The first section of this book examines some of the places where investors stumble.
- Chapter 1: differences between investing and speculation
- Chapter 2: how Wall Street maximizes its own best interests, which aren't necessarily aligned with investors.
- Chapter 3: the behavior and influence of institutional investors
- Chapter 4: a case study of junk bonds to illustrate many of the pitfalls highlighted in the first three chapters
- Chapter 5: risk aversion and its investment implications
- Chapter 6: the philosophy of value investing and the meaning and importance of a margin of safety
- Chapter 7: three underpinnings to value investing: a bottom-up approach to investment selection, an absolute-performance orientation, and analytical emphasis on risk as well as return
- Chapter 8: the principal methods of securities valuation used by value investors
- Chapter 9: the research and analytical process - how ideas are found and evaluated
- Chapter 10: sample value investment opportunities
- Chapter 11: thrift conversions
- Chapter 12: financially distressed securities
- Chapter 13: portfolio management and trading
- Chapter 14: investment manager selection
Review -
- This is the best introduction I've read to investing. The author is clear, concise, and covers all of the important points. If this were an in-print <$10 paperback, I would pass copies out to friends/acquaintences who don't have an investing background.
- This is not a how-to, like Graham's Security Analysis. The second section is just an overview of valuation methods. As such, this books apparent value as a collectable is confusing to me.
- The recommended "hunting grounds" in the book's third section is relatively short and weak compared compared with Greenblatt's You Can Be a Stock Market Genius.
- I would particularly recommend this for pre-college students interested in finance. Klarman's criticisms of academic and Wall Street finance would have been valuable to think about while learning the former and considering employment in the latter.
