Customer Reviews

The Neatest Little Guide to Stock Market Investing, 2010 Edition

5 star:		(65)
4 star:		(8)
3 star:		(1)
2 star:		(1)
1 star:		(2)

 

 

This book is a great book for anyone looking to invest money in the stock market. I have read many investment books and stock trading books and this is one of only 3 books that I would advise a new trader or investor to read.

The author, Jason Kelly, starts by explaining "Why Stocks are Good Investments". Jason points to strong and true facts that show that owning stocks is one of the best ways of increasing wealth over time. He explains how you make money in stocks and goes into the difference between "total return" and "capital appreciation". Jason then explains why companies even sell stocks and how that works. If you are new to stock investing or trading and you do not have a clear understanding of this then you should read this. There is a quick section also about how to choose a broker to help you buy and sell stocks.

Jason then goes into "How to Evaluate Stocks". He explains the difference between value and growth investing. Jason does a great job of defining and explaining all of the most common terms in evaluating the fundamentals of companies including: current ratio, EPS, ROE, Net Profit Margin, P/E, and P/S. Then he explains common terms for evaluating the technicals of the stock price including: SMA, MACD, RSI, relative price strength, and volume. Knowing and understanding these terms is a must for anyone who wants to invest or trade in individual stocks.

After reading the 1st 3 chapters you will know half the things they teach you in a 4 year Business Degree. Believe me, I have a degree in Business.

Then Jason tells you "How the Masters Tell Us to Invest". Here he summarizes how each of the best traders and investors of all time advise individuals to build wealth. He covers Benjamin Graham, Phillip Fisher, Warren Buffet, Peter Lynch, William O'Neil, and Bill Miller. You could read whole books about each one of these investors or you could just read these sections in Jason's book where he breaks down their main points. Jason then has a section where he finds the common points that all these investors share called "Where the Masters Agree". This section will be the backbone for the strategy of the author.

Jason then explains "How History Tells Us to Invest". Here Jason explains some backtesting on various investing methods and shows that combining Value and Growth Investing is one of the best ways to build wealth over time.

Then we get into the real meat of the book. Section 4 "Permanent Portfolios" introduces you to easy to follow strategies to beat the market over time. This is where both new and experienced investors who have not read this book before will be able to really benefit by reading this. If you are someone who wants to beat the market by only looking at and adjusting your portfolio for a few short minutes about 4 times a year then these strategies are for you.

Jason also has the most exhaustive list of resources for stock research I have ever come across. When you read "Research to Riches" section you will have a gateway to all the best data on stocks available through many many sources.

In "This Books Strategy" Jason explains how we will use the "Permanent Portfolio" to build our fortress of wealth and then create and maintain a watch-list of individual stocks that we will send out of our fortress of wealth when the time is right to bring back even higher returns. Jason thoroughly explains how and where to gather information and compare it to stocks you already have on your list so that you are not overwhelmed by all the data and stock gurus available. Jason explains when may be good times to buy and when may be good times to sell stocks. He also has a very interesting way of tracking your performance and reviewing your choices to learn from the past.

And of course he has an investment website and "Letter" to compliment what we have learned in this book. The website is a great way to read his recent observations which he updates with new articles on a regular basis and is available to anyone for free. And he has the "Letter" which is a very affordable service (about $5.35/month I think) where he emails members on updates of his portfolios and his view of the market direction. I recommend at the very least to check it out on his website where you can find a sample "Letter" and see how his portfolios have performed against the "market".

I see a one-star review here that says this book is for neophyte investors. Yes, it is! It's also for experienced investors. I have 400% in total portfolio gains over the last two years. I'm not inexperienced- and I find substantial value in this new book, as I did in his earlier one that helped me learn my investment strategy.

Occasionally someone will ask how I managed to achieve such gains in a recession, and I tell them how I follow fundamentals- value, potential, risk assessment, and so on. I'm amazed at the number of people who think that's crude strategy... but yet to find such a person who has done as well.

One of the reasons some "experienced" investors don't do as well as they should is that they forget the fundamentals, or start believing fundamentals are negotiable or don't apply to them because of their accumulated wisdom. Experience can get in the way if you start thinking that doing something for several years automatically makes you good at it, even when your gains are say you're not. Hogwash can get in the way too, and the investment world has plenty of that. It hides the important stuff, and distracts investors from what really makes the differences.

Jason is one of the very few investment writers who is clear and concise, and never loses sight of the fundamentals of investing. No hogwash! He gets to the point clearly and concisely without adding copy designed to impress or confound you with his wizardry. His books are actually designed to help investors understand and profit... while most books are designed to sell, and make the author profit. Don't expect the fancy stuff, the confusing techno-babble. Expect the core information that allows you to understand and remember the fundamentals, to grow and become better and better. One of the best investment bucks you will ever spend.

I am new to trading in the stock market and with all the hype about online trading options I decided to give it a try. I figured I had nothing to lose since my financial adviser isn't doing much with my money. This book is very well written and easy to understand even for a beginner for me. If this book helped you, another book to check out is How to Pick Hot Reverse Merger Penny Stocks. This book helped me a lot. I started turning a profit within the first month investing. If you are looking to turn huge profits I recommend you read this book.

This book provides a good basic education on stock investing. So if you are a beginner it is worth the read, if on the other hand you are already investing or trading skip to more advanced books.

In the section on evaluating stocks the author advocates using classical measurements such as PE ratios, price/book etc. My experience has shown that PE ratios are not the cause of a stock performance but the result of it. That is, stocks already experiencing high growth tend to have high PE ratios and if you used PE ratios as one of your criteria you would have missed the best stocks in recent years. I have found that a combination of stock holders equity and retained earnings is a better measure of future performance. A steady increase in stockholders equity with 15% year over year growth in retained earnings is usually a better indication of future price advance.

I was somewhat disappointed with the lack of depth in the section on technical analysis . These days holding times for stocks are becoming much shorter making technical analysis a major part of an investors decision on timing a stocks purchase.
A major part of the book lists resources for investing. In my opinion this was somewhat of an overkill since these resources can be easily found just by doing a simple internet search.
You can learn some basic investing information from this book but before acting on any specific stocks, I will be sure to read other more advanced books first.

The book repeatedly tells you that it's very important to thoroughly research any company in which you're thinking of buying stock, however it doesn't tell you anything about the kinds of things you're looking for in your research. The author mentions keeping a folder of information on companies of interest and defining reasons to sell, but there is almost no discussion of what one should look for in that information, how one should determine when to sell a stock, nor how one determines a good price at which to buy a given stock. In particular, without any information on stock valuation, I can't see how an investor could make reasonable purchasing decisions.

Also, I found it odd that after writing that the stock market, on average, returns a little over 10% a year, the author encourages us to "leverage the DOW", all of which methods appear to under-perform the total stock market. Why aren't we just throwing our money into index funds?

I recommend The Five Rules for Successful Stock Investing over this book.

I would consider myself as an investing/stock market "beginner".

That being said, I read this book in 2 days. Mr. Kelley lays everything out in a way that is easy to understand for those of us who aren't affluent to all the market lingo. Once I got started, I wasn't overwhelmed with complex terms or formulas. I found myself not wanting to put the book down because I was learning something new and personally applicable after each page.

There are 8 sections to this book:
1. Speak the language of stocks - in this section the basics are discussed ranging from what the stock market is, basic terminology and valuation, why to invest and how to evaluate stock.
2. How the masters tell us to invest - this section breaks down the philosophies (in everyday, normal language) of greats Graham, Fisher, Buffett, Lynch and O Neil. You'll be amazed at how simple their investing outlook is)
3. How history tells us to invest - this section takes a few of the critical basics from section 1 and expands on their importance. It also delves into value and growth investing and how to use both to your advantage
4. Permanent portfolios - this is my favorite section. It gives a few strategic examples on how to invest in regards to the dow without having to research hundreds of stocks. The results are broken down by year and performance. I think this is very useful to the investor that is still a little intimidated by trading his/her own individual stocks and wants a guideline ot template to use.
5. Get ready to invest - this section gets you ready to pick a brokerage and get started. It contains a lot of info you probably know, but some you didnt
6. Research the riches - this section shows numerous ways and places to find stock data and how to use it
7. The books strategy - this section details Jason Kelley's "stocks to watch" worksheet column by column. It also taps on how to react to market fluctuations and how or when to sell
8. Bon voyage - this section cotnains appendices and a quick summarization of each section. Very helpful when you need to go back and research something from the book.

I haven't read too many of these types of books but I think I picked a great one from the start. I don't consider myself ready to go out and invest my life savings after reading this but I did feel confident enough to use a few of the dow related strategies Jason mentions in section 4.

I highly recommend this book for the beginner to average investor.

I picked this book up hoping to learn a little something about the stock market, instead I have come away with more knowledge than I ever thought I'd get out of a book. The book covers the basics and shows you how to evaluate stocks, build you own worksheet and also includes strategies. I finished it excited to start investing and use everything I had just learned. Jason Kelly breaks everything down so it is easy to understand and very entertaining to read. It's a great book and I'd recommend it to anyone interested in understanding the stockmarket.

Well, I've had this book for a couple of months now and, of the dozen or so investment books I recently bought, it has turned out to be the one I reference most. I think this is because it is comprehensive at the right level of detail to give the Average Joe a really good handle on stock market investing. It goes from the very basic (what is and why is there a stock market), through summaries of lessons from important and universally recognized masters of investing, through what we can learn from the history of the stock market (including recent events), and then into an overall strategy that incorporates lessons from the above.

For me, perhaps the most important part of the book is the overall strategy. Many other investment books focus on techniques for picking stocks (and Kelly's book covers this, too) but leave me feeling like I was dumped into the ocean with several very detailed (and conflicting) instruction books on how to swim but not even a pointer to the shore. Kelly's book gives you both detailed instructions and overall direction. This should give you the skills and confidence to embark on a successful investment journey.

The chapter on Master Investors may prompt you to dig deeper into the investment philosophies of one or more of those masters. (I recommend William J. O'Neil.)

I also recommend Kelly's newsletter. It's inexpensive and quite informative.

I find that the best sources of realistic, actionable financial insight and analysis come from those people located far, far away from "Wall Street" -- Jason Kelly is one such source.

Jason Kelly's 2010 update is a fantastic addition to any investor's library be they just starting out or experienced. As with his weekly Kelly Letter, the book's tone is common-sense, conversational, and friendly ... yet provides a hidden wealth of useful insight and/or friendly reminders on controlled individual investing.

In particular, I found his discussion of the seldom-mentioned Value Averaging as a viable long-term wealthbuilding methodology that I will begin incorporating into my own retirement account. That's one of the strategies he offers readers for their consideration -- however, contrary to the comments made by other reviewers, he does not focus exclusively on using leveraged ETFs and his discussion of them as trading tools both is fair and properly-explained to readers who may be enticed by their potential returns. In fact, his Value Averaging method is UNLEVERAGED, which is why I like the idea for a long-term investing style.

I have recommended his book to others and will do so here in my first Amazon review, too. :)


(Disclosure: I'm a Kelly Letter subscriber and been investing/trading for over 20 years in various capacities.)

To be completely honest I think this book should be read by the entire population! Haha. But seriously if you feel uncomfortable about investing this book really makes things much clearer and its an easy and fun read. I'm not a big book reader and oddly enough I couldn't put it down. My GF commented on how I would get completely lost in reading it. I think it too me three sessions to finish it. Some of which was just because I thought I should stop and digest the info. This book gets you excited about investing with a very grounded perspective and explains all the details at just the correct timing and in a logical manor. Some sort of investing is the key to long term financial security. As much as buying stocks can seem like something only people with lots of money can do that is completely false. This book puts it perfectly into perspective.

I would also suggest 'The Options Course' By Fontanills. Its not near as good of a read but it makes up for it in content and technical info.

People without a ton of money: There isn't a day on the stock market that goes by that you couldn't turn a hundred dollar stock purchase into $110 or more and just today I saw a stock option that was selling at $.45 and went up $.70. You could have turned $90 into $230 in about a half an hour. Read, watch read, read, think, read, watch then invest!