Customer Reviews

Beyond Wall Street: The Art of Investing

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I couldn't get past page 9 where the author, in discussing trailing PE ratios, attributes a remark made in 1987 to "Securities and Exchange Commission (SEC) Chairman Alan Greenspan." Greenspan, of course, has never even served on the SEC, much less chaired it. Sorry, but if the author can't get the basics right, the rest of the book is suspect.

While this book (based on the PBS series of the same name) is far from perfect, it does give a pretty good overview of some of the main themes of modern investing with profiles from some of the Street's biggest stars. You can do far worse than listening to thoughts about growth investing from Foster Friess and value investing from John Neff. And the final chapter on risk with Peter Bernstein was an exceptional overview of the basic concepts of behavioral finance and the mental mistakes often comitted by amatures and professionals alike.

However, people with a deeper grasp of Wall Street will be frustrated by the lack of depth on many topics. Just to cite one example, the chapter on asset allocation ignores the current debate about the amount of benefit investors really get from international diversification. Yes, in normal circumstances the correlation between markets may be low, but in times of crisis - when the benefits of diversification are most needed - correlations tend to rise dramtically. When panic starts in one market, other markets often are either guilty by association (Brazil and Argentina got hit during the Peso crisis) or because money managers sell those assets which are easiest to sell. Just ask the folks at Long Term Capital Management what happens when correlations suddenly increase.

But that lack of depth also makes this a pretty easy read and there are enough useful bits to make this a book worth reading, especially for people new to the great game.