Customer Reviews

Secrets of the Investment All-Stars

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1 star:		(5)

 

 

Too many "Financial Experts" make the bulk of their living by writing "expose's" of the "secrets" of top money managers, market timers and guru's. All too often, these books amount to 200 plus pages of feel-good hype that give financial advice of the same caliber as you're average "psychic" hotline. Reading Mr. Stern's book was a pleasant surprise, to say the least. It begins with the best possible summary of the modern investment marketplace in the concise manner in which it is presented. When reading the following interviews, one can easily see that the focus is on the individual style of the "All Star" that gives due credit to their achievements and pleasantly lacks "medicine show" hype. The author's main point, to the best of my knowledge, is that there are many successful approaches to investment. What separates the winners from the underdogs isn't a "secret" strategy, but common sense, integrity, and sound money management skills.

I'm surprised at the errors in this book. For instance, in Chapter 5's description of value investing, the author defines "Capitalization Rate," as what is really "Market Capitalization," and then in the Cheat Sheet section says "the higher the capitalization rate, the more risk involved."

It makes you wonder about any advice given in this book.

The experts interviewed in this book have all shared their passion and formulas for investing. They are all very credible professionals and offer sometimes very different methods for success. Mr Stern does a fine job in making a complex subject easy to read and to understand.

This book, in my opinion, is very poorly written and does not present the theories very accurately. There are tons of errors which I post below:

1.Page 17 regarding indexes. There are two main types, price weighted and value weighted. General Electric would NOT influence the DJIA as much as 3M would. DJIA is price weighted which means it is representative of ONE SHARE from each company. Stocks with higher share prices NOT market caps will influence the DJIA. GE trades at $39 so it will have one of the LEAST influence on the DJIA. However, the S&P500 is value weighted meaning companies which have larger market caps will influence it most. In this case GE will have a large influence but not on the DOW. 2. Page 22. Systematic risk IS NOT diversifiable. UNSYSTEMATIC is. Think of about the term systematic. IT MEANS MOVES SYSTEMATICALLY with the market which is not diversifiable. NONSYSTEMATIC means uncorrelated to the index which is firm specific and is diversifiable.

3. Page 25 author recommends charting. NUMEROUS academic studies show this is absolutely useless (most forms of technical analysis are).

4. Page 80 on ALPHA. This is totally wrong. Alpha is the extra return you get above a "fair return" given the asset's risk level (beta). Or for the more sophisticated, alpha is the return above the Capital Asset Pricing Model derived return for an asset.

5.Page 81 on Standard Deviation. This is very very wrong and misleading. Standard deviation, in layman's terms, is simply how much a stock deviates from its past average return on a day to day or month to month etc basis. YOU CANNOT SAY THE MARKET HAS A SD OF 1. THIS IS MISLEADING. The last line is false in regard to SD. MPT does not imply you should accept no more deviation than the market. If you margin stock you can still remain on the capital allocation line and have a higher deviation than the market portfolio and still be entirely efficient as per MPT.

6. Page 124. Free cash flow is NOT what is left over after current assets pay current liabilities. THAT IS SIMPLY WORKING CAPITAL.

7.Page 213. Again, incorrect information regarding the balance sheet account called land. LAND CANNOT BE REAPPRAISED

Ken Stern interviews 9 eminent investors with very diverse investing styles and perspectives . He covers index investing with John Bogle ,modern portfolio theory with Markovitz, forecasting market trends with Marty Zweig and value investing with Mario Gabelli , to name a few . Seeing all these different approaches drives home the point that investing is an art as well as a science (however imperfect and empiric)___there being the proverbial 1001 ways of skinning a cat ! I noticed that some of the earlier reviewers were a bit dismissive of the experts culled in this book .Well that was prior to the Nasdaq slaughter in the yr 2000 (Nazz down 39% !) I hope that the last year has taught folks who had seen the markets go only skyward that investing is a complex (and fascinating) art and more than just buying and selling the latest fad ! Unless you are the absolute tops as an investor you will take away a useful nugget or two from this book____if nothing else you will realise that there is more than one way of investing successfully and you can fashion your own electic style , based on your temperament and risk tolerance .

I found this book to be both fascinating and informative. Learning the different strategies, thoughts, theories, and dispositions of these nine "superstars" was very interesting. It helped me a great deal with my own thoughts about investing. Best of all, the book is written in a way that I could easily follow. It was a pleasure to read. I will recommend it to my friends and family.

Ken Stern's "Secrets of Investment All-Stars" is an incredible guide for all investors. Each investor offers clear, concise advice on how to pick stocks and manage your money. Most impressive are their personal success stories and the happiness it brought them. Their willingness to share their secrets makes this an invaluable guide to all who wish for similar financial prosperity.

I really enjoyed reading this book. Ken Stern managed to get some of the best in the business to reveal their "secrets". Reading and truly understanding this book was like earning a masters degree in finance from Harvard - I feel truly educated. Now, if I can only devote the time necessary to implement all this knowledge - - - maybe I can become rich too.

After 21 years of somewhat successfully handling my own investments, I now realize how much of a novice I truly am. Ken Stern's analysis of the "real" way to be an investor and not a gambler is based on the actual success stories of some of America's greatest investment experts. This book is required reading for anyone who wants to make money in the stock market. Do yourself a big favor...read this book...it will change the way you think about your money.

The world is full of investment books that offer better wisdom from better investors. In my opinion, many of the experts in the book lack credibility. This one will be $3.95 in the sale rack in no time at all.