This book on value investing is different from most others. It is part philosophy and part practical guide- it presents an integrated approach to analyzing stocks and building strong portfolios. No matter what your level of investing experience andMoreThis book on value investing is different from most others. It is part philosophy and part practical guide- it presents an integrated approach to analyzing stocks and building strong portfolios. No matter what your level of investing experience and skill, the ideas and methods in this book will help you invest wisely and improve your investment performance.
Clearly, analytical ability and technique are necessary for investing wisely. But what is even more important is the ability to regulate emotions, think independently, and see clearly. Yet, controlling emotions and seeing clearly is not easy, as the financial markets are incredibly noisy and ripe with half-baked opinions, innuendo, and cons- they overwhelm the senses, confuse and disorient, and invite all varieties of deceptions and self-deceptions.
No lesson on investing is complete, therefore, without showing how our perceptions are liable to be distorted and how to correct those distortions. In fact, analytical techniques are no good if they are not integrated within a well-conceived decision framework that also attends to the facts about how we are wired to perceive the world around us.
In this book, I present such a decision framework for investing. In the first part of the book, I take you on an intellectual journey through the ages for a peek into our inner lives- I show that what makes us tick as people also makes us vulnerable as investors. I then leverage this knowledge in the second part of the book to build the decision framework for evaluating investment opportunities in general and stocks in particular. Once the decision framework is firmly in place in the first ten chapters, the rest of the book presents the analytical tools necessary for evaluating stocks and building high-performance portfolios.
In essence, this book shows how to cut through the noise in and around you, stabilize and control emotions, frame investment decisions, and correctly apply key analytical techniques in order to build strong stock portfolios. To show the effectiveness of this way of thinking, I end the book with a chapter on the stock portfolio of Warren Buffett (Berkshire Hathaway). Invest wisely.