I’ve been meaning to blog about this book for awhile - the time has come.
Judging by the cover and existing reviews, I thought this book would be a typical collection of financial manias and panics. Fortunately, I got more than I bargained for; the book I would argue is written exclusively for contrarians and value investors. The central message is not so much about financial history, but the perils of group think (regardless of domain). The authors do make the classic stops citing tulipmania and the recent housing bubble; but they just as well cover behavioral finance, globalization, politics, and black swans.
As for the value investors here are some quotes to convince you of the authors’ savvy:
Below are some notes… Enjoy! (Click Here To Purchase The Book)
Miguel Barbosa, Sim Ole on Sense Reviews Mobs, Messiahs, & Markets
Judging by the cover and existing reviews, I thought this book would be a typical collection of financial manias and panics. Fortunately, I got more than I bargained for; the book I would argue is written exclusively for contrarians and value investors. The central message is not so much about financial history, but the perils of group think (regardless of domain). The authors do make the classic stops citing tulipmania and the recent housing bubble; but they just as well cover behavioral finance, globalization, politics, and black swans.
As for the value investors here are some quotes to convince you of the authors’ savvy:
[b]Now imagine that here were no financial times, no Barron’s, no commentators, and no one writing books predicting the future performance of the Dow. You’d have to rely only on your own eyes and ears, and your own wits. Investing would become a private matter.And it would be better for it. Why? Because useful intelligence decreases, like gravity by the square of the distance from the facts” p346[/quote][b]In the same vein, the further you get from your investments and the less you suffer the consequences, the worse your investments will be. That’s why collective investments like index-linked funds, mutual funds, hedge funds, insurance funds, and pension funds are usually so bad” The investor is too far from the facts and managers are too far from the consequences” p 347[/quote]I’ve read at least 40 books this year and this is the only one that resembles a roller coaster. Read this only if you are willing to cry, laugh, impeach presidents, and sell your stocks (at the right time).
“This is, of course, just another illustration of the general point that you must study your stock market investments as though you owned companies in their entirety. You need to understand the trends, weaknesses, and opportunities. Only then can you make a reasonable assessment of your return” p 349
“The best investments are those no one wants to sell” They are the investments that pay no commissions or fees, that have no managers, that give no press conferences, that issue no quarterly guidance” They are the ones you work hard to find” And they are the ones that private investors look for and often wait years to buy at a good price” p 356[/quote][b]“The investors who succeed are generally those who work hard at it and avoid getting caught up in manias. In fact, only lazy investors are ever “ in the market” the more serious they are the more they are out of the market and into specific companies that they know quite well” p 357
“Wait for a downdraft in stock markets or an updraft in hypocrisy. Then it will be time to buy” -p358
Below are some notes… Enjoy! (Click Here To Purchase The Book)
