Invest Like The Best, Book with Diskette [Paperback]

James P. O'Shaughnessy (Author)

Book Description

Publication Date: January 1, 1998

Now, complete access to the lucrative investment strategies of today's stock market aces is only a keystroke away. With this remarkable book and disk, you'll easily uncover the stock-picking strategies of the nation's top money managers and learn how to use your computer to emulate the portfolios of Wall Street's wizards in your stock trading. Invest Like The Best shows you how to pattern your investment program on the methods of today's legendary stock pickers, from Peter Lynch to John Templeton. It does so by marrying James O'Shaughnessy's pioneering quantitative investing techniques with the data crunching power of Value Line's Value/Screen III investment software. In minutes, you'll learn how to configure your PC to analyze and emulate the investing style of the money manager(s) of your choice. You'll discover which quantitative core factors - cash position, P/E ratio, safety rank, yield, book value, and more - the pros rely on to consistently pinpoint and select the top stocks. And you'll gain strategic insights into how their specific investing styles - from growth to value - impact their performance. More, you'll see exactly which factors consistently show up in top managers' portfolios and how to use them to beat the street. From here, Invest Like the Best offers step-by-step guidelines and helpful templates for building simple, stable, reliable computer-based stock-picking models based on the masters' standards. Illustrative graphs and solid, concrete advice help you assess your strategy's variability and risk-adjusted return, then closely monitor its ongoing performance. For exceptional results, you'll create a hybrid investing strategy that combines the best elements ofvarious money managers' styles - and outperforms them all. Before you make your next investment decision, turn to Invest Like the Best and discover how to choose the optimum stock-picking strategies that fall within your risk-tolerance; identify and avoid a bad money manager before yo

Editorial Reviews

From the Back Cover

"[O'Shaughnessy is] one of the most original market thinkers we've come across."-Highter Returns "Awesome!... One of the best financial books of the years!-Forbes Magazine "O'Shaughnessy is a statistical guru"-Barron's From the best-selling author of What Works on Wall Street-How every investor can capitalize on the stock-picking strategies of the nation's top money managers with just a computer... and this book. You don't have to be a wall street expert to build an ace portfolio. Investment guru James P. O'Shaughnessy shows you how to turn your own PC into a strategic investment weapon that decodes the investment strategies of the nation's top stock-pickers and duplicates their techniques in your own investment program. About the Author James P. O'Shaughnessy is chairman and CEO of O'Shaughnessy Capital Management, Inc., a Greenwich, Connecticut investment advisory firm and is recognized as a leading expert and pioneed in quantitative equity analysis. He serves as the managers of the four no-load funds in the O'Shaughnessy Funds family. O'Shaughnessy's investment strategies have been featured in The Wall Street Journal, The New York Times, The Financial Times, The Los Angeles Time, The Barron's, Forbes, Smart Money, Denmark's Borsen, Worth, and Money. He appears regularly on CNBC and CNN. His previous book, What Works on Wall Streeet (McGraw-Hill, 1996) was a BusinessWeek and New York Times business bestseller.

Product Details

• Paperback: 272 pages
• Publisher: McGraw-Hill (January 1, 1998)
• Language: English
• ISBN-10: 0079137547
• ISBN-13: 978-0079137548
• Product Dimensions: 9.2 x 7.3 x 0.8 inches
• Shipping Weight: 1.1 pounds
• Average Customer Review: 3.5 out of 5 stars  See all reviews (6 customer reviews)
• Amazon Best Sellers Rank: #1,564,636 in Books (See Top 100 in Books)

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Customer Reviews

Most Helpful Customer Reviews

16 of 16 people found the following review helpful:

4.0 out of 5 stars shows you how to emulate the leading mutal funds, August 23, 1998

By A Customer

This review is from: Invest Like The Best, Book with Diskette (Paperback)

Using your computer, O'Shaughnessy shows you how to find out the leading factors that mutal funds use to pick stocks. He provides insite and information on both value and growth investing. It is geared toward the long term investor. The book shows how using your computer you can enter in these factors and screen 1,600 stocks. The ones that match your screen will show up on the screen. This beats sifting through stock tables.

8 of 8 people found the following review helpful:

4.0 out of 5 stars Similar to his other books but still interesting, November 15, 2001

By 

Tim Josling (Melbourne, Australia) - See all my reviews
(REAL NAME)   

This review is from: Invest Like The Best, Book with Diskette (Paperback)

His theory is that by analyzing the holdings of top mutual funds, and then determining how they differ most from the index, you can then emulate the mutual fund's performance.

You can even improve on the performance of mutual funds because you can follow their strategy in a more consistent fashion and because you can reduce their strategy to its essential elements. Often even good fund managers are not entirely consistent.

An example of a strategy is: from the stocks with

12 month EPS gain >20% and
26 week % price change>20% and
Last Qtr EPS % chg > 20% and
Valueline Timeliness Rank <=5

Pick the ten stocks with highest estimated EPS growth for next year .

He explains how to do all this in detail and derives some good looking strategies. Risk is taken into account and proves to be a very useful measure of the reliability of a strategy.

You can use the same techniques to evaluate your broker's recommendations, and the advice from books and newletters. Do they follow a strategy or is it just random tips and hunches?

He also showed how various fund managers changed strategy quite radically without announcing it eg Magellan in the early 1990s.

There are some good tips on how to avoid common traps when using quantitive strategies eg using single variable strategies.

He also explores combining various strategies and shows how to build your own.

He did not really prove his theory which is that noone really makes money by individual stock picks, it is all strategy.

As a final caveat, if you don't like numbers you will not like this book. But it seems you cannot succeed in investment without being very friendly with numbers.

10 of 11 people found the following review helpful:

4.0 out of 5 stars Help!, July 1, 2003

By A Customer

This review is from: Invest Like The Best, Book with Diskette (Paperback)

I'm missing something here: the apparent feasibility of the author's stock-picking techniques with my little PC?

I found the floppy disk accompanying the book unreadable. My local computor builder/dealer/consultant couldn't read it either. My computer kept calling for another disk, which did not come with the book I ordered or with its replacement. The disk seems to herald back to the days of DOS; whatever, I'm lost.

More on the downside, the valueline online survey is unmanageable for me (I got a masters in English and I've been studying and investing stocks for 25 plus years). Determining the average for numerous search fields (market cap., P/E ratio, Price/Book ratio, etc.) that O'Shaughnessy calls for cannot be done with the basic online service. A simple piece of data such as "dividend" or "yield" can be tough to pin down with 7-8 different kinds listed (estimated, quarterly, current, etc.).

The book, in spite of my moronic protests, is praiseworthy. The methods make sense. There is something beautiful about their simplicity - the step by step processes of narrowing down fields in order to determine the best bargains (value) or the best upside potential (growth).

A guiding principle of O'Shaughnessy's argument - the answer to the nagging question of why so many portfolio managers fail - is very simple: they either have no useable plan or they do, but they don't stick to it.

I'm convinced this book has the answer. It's just so damn grueling to apply the principles; a dozen calls and emails to valueline still leave me clueless.