Most helpful positive review
18 of 21 people found the following review helpful
An important book for serious investors
on June 3, 2014
Personal finance and investing is a crowded space in the publishing realm, and it's rare to find a book that has as much to offer as this one. It has originality, brutal honesty, and simple instructions about how to implement the underlying principles.
The authors do not suffer fools, and they call out some of the most deceptive and manipulative practices in the advice industry. They provide a roadmap of sorts - that is designed to steer investors away from the temptations that distract, distort, and confuse.
The book provides a detailed and thorough list of seven "Deadly Temptations" that are intentionally designed to create the impression that investing is extremely complicated and the only way to succeed is by hiring an expensive advisor who will tell you what to buy and sell.
For example, the authors explain in detail why it's a bad idea for amateur investors (as opposed to full time professionals) to try to beat the market. "You are extremely unlikely to find a manager, an advisor, or a strategy that will enable you to predictably beat the market. It will be even more difficult to know whether you have found one. It will certainly not be worth the cost to try."
Notice that they do not say that beating the market is impossible. They said that it's extremely unlikely, and it will carry a high cost to try. I would add that the few professionals who do manage to beat the market consistently, aren't likely to share their secrets with the world and thus create competition for themselves.
The cost of trying to beat the market is significant, both in terms of the amount of time it requires and the dues that must be paid as you move up the learning curve, making mistakes that form the foundation of your experience. It can be done, but as the book asks, is that really the wisest use of your finite resources?
The other six temptations are equally revealing, and together with the three rules, this book is loaded with valuable and practical advice.