- Series: Fisher Investments Press
- Hardcover: 320 pages
- Publisher: Wiley; 1 edition (March 30, 2015)
- Language: English
- ISBN-10: 1118973054
- ISBN-13: 978-1118973059
- Product Dimensions: 6.2 x 1.2 x 9.1 inches
- Shipping Weight: 1.3 pounds (View shipping rates and policies)
- Average Customer Review: 3.8 out of 5 stars See all reviews (40 customer reviews)
- Amazon Best Sellers Rank: #231,006 in Books (See Top 100 in Books)
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Beat the Crowd: How You Can Out-Invest the Herd by Thinking Differently (Fisher Investments Press) 1st Edition
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“..a characteristically lively read….a good holiday read for any investor who suspects they may be stuck in their ways and in need of new insights” (Money Observer, July 2015)
From the Inside Flap
Mainstream investors are wrong more often than right. Most folks intuitively know this, and statistics and studies back it up. How can you buck the trend and be right more often than wrong?
Many believe doing the opposite of everyone else is the key to avoiding the herd's faulty investment decisions. Wall Street defines contrarian investing as betting the opposite of the crowd. Problem is, stocks often don't do the opposite of what most folks expect! Those who bet on the opposite, thinking it makes them a contrarian, behave as crowd-like as the crowd they try to game! If the herd thinks stocks will rise 10%, the anti-herders bet they'll fallbut markets could also skyrocket or zigzag sideways. In Beat the Crowd, bestselling author Ken Fisher shows you how to look beyond both crowds and find real contrarian opportunities that pay.
Being a contrarian simply means thinking independently. Not getting caught up in media hype and endless debate over whether Thing X is good or bad for stocks. Looking for things everyone misses. Thinking differently than the crowd, but not necessarily opposite! Beat the Crowd helps you filter the noise, test rules of thumb, shatter media myths and avoid common pitfalls.
If you're tired of media chatter and getting burned by consensus wisdom, this book is for you. With his signature style, Ken dispels common viewpoints and knocks age-old "rules" on their head. You'll learn how to separate what's important from what isn't, think outside the investing canon, find the "elephant in the room" and out-invest the herd.
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Top customer reviews
Important reasons why investors get the timing wrong are lack of discipline and ignorance in the sense of wrong concepts. Discipline refers especially to not selling unnecessarily. Shares go up and down. Most investors when a position in a portfolio goes down consider selling and replacing it by a winner. They consider a small loss far more important than a large gain. This is behavior based on the past of what has already happened. Fischer points out that what matters is what is expected to happen in the next 30 months.
Another important factor is the media that write about the stock market. People are more interested in bad news than good news, and therefore the majority of articles are written about short-term disappointments and negative developments further in the future than 30 months. His definite view is that both short-term opinions and extrapolations of the past and past 30 months predictions are useless for predicting changes from bull to bear and vice versa.
Fischer points to more than thirty widely held views he considers wrong. Some examples. A high Price Earnings ratio (PE) has no validity in predicting a better or worse development than a low PE. Small companies do not have a superior long-term performance than large ones. The increase from long-term interest rates does not lead to a change in a bull market. Wars do not influence the stock market other than of the magnitude such as World War II. Fisher presents straightforward statistical proofs. He puts these concepts to tests to determine if these widely held view correspond to what happened in reality. It is necessary to look at a complete picture; there are always examples where these factors appeared to be right, but they are far fewer than when proven wrong. For learning to spot in time approaching bears and bulls this book is first class, five stars.
Fisher frequently states that he is not a sociologist but nevertheless holds very negative opinions about politicians. Many people will have different views. His negative views of political leaders are so strong that they even get in the way of his statistical proofs. For example he states on page 132 that in 1938 the GDP started to increase when Franklin Roosevelt was president and on page 143 that a bear market reigned from 1934 to 1942. The reality is that already in 1934, FDR's second year in office, GDP increased with 10.8%. He states about the ACA on page 152 that the uninsured were reduced with between 7 to 10 million and on page 154 only with 1.1% which is only 3.5 million or half.
Fisher as a non-sociologist has very definite opinions on government. He sometimes creates the impression that the kind of policies that President Hoover pursued most of the time of non-interference in the economy is the only right policy and political action. I nevertheless also enjoyed this part as he does also make thought-provoking comments on political action.
The book itself is an easy read and only took me two days to finish. It's also written in a way that seems easy to understand even for someone who doesn't have a background in investing or know all the technical jargon. I also like that there are a lot of charts and other graphics to visualize the points being made. I always find it easier to see a concept displayed in a graph so that was a big help for me.
Would definitely recommend this book for anyone managing their own investments or just interested in how it works.
I find Fisher a little tiresome at times, in some of his other books and occasionally in this one. The contrarian schtick among other things. But even given that, this book is worth reading. It will free up your mind to think about the important things, or even just to rest a while. It's not that long or hard and it will sweep out all the incessant KRP. And save you time-- no, you don't need to watch that "financial" TV show.
I'm very glad I read it.
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Let me be clear: The content is fine and learning Ken Fisher's investing philosophy will undoubtedly make you a better, or at...Read more