Stock Market is Not Hard
This is the basic premise of the book “Why Are We So Clueless About the Stock Market” by Mariusz Skonieczny. Mariusz runs the Classic Value Investors LLC, and it is not surprising that he espouses buying stocks when they are priced below the value that the business represents.
The author clearly targets an audience that is either puzzled by how the stock market works, let their investing sway with the market sentiments, or depend too much on their advisors to pick their investments for lack of time. Mariusz spends considerable time discussing how the incentives for the Wall Street analysts and their banks or the friendly neighborhood broker are not aligned to give you, the investor, the best investment returns. The financial media is more a catalyst for creating and perpetuating hypes or gloom, depending on the prevailing market sentiment.
The only one who has the best financial interest in making your investments succeed is YOU. But how do you do this when you lack for time or knowledge about the markets?
Great Investors Do Not Have Magical Powers
Ever wondered how some of the better investors, maybe someone your know personally, or maybe the well know investors such as Warren Buffett, always seem to avoid the stocks or sectors that subsequently implode, while holding stocks that everyone thought were losers but tend to work out really well? They are not lucky. Luck does not supply long periods of superior investment returns. What they do and most of us do not, is to understand the business they want to invest in and than decide if the price of the stock is attractive enough to warrant a purchase. Dispassion and ignoring the media and wall street noise is critical to making sound investment decisions.
Rest of the book, Mariusz explains how an investor can understand and analyze a business and decide whether the stock is worth buying and what is a right price to pay. The author also explains, in an easy to understand language, when one should consider selling a stock. The book ends with real world case studies that illustrate the value investing principles in the book with examples of how his firm evaluated and invested in companies during the recession of 2008.
Excellent Primer on Value Investing
This is an excellent primer on key principles of value investing, written in an easy to understand manner that almost anyone can pick up and understand in the first reading. Value investing books generally tend to be dry and it can be easy to get mired in the numbers and concepts that can be a little hard to master in the first go. Not so with this book. If you are planning to read Graham or Greenwald at some point, you might want to read this one first.
My recommendation: Buy it, it is a great value!
Disclaimer: I was given a complimentary electronic copy of this book some time ago by the author. This review has been long in coming, but here it is. If you click and buy the book from the link in this review, you will be generating a commission for Value Stock Guide. I will not post a positive review for any book that I do not approve of and have informally recommended this book to friends and family. You should also seek out other reviews of this book before you decide to buy, for example, at Amazon or other book sellers.