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on January 22, 2013
This is a great first book for the diligent investor. By diligent, I mean a person that actually wants to do the footwork involved with learning how to invest on his or her own and wants to be able to speak the language of the stock market. For the person who is not willing, or simply not interested, in putting in all the work involved in learning how to invest, there are other options out there that may be better, such as financial advisors (if you want the hand-holding and/or don't mind spending more on commissions for the advice) and ETFs (exchange traded funds, which if picked right simply move in tandem with the market). However, even the passive investor could learn a lot from reading or even just skimming through this book.

Kelly begins at square 1 by describing what the stock market even is, and how it functions. He discusses very basic things, such as the difference between a full-service and a self-service broker, and the way that stocks get listed on the exchanges in the first place. His tone and style are welcomed, as he neither presumes that you know anything prior to reading, nor is he paternalistic or presuming that you are incompetent.

Unique to many books, Kelly sums up the philosophy of some of the tried and true "master" investors. His list includes Ben Graham, Phil Fisher, Warren Buffett, Peter Lynch, Will O'Neill, and Bill Miller. By examining multiple investors in the way he does, Kelly truly shows that there is more than one way to successfully invest in the stock market. Graham is the model value investor, focusing on stocks that are undervalued. Phil Fisher is a growth investor, focusing on superior companies that he expects will keep growing. Warren Buffett is a combination of Graham and Fisher, and focuses on buying high-quality companies, among other things. Peter Lynch categorizes companies into different types of stocks and emphasizes fundamental analysis by really checking out the company. Will O'Neill is the epitome of a growth investor and focuses on momentum with his CANSLIM method. And lastly, Bill Miller is a value investor that focuses on contrarian positions, among other things. Kelly's tidbits of interview with Bill Miller are a welcome addition to this edition of the book, mostly because it is difficult to find very much material with Bill Miller's thoughts (the other 5 "masters" have all written their own books). It was a mild disappointment to me that Seth Klarman was not included in the "masters" list, with his focus on absolute return rather than relative return. But all things considered, Kelly presents a fairly comprehensive list of 6 as a base, shows the areas where they agree, and ultimately encourages the reader to learn in their own way from this.

Perhaps most importantly, Kelly goes through the basics of fundamental analysis, which is the way that most of the masters go about analyzing stocks. These included things such as Price to Earnings ratio, Price to Book ratio, Price to Sales ratio, Market Cap, Dividends, Current Ratio, and a few others. He walks the reader through the basics of the income statement, the balance sheet, and the cash flow statement. In going through them, he rightly points out that different people place different emphasis on them and the way that they determine whether to buy a stock. He also points out that fundamental analysis is the way that investors (rather than day traders) evaluate stocks. Kelly also takes note of technical analysis (what day traders typically use), and points out that some people believe the market can be timed with prediction charts, while also not making any conclusion as to whether he thinks that is possible or not.

Kelly gives the reader advice for how to conduct his or her own research when contemplating what stock to buy. This includes gathering information from various websites (such as Yahoo! Finance, Google Finance, fund newsletters, etc.), publications (WSJ, Barron's, IBD, etc.), ratings companies (ValueLine, Morningstar, the S&P, etc.) and the companies themselves. Further, he goes through the steps that the reader should consider regarding when to think about selling the stock, which includes both good reasons and purely emotional ones. Kelly employs a method called the "Fearsome Foursome," which I personally use to this day. It more or less forces the reader to know why they bought, what motivated them to hold or sell, and to look back over time and learn from it.

Last, Kelly discusses how the reader should structure his or her own portfolio of stocks. He lays out a method of averaging in both small and mid-cap stocks, which is helpful for readers who want a good starting point. But ultimately, he encourages the reader to learn to do his or her own due diligence.

This book is not radically different from previous editions. So if you already have the 2010 edition, I'm not sure it'd be worth buying this one too unless you are just an overall fan, want a refresher, or want the tidbit of interview with Bill Miller. It is helpful to anyone that wants to learn more about the stock market as a beginning investor. And it is helpful to the intermediate/advanced investor that would like to just brush up on the basics of analyzing stocks and remembering the way that stocks work. But the book is clearly geared towards the person that actually wants to learn about the stock market and how to analyze and value various stocks on their own accord (rather than be told what to buy). Keeping that in mind, I believe it achieves its purpose. Thus, I give it 5 stars.
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on January 15, 2013
I started reading Jason Kelly with his 2012 Edition of this book about a year ago. At that time I had no real experience with investing but wanted to learn. This book was a springboard for me into the world of investing and personal wealth management. Jason does an excellent job in this book explaining theories and concepts that can be very difficult in a simplified and easy to understand way. I wish my college finance & accounting professors were as skilled as Jason.

The book begins where it should, at the beginning. It assumes the audience knows nothing about stocks and how the stock market works. It proceeds to discuss the various metrics investors use to analyze companies, how those values are derived, and why they are relevant. Next Jason discussed the great investors in recent history, how they came to be so successful and what you and I can learn from their strategies. Finally, after giving the reader a base of knowledge and background Jason lays out his strategy for success and why it works. Along the way, the book is sprinkled with great resources and references that have been invaluable to me.

Since reading the 2012 Edition of this book I have been a religious reader of Jason's newsletter found at and I look forward to it each Sunday morning with my coffee. I cannot wait to get my 2013 Edition in the mail and look forward to the updated material. Finally, I can personally attest to the Jason's strategies as I have had excellent success in the markets over the last year and greatly outperformed the S&P 500.

My two cents.
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on March 25, 2013
I liked:

- Kelly provides a great system for categorizing and evaluating individual stocks.
- He provides the novice with plain explanations for terms and measurements that they may not have been familiar with.
- He provides references for all recommended research and describes how to find them.
- His writing style is easy to follow and occasionally humorous.

I didn't like:
- Kelly does not address taxes on gains. He provides several strategies that require selling shares on frequent occasions and compares return rates without considering the effect of taxes on those gains. Other investment advice I have read recommends not actively trading stock in this fashion because it is highly unlikely that you will keep up with the market due to your losses from taxes, timing errors, and commissions. I would like to see Kelly address this oversight in the next edition.
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on September 17, 2013
I bought this book because I wanted take a more active role in managing my retirement investments. As a point of reference, I have been investing in mutual funds for the past 10 years or so, mostly because I like the "set it and forget it" aspect of it. A few times per year I take inventory and see how my funds are performing - maybe may a few adjustments and rebalance - but that's basically it. I have an MBA (for whatever that's worth these days) so I am able to navigate a company's financial statements without too much stumbling.

In making my decision in taking a more active role in my investing, I wanted to knock the dust of my financial and market knowledge (I don't use it much in my day-to-day job) and get a better understanding of what financial indicators made for good investment targets. This book did the job perfectly.

For a first-time investor, this book provides an easy to understand basis of financial analysis. It also discusses several investment strategies that are not the "get rich quick" strategies I have seen in other publications. Most of the strategies revolve around analyzing a few indicators to create a target set of companies, doing extensive research on those companies, then investing and holding on to the stock.

DISCLAIMER: If you have a financial background and are looking for a book on advanced trading schemes and options, this isn't the book for you. Don't go bashing this book for what it is - a basic understanding of how to invest in the stock market.
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on June 26, 2013
This book is a great first read about the stock market. The author presents some basic technical info (P/E, Price/Book, MACD, RSI and others) in a simple and concise way while also providing insight into what the metric means about a company and how it may be manipulated (Earnings, for example).

He also provides background from several stock experts and mentions their books should you wish to continue your education.

One of the more important features of this book, IMO, is that Jason presents a strategy for how to build a portfolio and how to choose stocks. I think this is something that beginners are really looking for; guidance as to what to look for and how to get started. Knowing some introductory stock metrics does not give you an investing philosophy.

Also, Jason posts the quarterly performance of his portfolio (which is based on the methods in the book) on his website.

If you are interested in getting in the stock market, I suggest reading this book and then reading books by some of the experts in here (Phil Lynch, Warren Buffet, Ben Graham, etc) and then starting a virtual trading account, which lets you trade real stocks with fake money. OptionsHouse is just one of the online brokers that offers virtual trading. Most of the online brokers also have good educational information for all levels of investors. Read their material while your doing virtual trades and try to pick stocks and learn about options, and then try them out in your virtual account.

If you can make money for a few months in virtual trading, then you're probably ready for the real thing.

Your virtual account will still be there, so you can buy a few real stocks and play with options in your virtual account until you understand what you're doing.
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on September 6, 2013
I first bought the 2007 edition of this book when it was released for Kindle. I never got around to reading it when I bought it. But recently, while researching 529 (college fund accounts), my interest in stock investment grew to a new level and I started reading the 2007 edition of the book that I bought several years ago on my Kindle.

For a beginner, who knew absolutely nothing about P/E, EPS or Beta, this book is godsend! The author has written it for the right audience and by the time I finished reading it, I feel that I have a very good understanding of stock investment, how to do the research and how to look at the fundamental and technical analysis.

This books does such a great job of covering every topic imaginable that after finishing the 2007 edition of this book, I bought the new 2013 edition and read that too. The new edition covers the housing bubble and gives very good analysis from a stock investment perspective.

I learned so much so quickly from this author that I don't think I could have no matter how many articles I had read. In fact I now understand stock investment so well that I have made my own strategies about how I want to invest.

To be honest, I do not agree with some of the advice that Kelly has given about leveraging indices. Leveraging can be too risky because the losses are multiplied.

Overall, this book is priceless! I highly recommend it to anyone who is venturing into the world of stock investment. If you have to buy only one book that introduces you to stock investment and guides your through the whole process, BUY THIS BOOK! You won't regret it.
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on May 27, 2015
Let me start by saying that I have read quiet a few books on the stock market, how to invest, and tips and techniques and most books try to sell you the same info you could get from Investopedia for free. Since I am also a huge advocate for Investopedia, my comments about this book should hold more weight than other reviews. Mr Kelly goes beyond simply describing some technical analysis or what technical indicators mean, he does much more than give definitions about certain market investing buzz words. I mean, he does in fact, help you with definitions but he also goes into detail about how to use the information in the book. He even gives you charts and tables with actual returns that have been made with the techniques he describes in detail. This is a great book. For $15 or whatever the price is you get much more than a subscription to Motely Fool or one of those other investing services. Kelly teaches YOU how to shop for a stock and how to get good entry points and exit points. He even details the history and success stories of famous investors so you can use their techniques too if you choose, starting with Graham, Buffet up to Lynch.

The is one of the best books on the market for beginners or intermediate investors/traders. if you are a beginner it will take you to the next level and probably even reorganize the portfolio of someone considered intermediate. The info in this book is well worth the price.
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on April 6, 2013
This book was great. As a beginner investor, I learned a lot about the basics of stock market investing. The author breaks down the information of what you need to know to feel confident. He bases this information on backed up data by O'Shaughnessy's research, other prominent investors, and his experience. The author is very opinionated, which I like because I want to know what the author does personally when he invests. I read one book before I read this and it was highly conservative. It made me never want to put my money into the stock market. Anyways, the author showed several techniques using charts as to when to buy or sell your stocks. Although I got the implication from that section that I will always be buying or selling every month or so, this contradicts keeping stocks long term. Additionally, if I am told correctly, buying and selling short term (less than a year) puts you in a higher tax bracket than if you were to keep the stocks long term (more than a year). The tax % difference of the short and long term capital gain is a big deal to me, which I learned about in the book I read before this, because the government is taking a relatively big chunk out of your potential gain! The author doesn't go into tax discussion, but regardless, if selling short term, you still make money, just less. I hope for future editions the author can discuss his thought process and how to approach taxable gains and/or loss. I didn't really think this was a beginner's book, but I didn't think this was an expert book either. I didn't think it's a beginner's book because it's not a textbook-like book where it gives you a definition of what a certain word means. Instead, it gives you an analogy. I didn't think it was an expert book because, like the author said, he left out all the financial equations. I think reading this book in conjugation with is a good combination to answer your own questions. I also think reading another book for a second opinion is good for understanding the different ways different investors use the terms. This book definitely increased my investing vocabulary AND understanding and confidence significantly. I recommend getting this book.
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on March 18, 2015
This is the second book I have read by Jason Kelly, and because of his easy to read informative writing style, his ability to entertain, and how he relates to my own personal investing experiences, I read this book in two days, just like his "3% Signal." This book is perfectly situated for the novice or new investor who wants to gain information and a working knowledge about the ins and outs of the stock market. His review of six investing masters (Benjamin Graham, Philip Fisher, Warren Buffett, Peter Lynch, William O'Neil, and Bill Miller) is especially valuable information for any investor. For someone who wants to gain a working knowledge of how to invest in the stock market, this book would be at the top of my list. I am starting to become a big fan of Jason Kelly and have confidently recommended these books to my family and friends.
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on April 10, 2016
This book is very good at what it aims to do. And that is demystify investing. It explains everything from the very beginning answering questions like what is a stock market? and how do stocks make money?

The best part of this book is in the second chapter where the author explains the styles of some of the best investors of all time in a very straight forward manner.

Overall that second chapter alone is worth the money in my opinion.
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