# Good Books On Investing ?



## trajan (4 Jun 2021)

I did something very foolish lately.
I bought Bogle's _Common Sense Investing_.
Such rubbish. Badly written - ambiguous phrasing, no definitions of several concepts let alone how to estimate them. A mash of Dale Carnegie big shot quotes backing up a relentless drum-roll for his own funds. Infantile models of investment portfolio planning.

Can anyone suggest better for someone who has no macroeconomics background but okay on microeconomics and handy enough at spreadsheets, math models and coding ?


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## Marc (4 Jun 2021)

Lol. One of the most influential investment books ever.

You’re gonna love a random walk down Wall Street Burton Malkiel


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## joe sod (4 Jun 2021)

Rory gillens book " three steps to investing success", I haven't read it myself but it has good reviews and is written from an Irish perspective which is rare enough as most are written for Americans or UK perspective.


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## trajan (4 Jun 2021)

Thanks, Marc.
Yet looking through Malkiel's bio, it seems that his path never strayed too far from Bogle's.
More academic for sure - but not much use to the older investor looking for a serious booster shot to their portfolio.


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## Sarenco (4 Jun 2021)

Security Analysis by Graham & Dodd is Buffett's investing bible.


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## Marc (4 Jun 2021)

Ok then try winning the losers game by Charlie Ellis

what you’ll find is that all these books will consistently tell you that what I think you’re trying to do can’t be done






						How to Win the Loser's Game: Full Version
					

A full-length documentary, How to Win the Loser's Game provides ordinary investors with the information they need, and challenges the investing industry to offer consumers a fairer deal.



					sensibleinvesting.tv
				




Marc Westlake
Chartered Certified and European Financial Planner
www.globalwealth.ie


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## NoRegretsCoyote (4 Jun 2021)

John Kay's "The Long and the Short Of It" is non technical but I liked how he set out the principles.


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## trajan (4 Jun 2021)

_Rory Gillen's book " three steps to investing success", I haven't read it myself but it has good reviews and is written from an Irish perspective which is rare enough as most are written for Americans or UK perspective._

I had a glance through this book's Kindle edition on Amazon. 
Lucidly written and mostly reasonable. 
But figures a bit wrong for intro example of €250 a month investment over 5 years @ 8% APR.
He makes it €19,008 and my spreadsheet makes it €18,353.
Maybe worth a look although it does tend to stress long-term sitting on a portfolio.

@Marc:
I do not challenge what you say in relation to large plcs on stock markets.
But I was more hopeful of growth within the AIM type markets and maybe unlisted anywhere companies.

@ Other posters: Thanks for books. Will run though them online or in bookshop.

Hope all get fine sunny weather this weekend.


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## Marc (4 Jun 2021)

Same arguments apply for private equity


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## SDMXTWO (4 Jun 2021)

Rich Dad, Poor Dad: https://amzn.to/3plU0mn


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## jpd (4 Jun 2021)

trajan said:


> He makes it €19,008 and my spreadsheet makes it €18,353.


The difference is in how you assume the compounding happens - monthly, annually, daily


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## trajan (4 Jun 2021)

Au contraire, sir. 
Doing it monthly seems the only way to do it if the deposits are made.
But you have to use the monthly period rate doing it this way.


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## jpd (4 Jun 2021)

Rory took the simpler way and just added the investment return annually - in any case, the exact mechanics are not that important as the returns are never as steady as that in real life and perhaps, he felt his target market would not be familiar with monthly compounding calculations

1​3000.00​240.00​3240.00​2​6240.00​499.20​6739.20​3​9739.20​779.14​10518.34​4​13518.34​1081.47​14599.80​5​17599.80​1407.98​19007.79​
At the end of the day, it's the strategy followed that's important


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## TheBig40 (4 Jun 2021)

Edward Qian’s Risk Parity Fundamentals is a bit more on the academic side but very readable. Lot of stuff on how you might not be as diversified as you think you are and the mistakes people make on how closely correlated their investments are.

I also like A Simple path to wealth by JL Collins but it’s basic a book version of the blog telling you to buy index funds.


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## galway_blow_in (5 Jun 2021)

SDMXTWO said:


> Rich Dad, Poor Dad: https://amzn.to/3plU0mn


Complete rubbish


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## SDMXTWO (5 Jun 2021)

galway_blow_in said:


> Complete rubbish


The book was referred to me and I have yet to do a follow up. Can you give any reasons why it is so bad?


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## trajan (5 Jun 2021)

Risk Parity Fundamentals eBook : Qian, Edward E.: Amazon.co.uk: Kindle Store
					

Risk Parity Fundamentals eBook : Qian, Edward E.: Amazon.co.uk: Kindle Store



					www.amazon.co.uk
				




This looks thorough numerically.
The fact that the first edition is sold out and used print copies are fetching $80 speaks for itself.


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## Marc (5 Jun 2021)

Subscribe to read | Financial Times
					

News, analysis and comment from the Financial Times, the worldʼs leading global business publication




					www.ft.com
				












						While Report Knocks Risk Parity, Vendors Defend Approach as a Philosophy | Chief Investment Officer
					

<em>A research report by Dimensional Fund Advisors claims risk parity fails to outperform over the long-term, but vendors defend the investment approach.</em>




					www.ai-cio.com


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## Gordon Gekko (5 Jun 2021)

The Behavior Gap by Carl Richards


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## galway_blow_in (5 Jun 2021)

SDMXTWO said:


> The book was referred to me and I have yet to do a follow up. Can you give any reasons why it is so bad?



hes  the kind of " guru " who tell people if they shop in Aldi for everything and drive a Dacia , they will eventually become millionaires , a collection of bogus parables posing as investment wisdom , their is no real credible  investment advice in the thing


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## NotMyRealName (5 Jun 2021)

Fooled by Randomness....Nassim Nicholas Taleb. 
The hidden role of chance in life and the markets.


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## trajan (6 Jun 2021)

@NotMyRealName 

Fascinating once you see through the philosophical and literary pretensions and start thinking about our old friend, the Cauchy distribution.


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## cremeegg (6 Jun 2021)

Jim Slater's The Zulu princpal

Although Jim got himself into many a scrape, the ideas in the book stand the test of time. 

The Zulu principal is simply to do research, become an expert on a small number of companies. The idea is to ask yourself what do you know about the Zulus, probably less than you could write on a page. If you were to read a book about the Zulus you wold probably know more than the vast majority of people know about the Zulu's. Becoming more expert than the market on a small number of companies is not that difficult.

The second idea is the PEG. This is the price/earnings ratio divided by the growth rate. So a company with a P/E of 10 and annual profit growth of   10% has a PEG of 1.


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## Laughahalla (6 Jun 2021)

If you are really talking about trading then try Mark Minervini. Trade like a stock market wizard.

He puts a lot of his success down to managing risk. 
Knowing when to enter a trade and knowing when to exit a trade .Ever before you invest one penny have a plan to exit and stick to it.


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## joe sod (7 Jun 2021)

cremeegg said:


> The Zulu principal is simply to do research, become an expert on a small number of companies. The idea is to ask yourself what do you know about the Zulus, probably less than you could write on a page.


But becoming an expert on the Zulus doesn't mean you will come to the correct conclusions, the " Zulus" maybe in an industry that never takes off or becomes mainstream. I know from history the Zulus turned out to be winners but what if they turned out to be losers even though you were an expert on them. In any case the zulus are not exactly an obscure topic sure wasn't there a famous film "Zulu" from the 1960s with Michael Caine.


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## BigBoots82 (7 Jun 2021)

The Intelligent Investor by Benjamin Graham


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## Gordon Gekko (7 Jun 2021)

joe sod said:


> But becoming an expert on the Zulus doesn't mean you will come to the correct conclusions, the " Zulus" maybe in an industry that never takes off or becomes mainstream. I know from history the Zulus turned out to be winners but what if they turned out to be losers even though you were an expert on them. In any case the zulus are not exactly an obscure topic sure wasn't there a famous film "Zulu" from the 1960s with Michael Caine.


And tell it to all the people who sat in their kitchens and attics pouring through Tesla’s financial statements and shorting the stock…they probably thought of themselves as “experts”!

Interestingly, I see Slater co-sponsored the 1972 Fischer vs Spassky Chess World Championship. Now there’s a fascinating character (Fischer). As a further aside, I’d recommend that people watch ‘The Queen’s Gambit’ on Netflix; it’s superb. It has nothing to do with Bobby Fischer per se, but I love reading stories about chess players who think they’ve come up against him online.


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## trajan (7 Jun 2021)

I'm reading about - and not liking - how Slater did his thing.
But the idea of studying in depth the companies in which to invest is a rock sound one.
Especially for people who are professional users of the products/services marketed by the company invested in.
Naturally, the reading of financial statements is more one for a professional so that has to be lain off to friends.


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## Sarenco (7 Jun 2021)

So you are planning to study companies in depth without reading their financials.

interesting approach...


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## trajan (7 Jun 2021)

trajan said:


> Naturally, the reading of financial statements is more one for a professional so that has to be lain off to friends.



Did you miss this bit, Sarenco ?


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## Gordon Gekko (7 Jun 2021)

DIY investing on a single stock basis is largely eejitry in my humble view.


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## trajan (7 Jun 2021)

For most people - those who haven't the time to keep up with the homework nor the pros to study financials nor contacts within the companies - that's true. For all people investing on behalf of others it's true.
But some have made it work, clawed back respectable takings from it and put that into index funds and such-like.
Many millionaire farmers in Ireland are single-stock investors - though that is through necessity of originally being shareholders in their local creamery co-op and success therefrom.


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## Gordon Gekko (7 Jun 2021)

trajan said:


> For most people - those who haven't the time to keep up with the homework nor the pros to study financials nor contacts within the companies - that's true. For all people investing on behalf of others it's true.
> But some have made it work, clawed back respectable takings from it and put that into index funds and such-like.
> Many millionaire farmers in Ireland are single-stock investors - though that is through necessity of originally being shareholders in their local creamery co-op and success therefrom.


And if a hundred of us call a series of coin-tosses, after a number of iterations, there’ll still be some people who’ve been “right” every time.

I am very wary of the DIY investment approach; in my view it smacks of being penny wise and pound foolish or even worse of megalomania. Either buy an ETF or pay someone reputable who has a good track record and who charges a fair fee to manage your money for you.


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## joe sod (7 Jun 2021)

trajan said:


> Many millionaire farmers in Ireland are single-stock investors - though that is through necessity of originally being shareholders in their local creamery co-op and success therefrom.


I doubt those farmers are experts on the financials of the co ops they are invested in, they just got lucky that those co ops turned out to be mostly successful, and they benefited from not selling their shares probably because they never handed out cold hard cash for them in the first place, they were more interested in the price they received for their produce by those co ops. The strategy of having just one stock that you work for didn't work out to good for the banks shareholders during financial crash, also happened during the dot com crash where some tech companies were wiped out. The worker shareholders would have been experts in the technology of the company but it still did not benefit them during the crash.


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## trajan (7 Jun 2021)

Gordon Gekko said:


> Either buy an ETF or pay someone reputable who has a good track record and who charges a fair fee to manage your money for you.



@Gekko 

How many advisers out there would have much more than QFA ?
Those who have CFA . . . I would wonder how many of them fully understand the investment models involved.
And what is a *fair fee* ? A percentage of the fund annually plus a percentage of the annual gain aggregated over a surrounding 5 years ?
It can't be easy to show an index fund's putative spreadsheet (ignoring fees, of course)  to an investor and have him see just ~ 4 times his total contribs after a long 30 years. And that's saying nothing about inflation which will halve the fund's purchasing power.


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## trajan (7 Jun 2021)

joe sod said:


> because they never handed out cold hard cash for them in the first place, they were more interested in the price they received for their produce by those co ops.



By God they *did* have to hand out hard cash for their shares !

They had to buy their co-op shares at the nominal price, e.g. £1 - when a pound was hard to have. Remember that the successful co-ops had to devise whole new products beyond mere bottled milk, butter and cheese. Even where they did, local banks would only commit after a commitment by farmers to so much stock in the new entity.

There were benefits for bold primary shareholders like bonus shares for doubling up in year 2 and many availed of that. But all shares bar the bonus ones (at most ~ 5% of total shares paid for) had to be paid for in hard cash. And held in all times with Mickey Mouse dividends till the co-op went public and needed to reduce the % ownership of the co-op shareholders. Only then were plc shares received - and in small amounts.


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## Gordon Gekko (7 Jun 2021)

trajan said:


> @Gekko
> 
> How many advisers out there would have much more than QFA ?
> Those who have CFA . . . I would wonder how many of them fully understand the investment models involved.
> ...


The QFA designation is neither here nor there. That’s more for bank tellers rather than investment professionals. If I was looking for investment advice, I’d want to see a team of CFAs, CFPs, tax consultants, and maybe even a lawyer. I’d look for a holistic wealth management service.

In terms of what’s fair, that depends. An annual fee plus a percentage of any gains would be closer to the hedge fund model and wouldn’t be in the best interests of the client as it incentivises excessive risk taking.

I pay headline fees of circa 0.5% in the knowledge that there are other costs in there. I believe that the “zone of reasonableness” for fees is 0.4-1.0% depending on the amount with no transaction commission, no exit penalties, and no contribution charges.


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## trajan (7 Jun 2021)

Gordon Gekko said:


> I pay headline fees of circa 0.5% in the knowledge that there are other costs in there. I believe that the “zone of reasonableness” for fees is 0.4-1.0% depending on the amount with no transaction commission, no exit penalties, and no contribution charges.



Even if you finally come down in favour of a 20 year residency in Vanguard 500 which supposedly has fees of ~ 0.2 % ?


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## Gordon Gekko (7 Jun 2021)

trajan said:


> Even if you finally come down in favour of a 20 year residency in Vanguard 500 which supposedly has fees of ~ 0.2 % ?


Yep, because advice can relate to making people stay the course, tax efficiency, retirement planning, estate planning, etc


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## trajan (7 Jun 2021)

@ Gekko

I take it the fees for purchasing blocks of a fund, e.g. broker commissions, are all on top of your own fees ?
If it's say €250 a month over 30 years, how do the fees work out ? Do people get charged 1.5% of €250 per month or what ?


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## Gordon Gekko (7 Jun 2021)

trajan said:


> @ Gekko
> 
> I take it the fees for purchasing blocks of a fund, e.g. broker commissions, are all on top of your own fees ?
> If it's say €250 a month over 30 years, how do the fees work out ? Do people get charged 1.5% of €250 per month or what ?


Nope, I would not tolerate broker fees (as I said earlier).

I’m happy to pay an AMC in the knowledge that fully loaded it’s a higher number (i.e. TER, or whatever you’d like to call it).


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## Sarenco (7 Jun 2021)

trajan said:


> Did you miss this bit, Sarenco ?


Nope.

Active fund managers have found it increasingly difficult to generate alpha over recent decades (even before costs).  The primary reason for this is that the overwhelming majority of money invested in stocks is now professionally managed.  In other words, there is far less dumb money left to exploit.

But, hey, it’s your money...


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## trajan (7 Jun 2021)

I wonder.
I know that in China it's not odd to find retired grandmother's playing the stock market online.
We aren't as far gone as that yet here   but having an old punt on company shares is common enough in the countryside by older guys.
It's hard to know what the many young professionals - especially economists, accountants, mathematicians, etc - are doing privately but I doubt if they are losing money to advisers if they can do a share of the analysis and trading themselves. It may be a risk that they are willing to take.

Anyhow, thanks to all of you who made such interesting and varied suggestions for better alternatives to Jack Bogle's book.
Here's to Jack  !


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## presidenttttt (26 Jun 2021)

I was hoping for a good book recommendation, but looks like you all trashed every recommendation!


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## trajan (26 Jun 2021)

Read page one again closely. I thumbed up a few of them.
I have no problem with the Taleb collapse-hedge idea either - makes sense after Black Monday, Kobe Earthquake financial aftershock, etc.
But I won't have a recommendation till I read them of course.
Maybe you can pursue reviews/opinions from the recommendations' respective posters ?


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## presidenttttt (27 Jun 2021)

Marc said:


> Ok then try winning the losers game by Charlie Ellis
> 
> what you’ll find is that all these books will consistently tell you that what I think you’re trying to do can’t be done
> 
> ...


Watched this, had actually seen it before. Would like to have seen some more arguments from active fund managers defending their approach. This should be shown to everyone before they leave school though, it is worth more than the 12 or 13 years i spent learning Irish.


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## presidenttttt (27 Jun 2021)

BigBoots82 said:


> The Intelligent Investor by Benjamin Graham


seems to be top of numerous investor book lists.


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## Marc (27 Jun 2021)

presidenttttt said:


> Watched this, had actually seen it before. Would like to have seen some more arguments from active fund managers defending their approach. This should be shown to everyone before they leave school though, it is worth more than the 12 or 13 years i spent learning Irish.


Active management jumped on something called “active share” a few years ago in an attempt to rebut the rise of passive investing.

essentially this says that the more your portfolio deviates from an index the more opportunity you have to add value.

whilst it is axiomatic that in order to beat an index one has to hold a portfolio which differs from the index, it’s just as likely that the active managers portfolio will underperform by holding losing stocks as they are to outperform from holding winning stocks.

when fund managers results are analysed in aggregate their results form a standard bell curve but skewed to the left of the index by the aggregate amount of their fees and expenses.

In other words, if you pick a manager at random you should expect that they will underperform the market by the amount of their additional fees.

of course you could be lucky and pick a winning manager but how do you reliably identify in advance which managers will outperform in the future.

there is no reliable way of doing this and therefore the conclusion should be that, yes. some managers will beat the market but no more than you would expect by pure random chance and therefore the rational decision that investors should make is to buy the market via an index fund


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## bunny_ (28 Jun 2021)

The best book on investing? The tax code... know the tax code inside out and you will avoid CGT/IHT/CT where possible... and that's worth more than any book can ever teach you...

Rich Dad, Poor Dad - Tax Free Wealth is the best of a bad lot of books (full of bragging with little detail - mostly because the federal tax code is 2,600 pages in the US much less other states & places around the world) --- if you're a beginner and have got time to spare then it's worth a look to begin with, but then you need to look at the companies act and elsewhere to get down to something worthwhile...

If you are strictly talking an investment book then I would say "The Intelligent Investor" would be the best out of non-index investing...


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## trajan (29 Jun 2021)

Marc said:


> of course you could be lucky and pick a winning manager but how do you reliably identify in advance which managers will outperform in the future.



I suppose you could ask to see historical performance of the fund manager's funds . . . .
But it is most distressing indeed to hear it opined so often that one can't do better than the market.
Because this implies that all the average punter can hope to reap in their pension is ~ 8% compound, i.e. a doubling of funds in 10 years.


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## jpd (29 Jun 2021)

By definition the market return is what you should expect before deducting costs & fees

Obviously some fund managers will do better than the average, but equally some will do worse than average.

If only you could know which ones will do better before investing 

An 8% return (before inflation) is not bad - I'd sign up any day


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## Marc (29 Jun 2021)

trajan said:


> I suppose you could ask to see historical performance of the fund manager's funds . . . .
> But it is most distressing indeed to hear it opined so often that one can't do better than the market.
> Because this implies that all the average punter can hope to reap in their pension is ~ 8% compound, i.e. a doubling of funds in 10 years.


You can expect to do better than the market but not without assuming more risk


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