Investment-philosophy

Prof. Robert F. Bruner's ideas on teaching are excellent, and more importantly, they work! (My own course ratings improved dramatically when I followed his advice under pacing and preparation.)
He has written a book for teachers who care about student learning . It's great for ideas on self-improvement. I've given it as a gift to faculty who are interested in making the switch to case teaching. It also has a really good section on how to watch other faculty teach.

This is a Fraser reprint of "The Theory of Stock Speculation" by Arthur Crump, apparently an Englishman, written in 1874-5, published around 1900-1901.

Style is difficult at times, with long paragraphs, words and phrasing of that period. But this is very worthwhile reading - trading psychology; intermarket analysis; economics; history.

E.g., first ticker of sorts, via telegraph, was started on 11/13/1851, between the London stock exchange and Paris. I did not know previous to reading this book, that France had to pay war reparations to Germany for the Franco-German/Prussian war just before this time, perhaps the originating source of motivation for the heavy WWI reparations demanded by France and others, of Germany after WWI, leading to WWII. This info is just one of many, many interesting items in the book.

But, this is not a history book, its a treatise on the pitfalls and dangers of speculation.

It is amazing to me that so much was known way back then, about trading psychology, trading tricks and scams, markets, public versus professional results, panics, etc.

This short book compactly contains most of what any current books on trading psychology contain.

Virtually every one of its 114 pages seems to have multiple pieces of trading wisdom worth quoting.

Does it apply to current speculation, trading and markets? Definitely!

This book is an excellent very basic introduction to Finance Theory as currently taught in business schools. It is also a well organised overview of a few different trading styles eg value vs technicals.
My reservation is that he leaves the reader with the impression that MPT is the only way of looking at markets and examines all trading styles within that framework. Thus he has only one philosophy and a list of techniques. In fact many of the investment greats have deep philosophical and methodological differences which are not acknowledged.
For example without any qualification, risk is defined as volatility. Despite having Buffett on the front cover there is no reference to the fact that Buffett completely disagrees with that definition and has contempt for the theories that are taught at Business Schools.

"Just a spoonful of color would have made the investment philosophies go down, in the most delightful way." To paraphrase nanny Mary Poppins' advice to add honey to nasty-tasting medicine, you may wish that this informative tome was more colorfully written, but you could not wish for a more solid dose of information. Aswath Damodaran backs up his explanations of investing philosophies with ample studies, detailed graphics and a website, even if you need to absorb the dense, detailed data in 15 minute chunks. This well-researched, solid book will be useful to individual investors, investment managers and anyone who wonders why various investment philosophies succeed and how (and at what risk) portfolio gains are made. The index investing chapter and the final summary are required reading for investors wondering how huge portfolios crashed after U.S. equities collapsed. We recommend this soup-to-nuts introduction to sophisticated investing. Your financial security could hinge on a good grasp of the issues it covers.

The best thing about the book is it does not offer shallow remedies like "get rich in 30 days" ot " how to become a millionaire", but offers a more academic assement of the philosophies followed by disciplined investors. He fits it nicely in to theoretical framework. I think Damodaran wants to show the relevance of the theoretical knowledge in the strategies folled by these investors.

If you buy "Common Stocks and Uncommon Profits and Other Writings" published by Wiley Investment Classics, you will find that the 'Other Writings' are the full text of this book, "Developing an Investment Philosophy" and the full text of his other popular book "Conservative Investors Sleep Well".

This book contains good information, but the best bargain is to buy just the one book.

Let me first give the obligatory warning that you can get the entire text of this 47-page "book" as part of "Common Stocks and Uncommon Profits and Other Writings" (itself 271 pages in length). To be fair to the work itself, I don't think you can get a more concise and clear description of growth investing than this monograph, which was published in 1980, when it is remarkable to recall that there had been an "unfortunate trend of recent years away from common stock investing".

There have been two prominent pioneers in the growth-investing field from its beginnings in the 1950s, T. Rowe Price and Philip A. Fisher. However, to my knowledge, Price did not write publicly about his methods. Fisher has, in an excellent manner.

Fisher interestingly commends the alternative school of investment, value investing, personified by Benjamin O. Graham. I think Fisher makes a good case that an excellent growth investor can achieve better results under the right conditions than an excellent value investor (Fisher quotes Shakespeare: "There is a tide in the affairs of men which, taken at the flood, leads on to fortune"). By definition, Fisher suggests that there can be few truly great growth investors in the universe at any one time, because [p. 30] "companies with truly unusual prospects for appreciation are quite hard to find for there are not too many of them." Fisher's work also gives the impression that growth investors need to operate at a particularly high-Watt level of intensity that perhaps few can match. In fact, it seems that growth investors often need to know more about an industry's and company's prospects than the CEOs themselves.

For those that are thinking of picking up Fisher's methodology and storming into the world of growth stocks, let me offer a few words of caution. First, Fisher valued highly the honesty of the managements that he quizzed about their firms' prospects: [p.17] "...the kind of honesty that caused [the company manager] not to conceal repeated bad news that could not fail to be embarrassing for him to tell. He saw to it that those interested in his company understood all the unfavorable aspects of what was happening, and not just the favorable potentials." In our age where most corporate managements are "control freaks" about their company images, true honesty seems hard to find. Secondly, during the first half of Fisher's career, particularly in the 1950s, there existed a whole class of institutional investors who as a matter of policy did not invest in growth stocks. As they said of Motorola in those days, [p.18] "...this was not the type of company on which they spent time; therefore they had no opinion of it." This is not true in our day. Millions of investors, large and small, are looking for great growth companies. To the extent that you find one, it may be too richly priced for your portfolio's health.

its hard to find so much experience (over 50 years) of a great mind in less than 50 pages.

I was really dissapointed with this book. After reading 118 pages out of 300+, and browsing over the rest, I decided not to waste my time with this book anymore. Most of the time, the author doesn't talk about the markets, trading systems, or mental strategies to win in Wall Street. He talks about word definitions, stories when he was a kid (not related to the markets), abstract philosophy, what separate us from the animals (how is this related to the title of the book?), repeats a lot of his stories 2 or 3 times... in summary... a book that has been mis-titled. Don't buy this book without doing research on it first. I spent $50 on it and I am debating if donating it to the library or trashing it.

Of all the books available on the markets, this is the one I'd recommend to a beginner as a starting point. I'm not surprised that an amateur would be disappointed (or even dissapoined) in it since it doesn't provide quick-start recipes for guaranteed success in the financial arena. What it does do is explain what the markets are all about. It dispels the myths that lead to inevitable losses and eventual ruin, preparing one for the reality of the market rather than perpetuating the illusions that enable all those advisory services, newsletters, and gurus to flourish.

You won't learn the "best" MACD settings here. What you will learn is the reality of the markets, a necessary first step toward creating a trading style.

Oddly enough, Amazon has paired the book with The Nature of Risk, above, at least temporarily, which is the second book I'd recommend to anyone interested in learning how to approach the financial markets.