13 of 14 people found the following review helpful:
4.0 out of 5 stars
An informative book., December 8, 2009
This review is from: The Little Book of Safe Money: How to Conquer Killer Markets, Con Artists, and Yourself (Little Books. Big Profits) (Hardcover)
As of November 2009, Jason Zweig's book is the latest in the Little Book Big Profits series of books, most of which are very informative and well written. This book is no exception. The first thing to recognize about the Little Book series is that, well, the books are little--perhaps only two-thirds the size of most books. If this book were published in a more normal size and line spacing format, it would probably run less than 150 pages, but that doesn't really detract from the value of the book.
Much of the book covers some common sense concepts, like (1) don't take unnecessary risks, (2) don't take risks without sufficient expected return to compensate for taking the risks involved, and (3) don't risk money that you can't afford to lose. Zweig refers to these concepts as "commandments," and comes back to them throughout the book. He does a better job, in my view, when he addresses somewhat less obvious concepts, such as the (sometimes neglected) value of liquidity and the value of one's "human capital." For example, if you have invested years in your own education to become a geologist, then it might make sense not to concentrate your financial capital investments in energy stocks (because if the energy industry falls on hard times, your investments could suffer and you could lose your job at the same time).
Zweig is at his best, in my opinion, when he addresses the supposedly "low risk and high return" investments that the financial industry regularly puts out. He also deserves credit for explaining (1) how some "guarantees" are not all they are cracked up to be, (2) the difference between yield and total return, (3) how the risks that stocks seem to represent and the risk that they actually represent are often inversely correlated (think about that for a minute), and (4) why leveraged ETFs (exchange traded funds) may behave differently than some investors expect. There are more, but you get the idea.
I liked Zweig's discussions of the risks involved in hard assets and emerging markets, and I thought he did a good job pointing out the various unconscious biases many investors have, such as "anchoring" and "framing" that behavioral finance warns us about. The discussion of "Mr. Market" (an invention of the legendary Benjamin Graham) was very good, and I liked Zweig's collection of red-flag phrases for investors--like "can't lose," "guaranteed" and some less obvious others.
This book is an easy read not only because it's short, but also because Zweig has an easy writing style. I doubt that it will plow a lot of new ground for sophisticated investors, but for the rest of us, it represents a worthwhile investment.
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18 of 23 people found the following review helpful:
5.0 out of 5 stars
Excellent despite "thou shalt" language gimmick, November 10, 2009
This review is from: The Little Book of Safe Money: How to Conquer Killer Markets, Con Artists, and Yourself (Little Books. Big Profits) (Hardcover)
Excellent. The biblical "thou shalt" and "thou shalt not" language make it almost unreadable but the content is so good I kept reading. I especially like the details backing up every point. All the guidance is carefully argued and backed up. The footnoted stories are fascinating, like the details about the Madoff victims and their SPIC claims. Except for the religious language gimmick, this is a great personal finance book.
edit: I hadn't read the last chapters when I wrote the above. The weird sexist stuff at the end and the insistence we all use financial managers despite the first 3/4s of the book are not helpful. A maddening but recommended book.
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5 of 6 people found the following review helpful:
1.0 out of 5 stars
Surprisingly Disappointed, September 14, 2010
This review is from: The Little Book of Safe Money: How to Conquer Killer Markets, Con Artists, and Yourself (Little Books. Big Profits) (Hardcover)
A great and well respected author. So I was expecting to gain much from the book. Unfortunately, it is very simplistic covering material that anyone above a novice investor would already know. But mostly the author pillared almost every type of investment except TIPS (Treasury Inflation Protected Securities). TIPS are also not 100% safe because (1)the government establishes the inflation rate and, historically, they have always understated inflation and (2)this assumes the United States will never default or delay payment of debt obligations.
That the USA has never defaulted doesn't mean it never will. Personally, adding up the numbers (rate of increased spending, taxation, payment on current debt, etc.) leads me to believe there is no way out OTHER than a partial debt deferral (forever?). How it would be done is anyone's guess but Moody's is close to lowering our T bills from AAA rating. That would be disasterous. I rank TIPS as LESS secure than many of the investments he advised avoiding in his book. I am VERY reluctant to write such a review of a book by such a brilliant author. But I'm reviewing this book - not him and not his prior (excellent) books.
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