The era of buying and holding stocks is gone -- and will not return for some time. Now is the time to learn to target where the market is going to be, not where it has been, so you can invest successfully. Financial expert John Mauldin makes a powerful, almost irrefutable case regarding the future direction of the markets. He then details a new approach to investing that will allow you to adjust to the new reality of investing. You'll consider options beyond traditional stock portfolios as you learn to choose between the stable and secure investments that will enable you to profit in turbulent markets. Buy your copy of this must-read investment roadmap today.
Bull's Eye Investing
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Book Description
Frequently Bought Together
Editorial Reviews
From the Inside Flap
The key to successful investing today is knowing where the markets and economy are going, not where they have been, and focusing on absolute returns––real profits in your pocket. You, the contemporary investor, instinctively know that the markets of today––and the forces that drive them––are quite different than those of past decades. Your intuition tells you that if you are to be successful in the future, you must adjust your investment strategy to reflect the new economic realities. But what strategies? What adjustments? Where can you turn for reality-based answers?
In the positive and forward-thinking Bull’s Eye Investing: Targeting Real Returns in a Smoke and Mirrors Market, financial expert John Mauldin makes a powerful case regarding the future direction of the markets and what you must do to be successful in them. Mauldin lays a solid foundation for his argument by examining six major (and very different) ways to look at the stock market as well as the numerous ways Wall Street tries to entice unknowing investors to keep buying overvalued products. Marshalling a huge array of facts and sources, Mauldin looks at these and other issues, including the effects of value, risk, market psychology, and demographics on your potential investments. He details a new approach to investing that will allow you to successfully adjust to the new reality of investing.
In a straightforward and easy-to-understand style, Mauldin helps you understand why traditional stock portfolios shouldn’t be your primary investment vehicle in the coming years, and how absolute return vehicles, such as hedge funds (Chapters 20—22), specific types of bonds, and certain types of value-oriented stocks (Chapters 16—18), and investments can help you control risk, while carefully and methodically growing your investments over the next decade.
Helping you think outside of the Wall Street box, Bull’s Eye Investing focuses on finding value and controlling risk, while working with trends (which Mauldin forecasts for you) rather than against them. It will show you why investors must focus on absolute returns instead of relative returns, as well as how research and homework will be rewarded––rather than blind trust in an ever-spiraling market.
Good markets are followed by bad markets, which are again followed by good markets. While no one can predict exactly when these markets will begin or end, there’s a pretty good chance that this cycle will continue to repeat itself. As an investor, success hinges on your understanding of these ever-changing economic and investment cycles––and your response to them. Bull’s Eye Investing can help you make the most of these trends, by showing you how to target your investments toward where the markets will be, not where they have been. --This text refers to the Hardcover edition.
From the Back Cover
Praise for Bull's Eye Investing
"This book has more wisdom per page than any reader has the right to ask for. John Mauldin knows the score and tells the reader how to join him in keeping count."
—Peter L. Bernstein, author of the bestselling Against the Gods
"Bull's Eye Investing is a treasure trove of market insights and information. Simply put, Bull's Eye Investing provides information and perspective that you will not find anywhere else."
—Richard Russell, publisher of Dow Theory Letters
"Bull's Eye Investing is a lucidly written, lambently cautionary, edifying, and diverting must-read guide to the ways and means of hitting the gyrating target of a 'Muddle Through Economy.' Mauldin is the Ben Graham of the new millennium."
—George Gilder, author of Wealth and Poverty and editor of the Gilder Technology Report
"Mauldin dances and weaves through a mountain of fascinating research, taking us on a tour of the past and giving us a preview of the future. Bull's Eye Investing is one book that should be close to every investor's desk."
—William Bonner, author of the New York Times #1 business bestseller, Financial Reckoning Day
"This book is lucid, cogent, and useful. Overall, it provides an excellent guide to better investing habits and an effective antidote to standard Wall Street bromides."
—Robert R. Prechter Jr., author of the bestseller Conquer the Crash
"Finally, an easy-to-read but very comprehensive study on investments in a world where, sadly, common sense is no longer so common."
—Marc Faber, editor of The Gloom, Boom & Doom Report
"For these deer in the headlights, Mauldin's advice is explicit . . . forcefully argued and well researched."
—Gregory Bresiger, Active Trader Magazine
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More About the Author
John Mauldin is a renowned financial expert, a multiple New York Times best-selling author, and a pioneering online commentator. His weekly e-newsletter, Thoughts From The Frontline, was one of the first publications to provide investors with free, unbiased information and guidance. Today, it is one of the most widely distributed investment newsletters in the world, translated into Chinese, Spanish and Italian. He is regularly seen on TV and in national print media. President of Millennium Wave Investments, he is the father of seven children (five adopted) and lives in Dallas, Texas.
Customer Reviews
Most Helpful Customer Reviews
336 of 339 people found the following review helpful
Format:Hardcover
This book asks where the stock market will be in ten years' time, and how you should invest as a result of that. It's potentially important, because discussion of long-term investment strategy (as opposed to next quarter's earnings) is so rare - yet obviously critical for investors. For that reason, I'm going to write a more detailed review than most of the others you'll find here. I'll summarize Mauldin's key arguments, briefly discuss his recommendations, and finally give you an honest appraisal of whether you should buy the book.
SYNOPSIS. In the first half of the book, Mauldin sets out to prove that in ten years' time the US stock market will likely be no higher than it is now, and possibly significantly lower. The stock market's future level will be determined by (a) earnings growth and (b) the value the market places on those earnings (ie. P/E ratios), so Mauldin focuses on these two elements. First, he argues that earnings growth will be disappointing. Companies' earnings will be depressed by the adoption of stricter accounting standards, the expensing of options, and higher pension costs. Combine that with anemic economic growth due to the aging of the population, the current account deficit and the budget deficit, and earnings are unlikely to exceed their historical growth rate of under 6%. Next, Mauldin argues that P/E ratios are unlikely to rise over the coming decade, and may in fact fall dramatically. He assembles a battery of arguments to prove his case. Secular bull markets have never started from times when the market's P/E ratio was as high as it is today. The market is currently overvalued according to multiple measures, and will likely revert to its historical mean. The risk premium is currently low, and a recovery to more sensible levels would depress P/E ratios. Finally, P/E ratios fall as inflation rises or an economy slips into deflation; so given the US economy's current inflation rate (close to zero), there's nowhere to go that would result in a higher P/E ratio for the market. With mediocre earnings growth and falling P/E ratios, the market is therefore headed nowhere or a lot lower.
If the market will be flat or down over the next decade, how should you invest? That's the subject of the second half of the book. Mauldin recommends that you buy value stocks or a mutual fund run by a value-oriented manager, since value stocks have historically outperformed growth stocks. Stocks that pay dividends are particularly attractive, as a large part of the total return from the stock market has come from dividends. You should also assemble a laddered bond portfolio, buy real estate, and buy gold or gold stocks if you have the expertise. His key recommendation, however, is that you should put your money into hedge funds, since hedge fund results are not dependent on the market rising.
HOW CONVINCING IS HE? Mauldin supports his argument that the stock market will stagnate over the next decade with data, academic studies and a reasonable description and rebuttal of opposing viewpoints. He comes unstuck, however, with the practical recommendations in the second half of the book. Three quick examples: (1) The first half of the book suggests there's a reasonable likelihood of deflation. In that case, cash would be a better investment than most of Mauldin's recommendations. (2) If the stock market is really heading down, as Mauldin suggests with his assertion that the market's P/E ratio could go to 10 or below, the best strategy for most investors is simply to buy long-term index put options; but he doesn't mention this. (3) Hedge funds have lousy tax efficiency, so returns for taxable investors would be a lot worse than Mauldin seems to suggest. These points deserve more discussion than this space allows, so I'll address them in more detail (and provide practical alternatives) on the TechUncovered web site. Suffice it to say that despite his honesty, Mauldin's viewpoint is likely skewed by his profession: acting as an introducing broker to hedge funds.
SHOULD YOU BUY THE BOOK? Despite these criticisms, Mauldin asks important questions and assembles and summarizes a lot of material. But here's the problem. Much of the content has been reproduced from Mauldin's free emails, which are available on his web site, and some of the key arguments are available for free elsewhere, such as Grantham's letters and Bogle's speeches. (I've provided links to these sources on the Market Resource Page on the Seeking Alpha web site.) Worse, unlike the emails, the book has been poorly edited. A couple of the chapters are co-written with a colleague, and read like stand-alone hedge-fund marketing material, while others repeat points in earlier chapters. So the book misses the opportunity to integrate the content of the emails into a readable, methodical argument. Whether you decide on the email archive or the book, though, Mauldin is definitely worth reading.
SYNOPSIS. In the first half of the book, Mauldin sets out to prove that in ten years' time the US stock market will likely be no higher than it is now, and possibly significantly lower. The stock market's future level will be determined by (a) earnings growth and (b) the value the market places on those earnings (ie. P/E ratios), so Mauldin focuses on these two elements. First, he argues that earnings growth will be disappointing. Companies' earnings will be depressed by the adoption of stricter accounting standards, the expensing of options, and higher pension costs. Combine that with anemic economic growth due to the aging of the population, the current account deficit and the budget deficit, and earnings are unlikely to exceed their historical growth rate of under 6%. Next, Mauldin argues that P/E ratios are unlikely to rise over the coming decade, and may in fact fall dramatically. He assembles a battery of arguments to prove his case. Secular bull markets have never started from times when the market's P/E ratio was as high as it is today. The market is currently overvalued according to multiple measures, and will likely revert to its historical mean. The risk premium is currently low, and a recovery to more sensible levels would depress P/E ratios. Finally, P/E ratios fall as inflation rises or an economy slips into deflation; so given the US economy's current inflation rate (close to zero), there's nowhere to go that would result in a higher P/E ratio for the market. With mediocre earnings growth and falling P/E ratios, the market is therefore headed nowhere or a lot lower.
If the market will be flat or down over the next decade, how should you invest? That's the subject of the second half of the book. Mauldin recommends that you buy value stocks or a mutual fund run by a value-oriented manager, since value stocks have historically outperformed growth stocks. Stocks that pay dividends are particularly attractive, as a large part of the total return from the stock market has come from dividends. You should also assemble a laddered bond portfolio, buy real estate, and buy gold or gold stocks if you have the expertise. His key recommendation, however, is that you should put your money into hedge funds, since hedge fund results are not dependent on the market rising.
HOW CONVINCING IS HE? Mauldin supports his argument that the stock market will stagnate over the next decade with data, academic studies and a reasonable description and rebuttal of opposing viewpoints. He comes unstuck, however, with the practical recommendations in the second half of the book. Three quick examples: (1) The first half of the book suggests there's a reasonable likelihood of deflation. In that case, cash would be a better investment than most of Mauldin's recommendations. (2) If the stock market is really heading down, as Mauldin suggests with his assertion that the market's P/E ratio could go to 10 or below, the best strategy for most investors is simply to buy long-term index put options; but he doesn't mention this. (3) Hedge funds have lousy tax efficiency, so returns for taxable investors would be a lot worse than Mauldin seems to suggest. These points deserve more discussion than this space allows, so I'll address them in more detail (and provide practical alternatives) on the TechUncovered web site. Suffice it to say that despite his honesty, Mauldin's viewpoint is likely skewed by his profession: acting as an introducing broker to hedge funds.
SHOULD YOU BUY THE BOOK? Despite these criticisms, Mauldin asks important questions and assembles and summarizes a lot of material. But here's the problem. Much of the content has been reproduced from Mauldin's free emails, which are available on his web site, and some of the key arguments are available for free elsewhere, such as Grantham's letters and Bogle's speeches. (I've provided links to these sources on the Market Resource Page on the Seeking Alpha web site.) Worse, unlike the emails, the book has been poorly edited. A couple of the chapters are co-written with a colleague, and read like stand-alone hedge-fund marketing material, while others repeat points in earlier chapters. So the book misses the opportunity to integrate the content of the emails into a readable, methodical argument. Whether you decide on the email archive or the book, though, Mauldin is definitely worth reading.
45 of 45 people found the following review helpful
3.0 out of 5 stars
Misleading title, first 100 pages excellent, rest of questionable value ...
September 15, 2005
Format:Paperback
I am not sure what this book is trying to enunciate or whom it is targeted to, as you will see from my discussion below:
The first 8 chapters of this book are excellent and I am sure I will refer to them time and again.
The next chapters 9-14 enunciate, in excruciating detail, why the present decade will not be such a balmy one for equity investing.
The next chapters, 15-17 deal with investment psychology.
The next chapters, 16-18 deal with investing in stocks and bonds.
The balance of the chapters 20-24 deal with investing in hedge funds, gold etc.
The author shows that blindly investing in stocks and assuming that the future is always going to be rosy is misleading and unhealthy. His analysis was indeed instructive and I gained a lot from it.
He then meanders all over the place to prove that the coming decade will not be a bullish one for stocks.
He then presents alternatives, primarily using hedge funds and states time and again that this is for an "Accredited Investor" having net worth of $1,000,000 or more.
I am not sure how an average investor can use his recommendations or whether an Accredited Investor would bother to read this book and follow his (sometimes completely unrealistic) advice!
Get the book for a library, read the fist 8 chapters and leave it at that.
The first 8 chapters of this book are excellent and I am sure I will refer to them time and again.
The next chapters 9-14 enunciate, in excruciating detail, why the present decade will not be such a balmy one for equity investing.
The next chapters, 15-17 deal with investment psychology.
The next chapters, 16-18 deal with investing in stocks and bonds.
The balance of the chapters 20-24 deal with investing in hedge funds, gold etc.
The author shows that blindly investing in stocks and assuming that the future is always going to be rosy is misleading and unhealthy. His analysis was indeed instructive and I gained a lot from it.
He then meanders all over the place to prove that the coming decade will not be a bullish one for stocks.
He then presents alternatives, primarily using hedge funds and states time and again that this is for an "Accredited Investor" having net worth of $1,000,000 or more.
I am not sure how an average investor can use his recommendations or whether an Accredited Investor would bother to read this book and follow his (sometimes completely unrealistic) advice!
Get the book for a library, read the fist 8 chapters and leave it at that.
40 of 41 people found the following review helpful
By Orson Wang
Format:Hardcover|Amazon Verified Purchase
John Mauldin writes as a cool "just the facts" analyst. If this book doesn't convince you that you need to tread carefully in the next decade, then nothing will.
"Bull's Eye Investing" is a full frontal assault on the perennial bullishness of Wall Street. Mr. Mauldin comes armed with a wide array of studies from other authors. No, Mr. Mauldin does not bring his own guns made by his own hands. What he has done is assembled a vast array of weapons and assembled them in a way that makes the whole greater than the sum of the parts. (Many of the chapters are co-written with other authors.)
The entire book can be boiled down to one conclusion: the next decade will see a predominately declining market. Most of the book is spent detailing why this must be. Nothing written is new or ground breaking. Many of the cited studies use old premises, updated with the newest data. Trailing price-to-earnings ratios, for example, have long been cited as an inverse predictor of future returns. If you are familiar with such studies and already accept their conclusions, then you do not need to read this book as you will find the book rather repetitive. But for those who are not familiar with such evidence, the depth of arguments that he piles on will be impossible to deny.
The title of the book suggests a discussion of methods to invest in uncertain markets. It is worth noting that Mr. Mauldin is neither a professor nor a money manager - he is an advisor who helps his clients select hedge funds and other investing vehicles. Thus, as before, his investing recommendations are an assemblage of various studies and newsletters by other authors as well as his own experience with the world of hedge funds. The practicability of these recommendations is debatable. On the one hand, some of the cited studies provide strong statistical evidence that a particular investing strategy will work and he argues convincingly why these strategies make sense. On the other hand, Mr. Mauldin does not address how well such strategies might work with the strong headwind that he takes such great pains to establish.
"Bull's Eye Investing" is reminiscent of "Irrational Exuberance", written by Professor Robert Shiller at the peak of the technology bubble. Dr. Shiller was ridiculed as someone who "doesn't get it." Those who still believe so can skip "Bull's Eye Investing", as these two books could be kissing cousins. Similarly, those who accepted the premise of "Irrational Exuberance" will simply find more evidence for the same thesis in this book. This book is for the undecided - read this book now before Mr. Mauldin, like Dr. Shiller before him, proclaims to the world "I told you so!"
"Bull's Eye Investing" is a full frontal assault on the perennial bullishness of Wall Street. Mr. Mauldin comes armed with a wide array of studies from other authors. No, Mr. Mauldin does not bring his own guns made by his own hands. What he has done is assembled a vast array of weapons and assembled them in a way that makes the whole greater than the sum of the parts. (Many of the chapters are co-written with other authors.)
The entire book can be boiled down to one conclusion: the next decade will see a predominately declining market. Most of the book is spent detailing why this must be. Nothing written is new or ground breaking. Many of the cited studies use old premises, updated with the newest data. Trailing price-to-earnings ratios, for example, have long been cited as an inverse predictor of future returns. If you are familiar with such studies and already accept their conclusions, then you do not need to read this book as you will find the book rather repetitive. But for those who are not familiar with such evidence, the depth of arguments that he piles on will be impossible to deny.
The title of the book suggests a discussion of methods to invest in uncertain markets. It is worth noting that Mr. Mauldin is neither a professor nor a money manager - he is an advisor who helps his clients select hedge funds and other investing vehicles. Thus, as before, his investing recommendations are an assemblage of various studies and newsletters by other authors as well as his own experience with the world of hedge funds. The practicability of these recommendations is debatable. On the one hand, some of the cited studies provide strong statistical evidence that a particular investing strategy will work and he argues convincingly why these strategies make sense. On the other hand, Mr. Mauldin does not address how well such strategies might work with the strong headwind that he takes such great pains to establish.
"Bull's Eye Investing" is reminiscent of "Irrational Exuberance", written by Professor Robert Shiller at the peak of the technology bubble. Dr. Shiller was ridiculed as someone who "doesn't get it." Those who still believe so can skip "Bull's Eye Investing", as these two books could be kissing cousins. Similarly, those who accepted the premise of "Irrational Exuberance" will simply find more evidence for the same thesis in this book. This book is for the undecided - read this book now before Mr. Mauldin, like Dr. Shiller before him, proclaims to the world "I told you so!"
Most Recent Customer Reviews
5.0 out of 5 stars
Good book
The book is a must reading for every serious investor. I recommend to buy it. It helps to look at the market realistically.
Published 5 months ago by Valentine Silakov
1.0 out of 5 stars
I want my money back
I agree with his basic idea that a focus on 'absolute return' investing may be a good strategy for the next decade .... Read more
Published 12 months ago by John A.
4.0 out of 5 stars
Good but not for beginners
This book's main premise is that the market will return much less or possibly even be negative in the next 10-20 years compared to the previous period. Read more
Published on March 11, 2011 by magellan
5.0 out of 5 stars
Great service
Book was in perfect condition and arrived within a few days of ordering. Excellent service.
Published on April 5, 2010 by Thomas L. Farkas
5.0 out of 5 stars
Fabulous Book, By a Great Investor
This terrific book complements the high quality e-mail letters that he puts out. Some of his letters are free, but offer priceless advice and guidance. Read more
Published on March 12, 2010 by Reader in Palo Alto
5.0 out of 5 stars
Great Book - A Wealth of Insight.
I've been reading John Mauldin's newsletter for a long time, and decided to check out his book. Mr. Mauldin is a very smart man who has tremendous insight into economics and... Read more
Published on June 5, 2009 by M. Sanders
5.0 out of 5 stars
psychology on Wall street
this book answered many questions i had about the psychology of investors. If you invest and don't know these things you are going to lose money.
Published on December 28, 2008 by tridoc
5.0 out of 5 stars
A very useful read -- And perhaps even right!
Here we are in Feb 2008 and it appears the bear market is upon us, and possible recession. Reading the book (I haven't finished it yet) in this context makes his predictions seem... Read more
Published on February 22, 2008 by Fred Swartz
2.0 out of 5 stars
The Big Bad Grizzly Bears
If a person constantly predicts a bear market over a period of years, eventually he will prove right, since, as we all know, bull markets do not last forever, and bear markets are... Read more
Published on August 3, 2006 by Q
5.0 out of 5 stars
Bull's Eye Investing Review
John Mauldin is an excellent writer and gives excellent advice, as well as a better understanding of the market action.
Published on July 26, 2006 by Kevin S. Beard
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