Customer Reviews

Confessions of a Wall Street Insider, A Zen approach to making a fortune from the coming global economic crisis

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Frankly, I don't know what to tell you about this book. Not because I don't understand it, but because it has some useful advice, some bad advice, and some advice that would be crazy dangerous for the average person. I think it would be like trying to learn to drive by taking the advice of a race car driver.

For example, when he lets you know in various waves that your investment firm is not really on your side I think that is good advice. I also agree that you should not just follow along blindly in some investment or trading program that is presented to you. And when he helps you take more responsibility for your wealth, I support that general notion.

However, he also makes claims that may well be commonly held myths but are not held by anyone with even a small amount of financial training or education. For example, he goes out of his way to tell you that markets are not 100% efficient. Well, whoop-de-doo. The only reason anyone ever posits such a model is to show you why it isn't true. Nevertheless, markets are best viewed as efficient while you look for the aberrations. Just don't bet your money at any given moment that the price being offered represents some Platonically true version of the discounted future cash flows.

J.S. Kim also advocates some things about stock picking and gold that may work well for some professional trader (who always tweak the general models to get some advantage). However, for YOU as a general investor trying to build wealth for retirement, this kind of trading strategy can end up in disaster. He speaks against diversification without explaining to you why it is recommended to the general person. But, yes, if you want to try your hand at day trading and feel the need to make capital gains possible for others, please dive into it with all your excess money.

He also makes some strange statements like calling Warren Buffett an investor. Yes, he is an investor, but he does not invest like the methods discussed in this book. Buffett generally buys and holds. And holds some more and then some more. He doesn't buy to sell and generally he also takes over and manages the companies he invests in or at least has some input on the board.

J.S. Kim has written a book that is interesting to read, but the things I agree with and the things I think are odd are so mixed together that I really can't recommend it for the average reader. And if you are well versed in finance you don't need it.

But, if you want a book on investing that has some interesting points and enjoy arguing with what you are reading, you might enjoy this.

Reviewed by Craig Matteson, Ann Arbor, MI

This book is a blatant advertisement for Mr Kims "Proprietary" (his word) system which you can pay him to teach you and an add for his newsletter which I imagine you can subscribe to. He spends a great deal of time telling you that there is a global collusion among all of the big brokerage houses and educational institutions to help the brogerage fims aquire your money. He spend an equal amount of time telling you that to expand your wealth, you must do it on your own. However he keeps referring to his "Proprietary" system and his news letter instead of in any constructive way telling you how you can do it on your own. As noted above this is advertising that Mr. Kim wants you to pay for (if you buy the book you are purchasing the add).

The following is from pages 236 to 239 of the book, I am not reproducing the entire text but nothing has been left out or changed between the opening and end quotation marks. These are the last few pages of the book.

Page 236 - 237

"Appendix II

SmartKnowledgeU Services Available at Our Online Website

For more information please visit us at

http://.SmartKnowledgeU.com

The Platinum Level Membership

26 Learning Modules, 400+ Pages of Content, 24 Practice Exercises, 139 Lessons, 166 Exam Questions, More than 109 Hours of e-learning, and 6 months of supplemental Learning. Our online investment education course teaches you our proprietary Blue Ocean investment strategies and a comprehensive investment system that will grant you a legitimate shot of earning 25%+ returns for the rest of your life. Learn strategies that enable you to uncover stocks that are virtually guaranteed to return you a minimum of 40% returns in a couple of years or less........." etc

Page 238

" The Global Stock Picker Investment Letter

Learn what makes the SmartKnowledgeU proprietary investment system so unique. Although we reserve the details of how we select the stocks that comprise our Global Stock Picker Model Portfolio for our Platinum Level members only, the Global Stock Picker will definitely enable you to profit from ongoing volatility in global stock markets while many people lose great sums of money......" etc

Page 239

" Private One-On_one Consultations

During my Private Consultation sessions I provide very detailed and specific information that will grant you unquestionable confidence to take actionable steps to not only protect your net worth but also to greatly expand it as this crisis unfolds. During a Private Consultation session.

I will review

......"etc

I would suggest that the only person who will benefit if you purchase this book will be Mr Kim and his publisher. Do yourself a favour and avoid this one.

I found Confessions of a Wall Street Insider to be a totally refreshing outlook on investing devoid of all the silly concepts about investing that are false, but that most people believe to be true. For example, the author, JS Kim, clearly explains why some of the most widely accepted investment beliefs, like diversification, are truly sell side strategies that will never maximize your investment returns. Furthermore, he often does so in an entertaining fashion, using analogies to get his point across so that material that normally would be dry and boring, is much easier to read and digest. For example to explain the flaws in diversification as an investment strategy, JS uses a sports analogy. Furthermore, he states that during bull markets all advisors look good because a rising tide lifts all boats and many advisors ride this tide higher even though they have no idea what they are doing. In a bad market, however, JS states that diversification's dangers are multiplied for only a few assets will perform well and only knowledgeable advisors can steer you towards those few assets where those who diversify will be dragged down in the huge general declines.
In fact, JS even provides some ideas to what these assets may be, particularly gold. Much of "Confessions" debunks many of the widely believe investment myths like volatility equals risk. He explains in detail why this is not true and advocates gold even though he states that it historically has always been a volatile asset. JS again seems to be right on point with this concept as this year gold has been volatile but certainly no more volatile when compared to US markets, major European markets, and major Asian markets. Yet gold has significantly outperformed all those markets as an asset class over the past year.
One thing readers may have a hard time overcoming in grasping many of the concepts JS presents is what he refers to as "sheep herd mentality". Upon a first reading, JS warns that the reader's first reaction may be to discount much of his investment philosophy because it contradicts what the average Joe investor has been taught for the last 50 years. But JS claims that just because a "perceived" expert claims it is true doesn't necessarily make it so. On page 167, he states, "sheep find it mentally daunting and extremely frightening to stand against the herd even in instances when following the herd can be financially disastrous." If you are someone inclined to believe an authority figure just because they are an authority figure, then this book is one that you will probably not understand and perhaps you should continue to listen to all the authority figures that have told us the "bottom" of the crisis was here every month for the past 12 months. However, if you are someone willing to consider a new perspective with an open mind, then certainly many of the investment concepts JS advocates in "Confessions" make absolute sense for someone looking for a solid investment approach to deal with the next five years of this crisis.

This wonderful book helped me understand the sweeping macro-economic trends in the economy today. JS Kim spends significant portions of the book discussing the merits of gold as an asset to own during this crisis. At first, his claim that "gold is one of the most politically manipulated assets of all time" seemed conspiracy-tinged to me; however, today mainstream well-respected icons like Donald Coxe, the Chief Investment Officer of BMO Capital Assets, have since jumped on JS's gold manipulation bandwagon, issuing very public statements in 2008 of his belief that the US Federal Reserve engineered the selloff in gold. Perhaps JS was on to something earlier than the rest here.

As this was published in February of 2008, JS made several impressive predictions in the book that have since come true. For example, he firmly argues that "the crisis we are entering in 2008 is not a subprime crisis. It is a monetary crisis, specifically a Dollar Crisis, that will spread like the flu and afflict the Euro and the Pound Sterling as well." At the beginning of 2008, I don't believe that anyone predicted the type of selloffs in the Euro and the Pound that we have now since witnessed. He also predicted dollar rally possibilities in 2008 but made it clear that "any dollar rally that happens in 2008 will merely be an illusion." We'll have to wait and see if this dollar rally we have just experienced is indeed an illusion as JS claimed it would be. In terms of general global markets, he did predict that massive selloffs in global equities would happen which he slyly termed the "Peak Investment Crisis". In fact, JS made no bones about the fact that the crisis would "hit and destroy trillions of dollars in the global stock market."

JS also advises investors, in preparation for this crisis to forget about the commercial industry's mantra of diversification, stating that it is just a "sell-side" mantra designed to help incompetent advisors allocate your money as quickly as possible. JS claims that the real test of an advisor's true value is how he/she performs during bear markets, so I guess you can ask yourself the following question: if the major index in your country is down 45% this year, is your portfolio also down 45% this year? If so, do you really need an advisor to lose 45%? Instead, the author states that everyone should concentrate their portfolio during this crisis as only a few asset classes that will be poised to benefit from this crisis. While JS doesn't provide any specific stocks that he believes would perform admirably during this crisis, he does provide lots of research about his favorite physical asset to hold - gold, and why he believes that gold will prosper during this crisis.

Furthermore, JS spends a large portion of the book explaining why you shouldn't listen to the commercial investment industry for guidance through this crisis and explains why their motives are different from yours. JS claims that if you want to not only survive, but profit from this crisis, you cannot remain a "spectator" but that you must seize control of the management of your own portfolio. The reason most investors are scared to do so is because many people believe that commercial investment advisors know so much more than they do about investing and that they believe that without their "expertise" that they wouldn't know what to do. JS claims this as nonsense. He states that most advisors are salespeople masquerading as advisors and that since they don't really know what they are doing , you have no choice but to learn to do it yourself.

JS does repeatedly state in this book that this crisis is a monetary crisis that can get much worse than it already is. For those who agree with him, you will probably find this book very helpful. For those who think the crisis is over, then perhaps "Confessions" can still be eye-opening from the standpoint of learning about all the inside tricks and sales tactics of the investment industry from a self-proclaimed insider.