Customer Reviews

The Battle for Investment Survival

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I've read many recently published books on how to profit from the financial markets. Too many of them leave me feeling like I wasted my time and money.

I decided to go back to the "classics"--Schabacker, Edwards and Magee, Graham, Hamilton, Rhea, and of course, Gerald Loeb.

The more I read these "classics" of investment literature, the more I see the market hasn't fundamentally changed at all. All of those books have taught me something important, but I will always have Loeb's "Battle for Investment Survival" close to the top of my list.

Loeb demonstrates he is fundamentally honest. Unlike most books, that get you to think becomming a millionare through daytrading is easy, Loeb teaches that there is no such thing as "easy money" in the financial markets, nor are there "safe investments" (bonds) as the value of money is constantly depreciating.

He also teaches that there are NO guarantees, and that most people WILL lose money regardless of what they do. I think this is true, but most people cannot face it--even those "efficient market" types who advocate the buy and holding of index funds. (I believe Loeb would be a big fan of Exchange Traded Funds, however)

So, what is one to do in order to preserve purchasing power? His answer: intelligent speculation and the ever-liquid account.

To speculate intelligently, Loeb advises focusing on actively traded stocks--not illiquid "penny stocks" for your SPECULATIVE activities.

Let's be clear--Gerald Loeb is no "buy and hold" advocate. Loeb could be considered an advocate of the "relative strength" approach--before the concept of "relative strength" ever existed.

The moment your stock is failing to deliver superior profits, and you have no fundamental reason to believe its uptrend will continue, he advises you sell and look for another. If you can't find anything interesting, or the market is going down--you stay in cash. For Loeb, you MUST avoid catastrophic losses like those sustained in the crash of '29. A stock that doesn't rise (or fall if you like to short) is a waste to be avoided.

Loeb is not a fan of too much diversification. He thinks it is a crutch that guarantees mediocre performance.

His most important teaching would focus on money management (what we would now call "asset allocation"). Loeb would consider it foolish to allocate a significant (more than 50%) of your capital to stocks. You always need a cushion for those inevitable losses in trading operations.

I've taken Loeb's advice to heart. His advice is even more applicable to options trading.

By keeping a small amount of money in a volatile asset, and ruthlessly cutting losses, you give yourself a chance to match the market or even outperform, but with significantly less risk (volatility), due to the large cash reserves.

Loeb's advice isn't easy to follow. But making money isn't easy. And by following Loeb's advice, I'm quite pleased.

This is a book to challenge every preconception you have about investment. The world today is full of buy and hold investors (isn't that how Buffett made his billions?). And it is not hard to be a committed buy and holder when the Dow is fast approaching 7000. Buy and hold has been very profitable and almost any fool could play. But it has not always been so. Sustained bear markets do exist. And in a bear market the mugs in mutual funds become more than passingly skittish. Buy and hold was once unfashionable and it will be again. This is a book (first published in 1934) from the period where buy and hold was as deeply unfashionable as it has been any time in history. Loeb is an extreme pesimist. If the Dow ever sees 4000 again he might become popular. Loeb does not think that fundamental analysis makes any sense. He illustrates with companies which have been overvalued for years at a time and with companies where persistent undervaluation has occured. Loeb does not believe in buying good stocks and holding them. Though buying good stocks before events likely to cause revaluation might be a good idea. Loeb does not believe in diversification. A diversified portfolio will get beaten around in a bear market just as surely as an undiversified one. Moreover, a diversified portfolio will reduce the attention you can pay to individual stocks. Loeb advocates putting all your eggs in one basket and taking extra care to watch the basket. Loeb thinks that if you do not know what to do you should be in cash or near equivalents (short dated high quality paper). If you are in stocks you are in for a hiding. Loeb believes in firm (and irrevocable) stop loss rules. If you buy a good stock and it goes down sell it. Buy and holders might just be inclined to buy some more and suffer more damage at the hands of capricious bears. That these views are deeply unfashionable comes as no surprise when the buy and holders have had such a good run. I come from Australia where the index peaked at 2310 in October 1987 and has only just broken 2400. It spent years in the 1200-1500 range. New Zealand has never broken the pre-crash levels. These are markets where the general populace is scared of stocks. Mutual fund madness is unknown here. I know no Australian who invests in mutuals. I do not think that Loeb is right. But he knows a few things that very few people do know in the US market. Maybe that makes them worth knowing. This is a book about the psychology of a sustained bear market. Dow investors will not recognise it. It is more familiar to us in the Antipodes. Read it so that you will recognise it. And when everyone you know is thinking like Loeb, and the baby boomers have become 'mutual shy', pull out Graham and the other buy and hold bibles and go shopping on Wall Street.

Gerald Loeb, stockbroker and financial writer for over 40 years, first published "The Battle for Investment Survival" in 1935 with 14 years experience in the stock market. The book has been revised 3 times since, and this edition contains the text of the 1965 revision. Loeb is distinguished by being an investor who opposed the buy-and-hold philosophy, which wasn't popular in his day anyway, but it sets him apart from many popular investment pundits today. Most of the book's contents are intended for "the average inexperienced investor", although I think a novice would be hard-pressed to make sense of Loeb's advice.

Loeb's investment philosophy can be summed up neatly: Base stock purchases on fundamentals, but keep your eye on price movement and sell when it goes down. Loeb was an investor with some of a trader's sensibility. He advocates holding onto a security only 6 months to a year and a half. The trouble is that "The Battle for Investment Survival" is poorly organized, repetitive, sometimes contradictory, and burdened by overloaded, awkward prose. Loeb is a poor writer. He makes simple concepts seem utterly labyrinthine. He has one basic philosophy and about a dozen "dos and don'ts" to offer. Instead of giving us a dozen straightforward chapters, "The Battle for Investment Survival" has 33 short, overlapping, convoluted chapters.

"The Battle for Investment Survival" is only 153 pages long. The second half of the book, chapters 34-78, is miscellaneous articles by Loeb in which he offers further investment advice, comments on a variety of financial topics, and shares his opinions on American architecture and "How an Ice-Cream Soda Should Be Made". These articles are more colorful, as well as more readable, than the main text of the book, though less essential. Chapter 64, "I Don't Sell -People Buy From Me", is an interesting account of Loeb's early days working at brokerage houses in San Francisco. In sum, I've nothing against old investment or trading books. They sometimes offer keen insight and have interesting stories to tell. There is nothing wrong with Gerald Loeb's principles. But "The Battle for Investment Survival" presents them poorly, and there are plenty of other books out there that do it better.

The Battle for Investment Survival
Hailed as a must-read classic, I decided to pick up a copy. Having first been published in 1935, I wondered just how relevant its teachings are today (the copy I read was from 1965). I also wondered how successful Loeb was in his own investment endeavors. Sure, he spent many years at the now defunct E. F. Hutton, eventually becoming chairman, but how well did he do or the company for that matter under his guidance? I certainly would not want to take advice from someone who was only moderately successful or worse yet, a failure. I almost put the book down just as quickly as I picked it up - Loeb's writing style is difficult to follow, convoluted and extremely random at times. It may be a reflection of the prose of his time or perhaps he's just a poor writer, nevertheless, it is his first chapter - "It Requires Knowledge, Experience and Flair" that inspired me to continue.

Sadly, I could only make it through 15 of the core 33 chapters. As I mentioned before, Loeb's writing style and lack of organized thoughts makes this book just too unbearable to read. I would imagine that most readers never make it past chapter 5 which could explain why after being in publication since 1935, there are so few reviews (anywhere).

I did find some good nuggets of information but for the most part, the effort-to-reward ratio was just not good enough to justify further reading. Most of his concepts (and that's about all they are) have been repeated by many financial artisans for many years and I'm sure for many years to come. Whether they are Loeb's ideas or not, it's unlikely you'll be able to tell for sure.

What follows, is a chapter-by-chapter analysis of what I personally got out of his book.

Chapter 1 - It Requires Knowledge, Experience and Flair
"Nothing is more difficult, I truly believe, than consistently and fairly profiting in Wall Street," and "... the problem which the `Man on the Street,' often far from a success in his own field, thinks he easily can solve" and several other bold statements in the same vein, provide a subtle, yet in-your-face analysis of the arrogance of the average investor who hopes to get something for nothing. As a result, Loeb states that it takes real knowledge gained from real experiences to even have a chance at success and even then, your success is questionable.

He also believes, and I found this quite interesting, that market pricing is much less based on a company's fundamentals (balance sheet/income statement) than on a whole host of other influences including emotion.
Even with the requisite knowledge and experience and even flair, you still might not succeed. This whole first chapter is a bit of "tough" love whereby Loeb wants you to know just how difficult it is to succeed in Wall Street and how (likely) ill-equipped you are at succeeding based on your more than (likely) common and unimpressive laurels. If you really want to succeed in Wall Street, you better "step-up" your "game" in a big way.

If you haven't been traumatized too badly, Loeb rewards you with your first rule:
Rule #1 - Buy only something that is quoted daily and can be bought and sold in an auction market daily.
This is really quite simple and helps avoid one of the greatest pitfalls of trying to do too much, too fast and getting in over your head. Buy stocks you can easily sell if the need arises.

To summarize, it's extremely difficult to become a successful investor in Wall Street. Most don't have what it takes and aren't willing to put in the time to be successful. If you aren't willing, move on. But if you are, work hard, very hard and good luck.

Chapter 2 - Speculative Attitude Essential

What I think Loeb was saying here is that preservation of capital can only be attained through speculation. Let's clarify the meanings of "preservation of capital" and "speculation". "Preservation of capital" should mean that any offsets (e.g., taxes, inflation, fees, etc.) of capital should not diminish the future value of your initial capital investment. That is, capital invested today should have at least the same purchasing power in the future that it has today. For example, if you invested $1000 today into a tool yielding 3% annual interest, you would lose 1% of your capital at the end of one year if the annual rate of inflation was 4%. Thus, you would not be preserving your capital. Speculation in this context means to engage in an opportunity (investment) where the chance of reward is high. I don't believe he means one should throw caution to the wind, however.

I think the chapter title is misleading. Ultimately, the goal is to make good money, but at the very least, one should preserve capital. This can only be done by engaging in opportunity that offers high reward - speculation. One or two large gains should offset and hopefully improve upon the several smaller losses one is likely to have. Go big or go home should be the message in this chapter.

Chapter 3 - Is There an Ideal Investment?

As if you really need to ask; but if you do, then "no" there isn't. Really, this is all he should have said and left it at that. Instead Loeb decided to go off on a journey where random thoughts came and went like fireflies in night. Nothing, really, was cohesive and one thought did not appear to be logically linked to the next. I found myself repeatedly reading the chapter over and over and each time feeling just as frustrated.

There isn't an ideal investment but if you really want to succeed, you must separate yourself from the herd; don't do what everyone else is doing because their results are at best, lackluster. True success, just like true leaders is not found on every street corner. You must work hard to stand out and succeed.

Chapter 4 - Pitfalls for the Inexperienced

Restrict and focus your efforts; don't try to do too much. You must become an expert in the basics before you can even consider other investment vehicles. Start with "active, seasoned issues, listed on a major Stock Exchange" - echoing Loeb's first rule.
Avoid the many distractions - IPOs, penny stocks, sucker mailings, etc. - that often prove fatal to the inexperienced. Specialization is preferred to dabbling. Be the best you can be in one or two endeavors, not "so, so" in many. Don't try to be a "Jack of all trades, master of none." The bottom line, KISS - keep it simple silly.

Chapter 5 - How to Invest for Capital Appreciation

This chapter was filled with random thoughts and left me asking "what does all this have to do with how I might invest for capital appreciation?" The chapter has several general suggestions that don't tell me how, that might be better served in another chapter - "General Guidelines" perhaps. I'll leave the reading of this chapter to you to determine what you think is important.
One thing is clear, however, Loeb believes your investment philosophy should be to invest for appreciation rather than income (e.g., dividends, etc.). Going one step further, he believes it's better to "let cash lie idle" rather than to invest for income. He believes this policy can keep you out of a potentially dangerous market. You could extrapolate that if there aren't any stocks worthy of investment, it's because the market has turned or is turning negative.

Loeb promotes gaining more experience and suggests maintaining only one position at a time, with no more than 100 shares. Before moving on to another position, close out the current position. He believes this will offer you greater experience and allow you more time to focus and become more aware of the characteristics of successful investing. This philosophy of one position is opposite of diversification - a fairly radical approach even in today's market.

Another of his conflicting mainstream philosophy is his advocacy of timing. He believes there are good and bad times to enter a position. I believe he's primarily concerned about timing stock purchases, but market timing surely plays a large role in that as well. What isn't clear is how he defines timing. He could mean the very short-term timing one might use as a day-trader or timing in the respect of not buying into a position until it's close to making a substantial movement. I would tend to think it would be closer to the former as he also promotes short-term investing over long-term - another highly polarized investing philosophy.

Chapter 6 - Speculation vs. Investment

If you'll remember from chapter 2, speculation means to engage in an opportunity (investment) where the chance of reward is high. Loeb offers a specific goal: shoot to double your money. Investment, on the other hand is to play it safe - perhaps a 3-5% annual yield. Loeb argues that taking the investment approach offers little reward and provides little room for error, that even a single mistake could end up in a loss. Conversely, if you speculate to double your money, even falling short of your goal by 50%, for example, still leaves you making money. At the very least you preserve your capital. In short, the greater the risk, the greater the potential for reward.

Chapter 7 - Sound Accounting for Investors

This chapter is comprised of about 2 ½ pages that leaves you, quite frankly, scratching your head. The chapter could be easily summed up in one brief paragraph:
You should regularly evaluate your holdings - he recommends monthly- to ensure they are meeting your goals, you are accounting for taxes and other costs and are staying on course. This should provide a general checkup of the health of your investment efforts.

Chapter 8 - Why Commitments Should Not be Haphazard

The core meaning of this chapter is to stress how important it is to be fully aware of your commitments - your investments - and the management surrounding them. Most investors purchase a stock they like with hopes it go up in price - they have no idea how high it will go or how long it will take for that matter. They have very little awareness of their commitment. Loeb wants you to know "why it was opened, what one expected to make, how long it was expected to take..." and so on. The first paragraph of this chapter is crystal clear: know all you can about your commitments.

Have an exit plan. We've all heard this before and people like William O' Neil provide suggestions such as cutting your losses at 8%. Loeb goes a step further, and if you follow his advice here, it should help increase your chance for success. Loeb's exit philosophy isn't limited to just when a loss is occurring, but also for when the commitment is doing well or not doing well but not taking its expected course. For example, let's say you buy a stock and expect an increase of 25% over the course of one month. What is your exit plan? Do you sell once you achieve your goal? Do you sell at the end of the month even if you did not achieve your goal? Loeb wants you to think deeply about every aspect of your commitments. In other words, know it like the back of your hands.

Chapter 9 - Some "Don'ts" in Security Programs

Don't invest solely for income or merely to "keep capital employed" or investing "to hedge against inflation." Loeb asserts (conflicts with his theme that it's unlikey you will succeed) that once you attain a certain level of competence, are able to speculate for large gains and you are able to "expertly" time purchases, there is no need for diversification and your perceived risks will in fact be conservative over time.

You should buy the best and at the best time. Bargains are normally found when the masses fear and are afraid to buy. Buying when everyone else is buying and the sentiment is high is a recipe for poor opportunities.
Get into the habit of thinking about your ultimate results rather than current or daily results. Your goal should be 100% gain over a longer period rather than many short gains over a short period of time.

Chapter 10 - What to look for in Corporate Reports

He really doesn't tell you specifically what to look for in a corporate report. He does, however, impress upon you the need to thoroughly scrutinize any company you might choose to be involved with. Look for strong cash reserves. With few exceptions - smaller upstarts - companies that finance growth and expansion with debt do not exhibit sound cash management decisions. (This is quite interesting since the companies listed in Wall Street are doing just that and many quite successfully. But I would speculate that what Loeb is getting at is that few cash savvy companies expand without going into debt or at least limited debt and those are the ones you want to consider.) He feels that companies that must constantly rely on financing imply "an unprofitable field, poor management, or unwise overdevelopment." After all, a company that has strong financials can finance their own expansion (or at least much of it) without going into debt.

Look for unwise decisions such as write-downs and as previously mentioned, expansion financed with debt. Read between-the-lines; a one million dollar increase in revenue may not be all that exciting if there was a one-time asset sale of 750K during the same period.
At the end of the day, you want to find a company with strong fundamentals, a company that can manage its finances and show profits. Again, Loeb doesn't offer specifics here but does leave you with the impetus to learn.

Chapter 11 - Concerning Financial Information, Good and Bad

Another long-winded, drawn-out chapter filled with convolution; one sentence was longer than most average paragraphs. The message in this chapter is to pay close attention to your information and try to fully understand its meanings and implications, for the road to success is full of pitfalls. Even insider information is dangerous and at times no more advantageous than the information the average person already has access to. In fact, in some instances it can be detrimental - especially when the information provided is inaccurate or comes from someone with less than honorable intentions.

Chapter 12 - What to Buy - and When

This chapter provides a considerable amount of relevant information and is worthy of a detailed reading. Loeb offers many general guidelines that need further research to expound his thoughts. He promotes the "buy low and sell high" mantra. In order to find these rare gems, there are a few prevailing characteristics:
* Popular market sentiment should be bearish.
* The securities market should be well liquidated (sold to the point where prices are very low).
* Current business conditions are poor or expected to become poor.
* The stock is "out of favor" with the general population. It will generally have a low rating.
* Earnings are abnormally low or expected to become low.
* Dividends are non-existent or lower than normal.
* The stock price must reflect the current sentiment. A low outlook of a stock should have an equally low price.

As already stated, you'll need to expound on some of his concepts but the ideas are there. As the speculator, you need to take an opposing position. In your mind, that stock that is "out of favor" with the masses, and receives low ratings is really a diamond in the rough and its current share price is not a true reflection of its potential. But don't take this stance blindly. You must back your decision with sound information. I'm not sure what he means by "sound". If a stock's fundamentals are weak, how can one choose it based on "sound" information?

You buy low when the stock is out of favor and undesirable to the masses. Then when the masses take notice and start buying, it will push the share price higher; to an eventual sell point. Think of the "institutional sponsorship" concept promoted by William O' Neal. According to Loeb, "the objective is to always buy that which the majority thinks is speculative and sell it when the majority believes the quality has reached investment grade." However, weigh the "possibilities for profit vs. the risk for loss."

Chapter 13 - Importance of Correct Timing

Loeb repeats the importance of getting into the market only when the pros outweigh the cons. Based on his concept of speculation, I'd say the pros must heavily outweigh the cons. Once an investment is entered, your decision process becomes much more difficult. There are many more variables to consider and you must have the fortitude to ignore emotion - especially in times of loss. Losses must but cut swiftly and for the most part, forgotten. I like the concept of forgetting - it helps you move on and avoid that negative tendency of dwelling on "what ifs." Moving on allows you to focus on the future.

If you set your return goals high and achieve a high rate of return, you can sit on the side-lines for greater periods of time while searching for the next great investment. Cash reserves allow you the opportunity to enter a position when the timing is right.

Chapter 14 - Statistical Analysis, Market Trends, and Public Psychology

Loeb asserts that statistics are rarely of value because they are mostly concerned with theory or academic s and ignore the more import fundamental trends. I'm not really sure what he's trying to say here. Surely, statistics can be made about fundamental trends. For example, one might say "the average bear market lasts 10 months." This could be statistically supported and would be related to the fundamentals of the market.
Market trends should be determined first before looking at a stock purchase. The best stock will likely do poorly in a down trending market if you bought expecting to go long, for example. Predicting market tops and bottoms is not possible and trying to do so will lead, ultimately, to failure. You aren't really looking at where the current market is at, but where it's going - trending.
Loeb states, "The most important single factor in shaping security markets is public psychology." You want to try to determine the state of the masses and approximate where you think they are heading and benefit from their actions. He goes as far as claiming the name of a stock "is an important factor in securing or losing public favor." I would imagine, as having at times witnessed extremely odd, opposing and conflicting behavior that market psychology is a difficult thing to gage consistently.

And his final piece of information is to keep in mind, when performing other analysis, a securities past appraisals as guidance to its future price. What is he trying to say here? Does it relate to market psychology or market fundamentals or both? I'm not really sure.

Chapter 15 - Price Movement and Other Market Action Factors

Actual price movement is the most important factor in forming an opinion on the general trend of the market. So while you might think a security has some theoretical value (and trading above or below) or the market should be trending one direction or the other, it really doesn't matter. It's what is actually occurring that matters most.

It's dangerous to resist the market's trend - despite thinking or knowing you are right. Prices of securities sell for exactly what the market thinks they are worth at any given time. One could extrapolate that certain security valuations (such as EPS), have little to do with a stock's ultimate price than how desirable or undesirable a stock is to the public at any given time.

The market behaves due to many factors - important or not. The current market is a reflection of all these factors. One of the most important (and in my humble opinion, the one most are least apt to predict) is market psychology.

Loeb outlines three types of investors ranging from "sheep" (my words) to the "successful type" (his words). Public sheep follow the market up or down with no real reasons for buying or selling. If selling is taking place, as reflected by the market, they will sell and vice-versa. The second group, chart and tape readers are rarely successful if that's all they rely on for buying and selling. (But it would appear he's just guessing.) The successful investor takes all things into consideration - market direction, fundamentals, incompetence, etc. - and tries to determine if what is currently taking place is supported by current data and will continue into the future.

Loeb has often mentioned how much of a role market psychology plays and emphasizes how difficult it is to interpret and predict. However, he states "the action of the market itself can be expected under most circumstances to stimulate buying or selling in a manner consistent enough to allow reasonably accurate forecasting of news in advance of its actual occurrence." What does this mean? Does he mean that if the market is trending up and negative news occurs, that we can expect this to negatively impact the market or least have a minor impact, for example? I've witnessed too many days where stocks fall on good news and rise on bad. Too often there seems no rhyme or reason. I highly doubt Loeb's suggestion for predicting market moves based on market psychology is anything much more than a coin toss.

Timing also plays a critical role when evaluating the market. The same event can have different and opposite meanings depending on when the event takes place. For example, bad news at the end of a long bullish cycle can signal a pending change in the market direction and reaction by the market might be swift and overreacted. Bad news during a bearish cycle may have little impact as the status quo continues bearish.
Loeb doesn't really believe in confirmation analysis yet provides suggestions of his own confirmations. He also doesn't put much faith in technical analysis. He feels both market confirmations and technical analysis are theoretical in nature and not likely of much value in reality.

To summarize Loeb's thoughts, you need to be able to evaluate and interpret all variables (most importantly market psychology) in order to establish any type of solid conclusions as to the market's behavior. Even then and for various reasons, it's easy to draw the wrong conclusions. Loeb concedes then, that this endeavor is "the most inexact sort of science."


* Market direction and price movement are two very important indicators.
* Look for confirmation. Are other stocks following the market leaders?
* High volume with light concessions can indicate a bullish sentiment, especially if the negative news would normally be expected to result in a greater price decrease.
* Look for stocks showing strength when going up and resistance when going down. IOW, when the general market is climbing, its price is increasing more than the average and when the market is declining, its price is decreasing slower than the average.
* Don't fight the tape.

Like many of the other reviewers, I read this book after seeing it in the bibliography of a Wm. O'Neil book. While the observation that "if you've read O'Neil's major works, you've already read Loeb" has some truth to it, I would argue that there is at least one point that Loeb expresses even more clearly than O'Neil, i.e. the fallacy of holding a declining stock because "it will come back." Suppose you were forced to sell the stock today, he asks. Now, suppose you were trying to figure out the VERY BEST investment to try to recoup your loss. Would it be to repurchase your loser? Almost certainly not. To me, that question crystallizes the argument for ruthlessly cutting losses better than I have ever heard it expressed.

The same point is recast in a number of different ways, e.g. the excellent chapter on "Sound Accounting for Investors", in which he advocates always "marking to the market", rather than ignoring "paper" losses or focusing on current income. "Gaining Profits by Taking Losses" and "The Ever-Liquid Account" bring additional perspective to the same theme.

In fact one of the nicest features of the book is the way it is broken up into almost 80 chapters. The main themes are repeated several times, but with different emphases. As a result, the more one browses and rereads selected sections, the more one appreciates the strength of the iconoclastic theory of investment that Loeb advocates.

I read this book on the advice of William J. O'Neil, undoubtedly one of the market wizards of our time. Gerald M. Loeb is an outspoken advocate of perfecting the art of cutting your losses and timing your buy and sell decisions. For those trading for rapid profits, he mentions the importance of concentrating in the "one outstanding, fast-trading leader that is jumping in the right direction". Detaching yourself from the crowd and realizing one's ditance from perfection is one of the many insights to be gained in this book. To me, the compassionate wisdom of Gerald M. Loeb more than justifies the cost of the book.

OLUMUYIWA OMOLOLU.

This is a book that was out of demand for a long time, it seems, and is much needed nowdays. Most investment guides that became popular in the last 10-15 years were about the bull market, obsolete now.
This outstanding work of Gerald M. Loeb sums up his experience of an active investor all the way from the bull market of 20ies, then the Big Crash, the gloomy 30ies, WW2, until 1965. He managed to survive all major market mishaps and he shares his thoughts with the reader. His preferred audience is perhaps the intelligent investor in tough times. What I learned from him (and it was the first time I ever read these things) - losses should be cut promptly, diversification is usually poor tactics, fundamentals can sometimes be ignored. This is just his opinion of course, read the arguments yourself.
A must read on how to survive the recession, IMO.

Anyone interested in pursuing a career in investing/speculating or wishing to improve their money management skills should read this book. You'll notice that most of the wisdom, insights, and advice from Market Wizards or books about Buffet generally all appeared before in this classic. There is no secret, its all about hard work and making good risk/reward investments over a period of time. This book explains typical mistakes that are so grounded in human nature, but after reading this if you can learn to pyramid rising positions instead of trimming them or selling them out, then the return on this book will be tremendous. I also enjoyed his views on the segments of life and the importance of spending money as well as making it. If I could only keep one investment book to read over and over, this would be the one.

As one review put it-- this is timeless wisdom and dated info. The book is fascinating and it is like meeting a Great Guru in person.I had watched the market little deeply only for few months.But even with that experience,I can say "Oh ,how true,how true" for many many paragraphs in the book.I have underlined them everywhere.If you care about your money and investment and want to take charge of it, There is no other compassionate Guru you can find other than Mr Loeb.I think his theory works very well in bull markets too. But you have to work very hard,as he rightly cautions. It is worth all the effort. Thank you Mr Loeb for demystifying the Stock market, its perils and opportunities.If one has time, One should forget all the fancy investment theories floating around in popular journals and fashion, and practice Mr Loeb.I think it will work very well for small investors

I'm amazed that this book was published during the mid 60's but the trading rules that gerald loeb advices is the same trading rules that I use until now. It just show you that the Stock market never changes. Trading pyschology stays the same because fear and greed will always be part of the trading cycle. If you want to get down to the basics of stock trading read this book.