “there is nothing new in the markets, only the history you haven’t read”
P196 “the average broker is a salesman, not an expert in finance.”
P201 “what is best for the client is to keep investment costs and turnover as low as possible, which also minimizes a broker’s income"
P220 “you can only write so many articles that say “buy the market, keep your costs down, and don’t get too fancy.””
P223 “The surprising thing is that the news you need to know is mostly old--sometimes very old.”
My gems:
P45 speculation vs. investment vs. purchase
P102 “most of the investment industry is engaged in non-productive work
P159 “The burnt customer certainly prefers to believe that he has been robbed rather than that he has been a fool on the advice of fools.”
P171 “one of the most deadly investment traits is the need for excitement”
P179 shopping list of maladaptive behaviors-- herd mentality, overconfidence, recency, the need to be entertained, myopic risk aversion, the great company/great stock illusion, pattern hallucination, mental accounting, and the country club syndrome
“Minimize your chances of dying poor”
P185 “there is nothing new in the markets, only the history you haven’t read”
P196 “the average broker is a salesman, not an expert in finance.”
P201 “what is best for the client is to keep investment costs and turnover as low as possible, which also minimizes a broker’s income"
P220 “you can only write so many articles that say “buy the market, keep your costs down, and don’t get too fancy.””
P223 “The surprising thing is that the news you need to know is mostly old--sometimes very old.”
Alguna cosa interesante, con partes muy densas, técnicas y aburridas. Estaba bastante dirigido a estadounidenses asique alguna cosa no se aplicaba mucho a mi caso, aunque otras cosas son bastante útiles. Ha habido partes que me he saltado.
Well . . . not exactly a literary masterpiece, but this is an extremely well-written and readable primer on long-term investing that I wish I had read twenty years ago . . . I will recommend it to my friends who are managing retirement portfolios, and to my children who haven't even thought about saving money for retirement yet.