Bubble Witch Saga 3 Industrial Deals Beauty Best Books of the Month STEM nav_sap_plcc_ascpsc Learn more about Amazon Music Unlimited PCB for Musical Instruments Starting at $39.99 Grocery Handmade Tote Bags Home Gift Guide Off to College Home Gift Guide Book a house cleaner for 2 or more hours on Amazon BradsStatus BradsStatus BradsStatus  Introducing Echo Show Introducing All-New Fire HD 10 with Alexa hands-free $149.99 Kindle Oasis, unlike any Kindle you've ever held Shop Now FFII_gno

Customer Review

on March 16, 2012
How does one write a review for a book when it has been praised by Jack Bogle, Jeremy Grantham, Joel Greenblatt, Seth Klarman, and Warren Buffett? I am a midget among giants. I can't write this, but I am going to try.

Being a teensy part of the investment fraternity that calls itself value investors, I do have some perspective on this book. The joke of sorts is that there are many things that are "the most important thing." But I think the point of the author is that what is most important shifts, depending on the market environment.

But all of "the most important things" can be boiled down to four main concepts:

Margin of Safety
Buy it Cheap; Valuation
Think beyond the initial effects to secondary effects. Think holistically.

By margin of safety, there are many things implied -- a strong balance sheet, strong cash flows, conservative accounting, and/or protected market position. The important thing is to prevent a large loss. If you can prevent large losses, the gains will come eventually.

Buying it cheap is also a simple concept, though hard to implement well. What metric to use? Price to Earnings, Cash Flow, Book, Free Cash Flow, EBITDA? Where to look in the capital structure for value? The equity may be too risky, but maybe the preferred stock or bonds might be interesting.

Contrarianism means looking for what others rely on that may not work, and investing against it, whether positively or negatively. It can't be mere opinion; the other side has to be invested, and relying on their hypothesis to succeed. That is the situation where investing contrary to the consensus can succeed.

Thinking holistically comes from being a bright student whether in the sciences or the liberal arts. It comes from being a life-long learner, and applying oneself to the problem until it yields at least a hint of an answer. Where it doesn't, cutting losses pays off.

I recommend this book to all who aspire after value investing.



Who would benefit from this book:

All value investors, and those who want to be value investors can benefit from this book. Those that want to understand how the economy really works will benefit as well.
0Comment| 28 people found this helpful. Was this review helpful to you?YesNoReport abuse| Permalink
What's this?

What are product links?

In the text of your review, you can link directly to any product offered on Amazon.com. To insert a product link, follow these steps:
1. Find the product you want to reference on Amazon.com
2. Copy the web address of the product
3. Click Insert product link
4. Paste the web address in the box
5. Click Select
6. Selecting the item displayed will insert text that looks like this: [[ASIN:014312854XHamlet (The Pelican Shakespeare)]]
7. When your review is displayed on Amazon.com, this text will be transformed into a hyperlink, like so:Hamlet (The Pelican Shakespeare)

You are limited to 10 product links in your review, and your link text may not be longer than 256 characters.

Please write at least one word
You must purchase at least one item from Amazon to post a comment
A problem occurred while submitting your comment. Please try again later.

There was a problem loading comments right now. Please try again later.