Alpha Teach Yourself Investing in 24 Hours [Paperback]

Kenneth E. Little (Author)

Book Description

Series: Alpha Teach Yourself in 24 Hours | Publication Date: May 18, 2000

Beginner and novices interested in the basics of investment, finance, retirement; participants in company investment plans.

Editorial Reviews

From the Back Cover

Beginner and novices interested in the basics of investment, finance, retirement; participants in company investment plans.

About the Author

Kenneth E. Little is a long-time editor and investment and economic specialist who now edits the popular Guide to Investing for Beginners at about.com. He is a former president of the San Antonio Economic Development Foundation and helped charter and run the investment division of USAA Federal Savings Bank. He was also business editor of the San Antonio Journal for nine years.

Product Details

• Paperback: 400 pages
• Publisher: Alpha; 1 edition (May 18, 2000)
• Language: English
• ISBN-10: 0028638980
• ISBN-13: 978-0028638980
• Product Dimensions: 9 x 7.3 x 1 inches
• Shipping Weight: 1.4 pounds (View shipping rates and policies)
• Average Customer Review: 4.7 out of 5 stars  See all reviews (3 customer reviews)
• Amazon Best Sellers Rank: #1,402,478 in Books (See Top 100 in Books)

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Customer Reviews

Most Helpful Customer Reviews

5 of 5 people found the following review helpful:

4.0 out of 5 stars Hands-on, practical guide for a middle-aged amateur investor, May 28, 2007

By 

Vasiliy Zhulin (bay area, CA USA) - See all my reviews
(REAL NAME)   

This review is from: Alpha Teach Yourself Investing in 24 Hours (Paperback)

This book is a broad introduction to the concept of investing. It is broken into five major sections:

1. Getting Started, which talks about goals, credit card debt, budgets, and basic investment vehicles
2. Doing the Research, which discusses retirement plans and ways to find information you need to invest
3. Mutual Funds, Stocks, and Bonds, which finally dives into the details on those investment vehicles
4. Making Choices, which introduces various investment strategies
5. Working Toward a Goal, which wraps things up with portfolio examples, the level of participation in your investments, and retirement

First off, I want to note the author's tone and his style of writing - Little presents information in a very easy-to-understand manner, with simple examples and witty jokes. The book does not feel tedious, and you can fly through it quickly.

Each of the five sections consists of multiple chapters, which Little calls "Hours." The idea is that you can, of course, learn about investing in 24 hours - so there are 24 chapters. At the end of each chapter is a hands-on workshop and a quiz. While the quizzes are basically a joke (the answer choices are beyond obvious), the workshops are a great practical way to get your hands dirty and start looking at the wealth of information available to investors. Little provides multiple websites (although some are, of course, outdated) and other ways to get the information you need. I suggest you follow through some of the book's workshops - i.e. look over some annual reports, think of investment goals, etc.

A big plus for this book is that it provides very practical information. It describes (although very briefly) the financial documents that a company publishes (balance sheet, income statement, cash flow) and some ways that companies can be evaluated using some basic ratios - EPS, P/E, PEG, P/S, etc. Unfortunately Little does not spend a lot of time on how to use these values to help determine the financial strength of a company. He just instructs the reader to compare the values to those of other companies in the same sector/industry.

In Hour 6, the diagrams used to demonstrate how to read stock/fund price changes are unfortunately botched in a major way. The columns are not wide enough, and values are truncated or carried over to the next line. This is very confusing. In addition, some of the columns referenced in the text don't seem to exist at all in the diagrams. This is a huge miss by the editors - very disappointing.

While Little attempts to target a very broad audience by demonstrating investment strategies, goal planning, and risk management for various age groups, the overall feel of this book is that of one written for a very specific group of people: individuals who are suddenly realizing that retirement is not so far off - and that it's time to start planning for it.

Little constantly reinforces the notion of tax-protected accounts (i.e. the 401k and the IRA family) - yes, we get it, it's nice to have tax-deferred and even tax-free growth, but some of us would like to use the money we make before retirement. Little furthermore explicitly recommends moderate-risk investment strategies (even though he describes aggressive strategies, as well), spending many pages on why mutual funds are great. He also has a section on how to get rid of credit card debt and find money in your budget to begin investing. Finally, Little targets "retirement" as the example of every long-term goal he discusses.

Don't get me wrong - Little does an excellent job making the reader comfortable with the notion of investing. He stresses again and again that you don't have time to lose - and you need to start NOW. But it always feels like he's addressing the middle-aged individual who needs to get his/her finances in order and start thinking about retirement.

I wish Little would spend more time on stocks rather than concentrating so much on mutual funds. He groups stocks into 3 very broad categories - value, growth, and income. While this might be the way that some mutual funds label their holdings, I feel that this classification of stocks is a gross oversimplification. Peter Lynch does a much better job of this in his One Up on Wall Street. But then again, Little's goal is not to teach the reader everything about stocks - but rather get him/her familiar with the basics. His ultimate advice is to go with stock index funds rather than individual stocks.

Finally, I wish Little would spend a bit more time on advanced topics such as options, futures, and shorting. He defines each concept, but he dismisses these vehicles as overly risky - yet he doesn't describe the risks very well. He also mentions that options can be a good hedge to protect your investments, but he stops there. I feel that Little could have spent more time describing HOW to use these vehicles, and WHY they can be so risky. Simply saying that, in options trading, you could lose all of your investment (meaning the premium) is not enough.

In conclusion, I have mixed feelings about the book. I was very skeptical half-way through, but the book picked up in the middle and taught me some things I didn't already know - so I am glad I finished it. It got me to look at a balance sheet for Goldman Sachs and try to figure what's going on. However, keep in mind that, unless you have absolutely no knowledge of investment vehicles and their markets, this book will not teach you a lot. It will get you started - perhaps you will muster up the guts to invest into an S&P 500 index fund via your 401k plan... but to do anything else, you will need more. Nevertheless, if you are new to investing and are realizing that retirement is not far away, this is a great book to get you started.

Pros:
+ easy and quick read, lots of examples, witty jokes
+ practical information - financial docs, stock ratios, general tid-bits of advice, examples of portfolios
+ useful workshops that make you try things on your own

Cons:
- diagram errors in Hour 6
- some things are repeated many times
- could spend a lot more time on stocks and on advanced topics (options, futures)
- feels like it's targeted for a very specific audience

4 of 4 people found the following review helpful:

5.0 out of 5 stars Exceptionally organized, easy to follow and read. A joy of a book!, August 2, 2006

By 

Benjamin Celeste Franklin (Portland, OR) - See all my reviews

This review is from: Alpha Teach Yourself Investing in 24 Hours (Paperback)

Congratulations to Mr. Little for having written a fantastic easy-to-get-through primer on the investing world. All essentials are explained and explained WELL, and no relevant terms are left out. For an investing manual, this read went by fast!

The author didn't make you feel like a dummy, even though the subject matter could've easily led to a condescending approach. Ken Little's tone was like that of a friend. Examples: "Don't get too hung up on being precise with these terms, because their definitions are very fluid. Toward the end of this hour we will introduce you to a widely accepted way of classifying mutual funds that is not arbitrary." (page 163); "The lesson here is that you shouldn't get tripped up over broad terms such as 'growth' when considering stocks. If you want an objective determination, use one of the several systems available, such as Morningstar.com. This will help you compared like stocks and avoid ridiculous questions such as, 'Should I buy AT&T or Amazon.com."

The book was divided into 24 chapters, with each chapter organized to take up one hour of time for the average reader to get through. And because this book is sincere in trying to get the reader to learn and be serious about what he has just read, every chapter/hour has a short multiple-choice quiz to test the reader's understanding and retention of the material for that chapter. That's a nice touch.

This book takes a proactive stance in getting the amateur investor up and running. For beginners who are intimidated about getting their feet wet and those who don't know where to start, the book frequently offers lists of "5 things you can do today."

This book is a great instruction manual for novices, a good reference guide, and is very well-crafted. Bravo.

2 of 5 people found the following review helpful:

5.0 out of 5 stars #1 On Investing, January 15, 2007

By 

Napoleon Echols "Poyen" (Chicago, Ill) - See all my reviews
(REAL NAME)   

Amazon Verified Purchase

This review is from: Alpha Teach Yourself Investing in 24 Hours (Paperback)

One of the best books. The best book I ever read on Investing. You will LOVE this book. You will learn a LOT! I HIGHLY RECOMMEND IT.