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Mr. Sherfin has written an entertaining, yet scholarly overview of the subject. It is pitched at the practitioner rather than the layman, so anyone wanting detailed financial planning advice or quick fire trading ideas is going to be disappointed. What you do get however is a fascinating insight into the reasons that long-term stock market anomalies continue to exist, and the forms that they take. This should finally bury the idea that markets are efficient.
A couple of beefs though; firstly, as Sherfin points out several times "investors learn slowly" in yet most of the time series he quotes seem to be 3 to 10 years - statistically pretty insignificant in making generalizations about market behavior. Secondly, while he is rightly cynical about he money management industry (and does a good job at exposing some of its less creditable tricks), he at once dismisses active money management - "a combination of private interests and behavioral phenomena provide the basis for the existence of this active segment" - and then goes on to document the success of Fuller & Thaler Asset Management in producing considerable excess return. So which is it Mr.Sherfin?...Read more