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Value Investing Book Reviews
By admin - Posted on October 18th, 2007
Vitaliy Katsenelson's "Active Value Investing" is one of the best investing books published in the last few years. The book is both readable and teachable. It focuses on general principles rather than specific strictures. Although "Active Value Investing" is written in an easily approachable manner, it is structured much like a good textbook ought to be. In this way, Katsenelson's 282-page book captures much of the spirit of Graham and Dodd's magnum opus without ever losing sight of our modern day market and the unique challenges it presents.
Publisher:John Wiley & Sons Ltd
ISBN:9780470053157
Review:
Vitaliy Katsenelson's "Active Value Investing" is one of the best investing books published in the last few years. The book is both readable and teachable. It focuses on general principles rather than specific strictures. Although "Active Value Investing" is written in an easily approachable manner, it is structured much like a good textbook ought to be. In this way, Katsenelson's 282-page book captures much of the spirit of Graham and Dodd's magnum opus without ever losing sight of our modern day market and the unique challenges it presents.
Katsenelson's thesis is that the U.S. stock market won't soon return to its old ways, the ever-rising crescendo of the 1982-2000 bull market on which many of today's investors were weaned:
For the next dozen years or so the U.S. broad stock markets will be a wild roller-coaster ride. The Dow Jones Industrial Average and the S&P 500 index will go up and down (and in the process will set all-time highs and multi-year lows), stagnate, and trade in a tight range. They'll do all that, and at the end of this wild ride, when the excitement subsides and the dust settles, index investors and buy-and-hold stock collectors will find themselves not far from where they started in the first decade of this new century.
With this opening salvo, the reader might well expect the book to devolve into a barrage of unabashed bearishness.
Thankfully, it does not.
Instead the book argues that the bull/bear dichotomy is a false one. True, there are long-term bull markets – but, there are really very few long-term bear markets in the sense in which most people understand the term. Rather, unfavorable long-term market trends tend to be of the "cowardly lion" variety, "whose bursts of occasional bravery lead to stock appreciation, but are ultimately overrun by fear that leads to a subsequent descent".
That's the crux of Katsenelson's book – and quite a crux it is. He has the data to support it – and anyone who has spent any time looking at long-term market trends knows that it doesn't take much to demolish the bull/bear dichotomy which seems to fascinate Wall Street (and infect its literary output). Terms which may make a good deal of sense in the short-term are used as if they applied to long-term trends, when almost all of market history shows they don't.
I'm sure it's more fun to be unabashedly bearish – especially when writing a book – than it is to be realistic. But, the facts are the facts – and the facts say that the word "bear" doesn't really belong in our long-term market vocabulary.
Katsenelson provides a great service when he demolishes the bull/bear dichotomy and shows his readers the truth – the boring, honest truth – that in the long-run, sometimes markets go up and sometimes markets go sideways; sometimes P/E ratios expand and sometimes P/E ratios contract. These trends can last a long time. It's easy for investors to become so accustomed to the market they knew that they can no longer see the market they are being asked to invest in with the honest eyes of an unconditioned mind.
Katsenelson demolishes myths, opens eyes, and then instills the basic tenets of value investing. While this process may sound abstract, the text itself is not. Katsenelson combines concrete data with abstract principles to illustrate important points like P/E expansion and contraction – and what that means for the buyers of high and low P/E stocks respectively:
…I wanted to see what would happen to the average P/E of each quintile if I bought each quintile in the beginning of the range-bound market (January 1966) and sold it at the end in December 1982…The highest-P/E quintile exhibited a P/E compression of 50.3 percent. The P/E of the average stock dropped from 29.3 in 1966 to 14.6 in 1982. That portfolio generated a total annual return of 8.6 percent. The lowest-P/E quintile to my surprise had a P/E expansion of 34.8 percent. Yes, you read it right. The P/E of the average stock in my lowest-P/E quintile actually went up from 11.8 to 15.8 throughout the range-bound market. That portfolio produced a nice bull market-like total annual return of 14.16 percent…
This book will teach you about our markets and their past. More importantly, it will teach you how to invest with an eye towards value at a time when a sound value orientation can do the most good.
This is an excellent book. I highly recommend it.
By Geoff Gannon
www.gannononinvesting.com
- Add new comment
Vitaliy Katsenelson's "Active Value Investing" is one of the best investing books published in the last few years. The book is both readable and teachable. It focuses on general principles rather than specific strictures. Although "Active Value Investing" is written in an easily approachable manner, it is structured much like a good textbook ought to be. In this way, Katsenelson's 282-page book captures much of the spirit of Graham and Dodd's magnum opus without ever losing sight of our modern day market and the unique challenges it presents.
Publisher:
John Wiley & Sons Ltd
ISBN:
9780470053157
Review:
Vitaliy Katsenelson's "Active Value Investing" is one of the best investing books published in the last few years. The book is both readable and teachable. It focuses on general principles rather than specific strictures. Although "Active Value Investing" is written in an easily approachable manner, it is structured much like a good textbook ought to be. In this way, Katsenelson's 282-page book captures much of the spirit of Graham and Dodd's magnum opus without ever losing sight of our modern day market and the unique challenges it presents.
Katsenelson's thesis is that the U.S. stock market won't soon return to its old ways, the ever-rising crescendo of the 1982-2000 bull market on which many of today's investors were weaned:
For the next dozen years or so the U.S. broad stock markets will be a wild roller-coaster ride. The Dow Jones Industrial Average and the S&P 500 index will go up and down (and in the process will set all-time highs and multi-year lows), stagnate, and trade in a tight range. They'll do all that, and at the end of this wild ride, when the excitement subsides and the dust settles, index investors and buy-and-hold stock collectors will find themselves not far from where they started in the first decade of this new century.
With this opening salvo, the reader might well expect the book to devolve into a barrage of unabashed bearishness.
Thankfully, it does not.
Instead the book argues that the bull/bear dichotomy is a false one. True, there are long-term bull markets – but, there are really very few long-term bear markets in the sense in which most people understand the term. Rather, unfavorable long-term market trends tend to be of the "cowardly lion" variety, "whose bursts of occasional bravery lead to stock appreciation, but are ultimately overrun by fear that leads to a subsequent descent".
That's the crux of Katsenelson's book – and quite a crux it is. He has the data to support it – and anyone who has spent any time looking at long-term market trends knows that it doesn't take much to demolish the bull/bear dichotomy which seems to fascinate Wall Street (and infect its literary output). Terms which may make a good deal of sense in the short-term are used as if they applied to long-term trends, when almost all of market history shows they don't.
I'm sure it's more fun to be unabashedly bearish – especially when writing a book – than it is to be realistic. But, the facts are the facts – and the facts say that the word "bear" doesn't really belong in our long-term market vocabulary.
Katsenelson provides a great service when he demolishes the bull/bear dichotomy and shows his readers the truth – the boring, honest truth – that in the long-run, sometimes markets go up and sometimes markets go sideways; sometimes P/E ratios expand and sometimes P/E ratios contract. These trends can last a long time. It's easy for investors to become so accustomed to the market they knew that they can no longer see the market they are being asked to invest in with the honest eyes of an unconditioned mind.
Katsenelson demolishes myths, opens eyes, and then instills the basic tenets of value investing. While this process may sound abstract, the text itself is not. Katsenelson combines concrete data with abstract principles to illustrate important points like P/E expansion and contraction – and what that means for the buyers of high and low P/E stocks respectively:
…I wanted to see what would happen to the average P/E of each quintile if I bought each quintile in the beginning of the range-bound market (January 1966) and sold it at the end in December 1982…The highest-P/E quintile exhibited a P/E compression of 50.3 percent. The P/E of the average stock dropped from 29.3 in 1966 to 14.6 in 1982. That portfolio generated a total annual return of 8.6 percent. The lowest-P/E quintile to my surprise had a P/E expansion of 34.8 percent. Yes, you read it right. The P/E of the average stock in my lowest-P/E quintile actually went up from 11.8 to 15.8 throughout the range-bound market. That portfolio produced a nice bull market-like total annual return of 14.16 percent…
This book will teach you about our markets and their past. More importantly, it will teach you how to invest with an eye towards value at a time when a sound value orientation can do the most good.
This is an excellent book. I highly recommend it.
By Geoff Gannon
www.gannononinvesting.com
- Add new comment
By admin - Posted on December 11th, 2007
I had the privilege of proofreading early drafts of this book, and I am happy to report that Charles Mizrahi has written a great book called Getting Started in Value Investing. It is a clear guide written by an author with many years of experience in writing newsletters and managing money intelligently.
This book serves as a clear guide from the basic beginning steps to the "things to watch out for" ending summary. I recount his rational guide path here: Chapter 1 begins with the misconceptions of Value
Publisher:John Wiley & Sons Ltd
ISBN:0470139080
Review:
I had the privilege of proofreading early drafts of this book, and I am happy to report that Charles Mizrahi has written a great book called Getting Started in Value Investing. It is a clear guide written by an author with many years of experience in writing newsletters and managing money intelligently.
This book serves as a clear guide from the basic beginning steps to the "things to watch out for" ending summary. I recount his rational guide path here: Chapter 1 begins with the misconceptions of Value
Investing. Chapter 2 follows with the basics of sensible value investing. Chapter 3 warns us about Mr. Market. Chapter 4 covers Great Companies, and explains why they may become great investments. Then, in Chapter 5, Mizrahi explains why good managements add more
value. Chapter 6 covers the issue of competition and the importance of enduring competitive advantages. Chapter 7 covers the Essential Valuation Variables that matter and Chapter 8 brings these numbers to
ife. Chapter 9 explains the critical issue of Price of a Stock versus the Value of the Company. Chapter 10 examines our own psychological biases. Then, in Chapter 11, Charles Mizrahi summarizes the essence of the Graham-Dodd-Buffett-Munger style of equity value
investing.
While everyone may take a little different approach to measuring both quantitative and qualitative value; in my view, each of these eleven chapters delivers something especially valuable to the reader. They help to get us closer to the real "intrinsic value" of a business.
When Charles first told me of his project to write an introductory book on Value Investing for the Wiley investment series that is based on the Warren Buffett value approach to stock investing, I challenged him to swing for the fences and cleverly twist it into a book that could yield enduring value like Ben Graham's classic, The Intelligent Investor. I think that this book delivers because it gives us useful and valuable information in each chapter. The Mizrahi kids should be
proud of what their dad has crafted. This book should be in every library.
Since "Getting Started in Value Investing" delivers sound investing principles, and it is written in a clear paternal style, it has a good chance of becoming a bestseller. Charles Mizrahi clearly explains the core of the Graham-Dodd-Buffett-Munger style of equity value investing.
Review by Bud Labitan
I had the privilege of proofreading early drafts of this book, and I am happy to report that Charles Mizrahi has written a great book called Getting Started in Value Investing. It is a clear guide written by an author with many years of experience in writing newsletters and managing money intelligently.
This book serves as a clear guide from the basic beginning steps to the "things to watch out for" ending summary. I recount his rational guide path here: Chapter 1 begins with the misconceptions of Value
Publisher:
John Wiley & Sons Ltd
ISBN:
0470139080
Review:
I had the privilege of proofreading early drafts of this book, and I am happy to report that Charles Mizrahi has written a great book called Getting Started in Value Investing. It is a clear guide written by an author with many years of experience in writing newsletters and managing money intelligently.
This book serves as a clear guide from the basic beginning steps to the "things to watch out for" ending summary. I recount his rational guide path here: Chapter 1 begins with the misconceptions of Value
Investing. Chapter 2 follows with the basics of sensible value investing. Chapter 3 warns us about Mr. Market. Chapter 4 covers Great Companies, and explains why they may become great investments. Then, in Chapter 5, Mizrahi explains why good managements add more
value. Chapter 6 covers the issue of competition and the importance of enduring competitive advantages. Chapter 7 covers the Essential Valuation Variables that matter and Chapter 8 brings these numbers to
ife. Chapter 9 explains the critical issue of Price of a Stock versus the Value of the Company. Chapter 10 examines our own psychological biases. Then, in Chapter 11, Charles Mizrahi summarizes the essence of the Graham-Dodd-Buffett-Munger style of equity value
investing.
While everyone may take a little different approach to measuring both quantitative and qualitative value; in my view, each of these eleven chapters delivers something especially valuable to the reader. They help to get us closer to the real "intrinsic value" of a business.
When Charles first told me of his project to write an introductory book on Value Investing for the Wiley investment series that is based on the Warren Buffett value approach to stock investing, I challenged him to swing for the fences and cleverly twist it into a book that could yield enduring value like Ben Graham's classic, The Intelligent Investor. I think that this book delivers because it gives us useful and valuable information in each chapter. The Mizrahi kids should be
proud of what their dad has crafted. This book should be in every library.
Since "Getting Started in Value Investing" delivers sound investing principles, and it is written in a clear paternal style, it has a good chance of becoming a bestseller. Charles Mizrahi clearly explains the core of the Graham-Dodd-Buffett-Munger style of equity value investing.
Review by Bud Labitan
By billytickets - Posted on December 19th, 2007
Like many on this board, I've read many books on investing. Bill's book intrigued me, and given the number of discussions concerning it, I figured I'd give it a try. To make a long story short, it's well worth the $20.
Review:
Like many on this board, I've read many books on investing. Bill's book intrigued me, and given the number of discussions concerning it, I figured I'd give it a try. To make a long story short, it's well worth the $20.
At the outset, I think that it's important to note that the book is all about maximizing long-term returns. In the early chapters, Bill does a great job setting forth various ways to reduce costs for every day, big-ticket expenses. He's got a contrarian streak in him, which I found intriguing, but which some readers may find hard to swollow. For example, Bill questions the assumption that all education is good in the long run, and he is a big advocate of leverage, done properly.
Later chapters discuss Bill's system. As all readers of this board should know, Bill sticks to large cap stocks. While this may foreclose some opportunities, it has a couple of benefits - most large caps won't go bankrupt, and the reason that most companies become large-caps is that they have done something successful in the past (they have wide moats). Without giving away too much, Bill's system is to wait for Mr. Market to go into a funk and then pile in.
This book is not suitable for someone who wants to get rich quick - it's designed to increase long-term returns of buy and hold investors, thereby minimizing frictional costs associated with frequent transactions. Bill's philosophy appers drawn from Graham and Buffett, with elements of Kelly thrown in (he only makes a few big bets). His focus on trailing performance takes the human judgment factor out (e.g., his system seems like it could be effective at addressing the foibles of behavioral finance). Stylistically, Bill's approach might be closest to Greenblatt in "The Little Book that Beats the Market," although he looks at a much smaller universe of stocks.
I suspect that Bill will be doing quite well as long as he choses to invest, and that others could do as well using his methods. This doesn't mean that others can't do well using other systems, but I do believe that many investors will lack the stomach and the patience (5 year time horizon) to stick to Bill's system
Like many on this board, I've read many books on investing. Bill's book intrigued me, and given the number of discussions concerning it, I figured I'd give it a try. To make a long story short, it's well worth the $20.
Review:
Like many on this board, I've read many books on investing. Bill's book intrigued me, and given the number of discussions concerning it, I figured I'd give it a try. To make a long story short, it's well worth the $20.
At the outset, I think that it's important to note that the book is all about maximizing long-term returns. In the early chapters, Bill does a great job setting forth various ways to reduce costs for every day, big-ticket expenses. He's got a contrarian streak in him, which I found intriguing, but which some readers may find hard to swollow. For example, Bill questions the assumption that all education is good in the long run, and he is a big advocate of leverage, done properly.
Later chapters discuss Bill's system. As all readers of this board should know, Bill sticks to large cap stocks. While this may foreclose some opportunities, it has a couple of benefits - most large caps won't go bankrupt, and the reason that most companies become large-caps is that they have done something successful in the past (they have wide moats). Without giving away too much, Bill's system is to wait for Mr. Market to go into a funk and then pile in.
This book is not suitable for someone who wants to get rich quick - it's designed to increase long-term returns of buy and hold investors, thereby minimizing frictional costs associated with frequent transactions. Bill's philosophy appers drawn from Graham and Buffett, with elements of Kelly thrown in (he only makes a few big bets). His focus on trailing performance takes the human judgment factor out (e.g., his system seems like it could be effective at addressing the foibles of behavioral finance). Stylistically, Bill's approach might be closest to Greenblatt in "The Little Book that Beats the Market," although he looks at a much smaller universe of stocks.
I suspect that Bill will be doing quite well as long as he choses to invest, and that others could do as well using his methods. This doesn't mean that others can't do well using other systems, but I do believe that many investors will lack the stomach and the patience (5 year time horizon) to stick to Bill's system
By billytickets - Posted on February 6th, 2008
By Dana - Posted on June 24th, 2008
My name is Dana O’Keefe, as an account development specialist for Boston Trading and Research (http://sales.btrfx.com/712). My job is to build financially beneficial business relationships with an array of high net worth individuals. We provide a managed (FOREX) product (A ranked professional trader). I would like to talk about a business relationship with you and myself.
Should you decide to partner with us as your Forex partner, you will find that we are unlike the typical currency trading operation.
Boston Trading and Research:
Review:
My name is Dana O’Keefe, as an account development specialist for Boston Trading and Research (http://sales.btrfx.com/712). My job is to build financially beneficial business relationships with an array of high net worth individuals. We provide a managed (FOREX) product (A ranked professional trader). I would like to talk about a business relationship with you and myself.
Should you decide to partner with us as your Forex partner, you will find that we are unlike the typical currency trading operation.
Boston Trading and Research:
Is a New England based company with a stellar reputation. We at BTR work with CEO’s, CFO’s, Partners, successful business owner, and high net worth individuals worldwide. We have a RANKED trader: 1st for sharp ratio and 2nd for overall ROI for the last year. Averaging between 2-3% monthly return. Below is the outline of our managed Forex account program.
FX MANAGED ACCOUNTS:
Our most popular product is called the FX-Platinum managed account program; Client’s funds allocated to this service will be managed by our head trader, Devrim Akyil, a highly experienced FOREX trader from Boston. He has been trading currency futures and options for over 16 years and has worked as a chief trader and head of different trading desks of various notable banks throughout Europe. With his remarkable professional experience as a trader and financial consultant, our trader has developed a highly successful and remarkably consistent FOREX trading strategy.
His conservative day trading strategy combined with a low-risk approach to money management can provide a very attractive return on investment and long-term capital growth prospects.
FX-Platinum (Funds traded over 50million)
- 20 profitable months
- 30% Maximum drawdown
- Target consistent 3%-4% per month
- Account Minimum: $100,000 USD.
- Investors have 24/7 real time online access to their accounts.
- Investors receive “real time” email alerts for every trade executed.
- Investors can make deposits at any point and time of the month. Withdrawals can be made once a month for any amount as long as the account balance does not fall under $100,000.
Barclays report link: www.barclayhedge.com/managerscorner/perf_ranks/cta/Currency
First and foremost I would like some feedback on what you think of my brief proposal. Good points? or Bad points? Once you do your due diligence and feel you could benefit from working with us I'd like to invite you to schedule a preliminary phone meeting.
Additionally, I take great pride in my work and building exceptional business relationships. For your initial inquiry, email me at Dana.Okeefe@BTRFX.com or please call me direct: 617-314-9462
Finally, we do speak various languages within our office to increase your level of comfort and minimize communication issues. Please feel free to call or email to discuss strategy, questions, or comments. If you feel more comfortable chatting through msn skype, my screen name is "forex-king". I look forward to hearing from you.
Best regards,
Dana O'Keefe
Account Development Specialist
Boston Trading and Research
website: http://sales.btrfx.com/712
To open accounts email or call 24 hours a day at:
Dana.Okeefe@btrfx.com
Office Phone: 617-314-9462
Cell Phone:774-521-6394
Fax: 617-292-2826
Skype ID: Forex-king
My name is Dana O’Keefe, as an account development specialist for Boston Trading and Research (http://sales.btrfx.com/712). My job is to build financially beneficial business relationships with an array of high net worth individuals. We provide a managed (FOREX) product (A ranked professional trader). I would like to talk about a business relationship with you and myself.
Should you decide to partner with us as your Forex partner, you will find that we are unlike the typical currency trading operation.
Boston Trading and Research:
Review:
My name is Dana O’Keefe, as an account development specialist for Boston Trading and Research (http://sales.btrfx.com/712). My job is to build financially beneficial business relationships with an array of high net worth individuals. We provide a managed (FOREX) product (A ranked professional trader). I would like to talk about a business relationship with you and myself.
Should you decide to partner with us as your Forex partner, you will find that we are unlike the typical currency trading operation.
Boston Trading and Research:
Is a New England based company with a stellar reputation. We at BTR work with CEO’s, CFO’s, Partners, successful business owner, and high net worth individuals worldwide. We have a RANKED trader: 1st for sharp ratio and 2nd for overall ROI for the last year. Averaging between 2-3% monthly return. Below is the outline of our managed Forex account program.
FX MANAGED ACCOUNTS:
Our most popular product is called the FX-Platinum managed account program; Client’s funds allocated to this service will be managed by our head trader, Devrim Akyil, a highly experienced FOREX trader from Boston. He has been trading currency futures and options for over 16 years and has worked as a chief trader and head of different trading desks of various notable banks throughout Europe. With his remarkable professional experience as a trader and financial consultant, our trader has developed a highly successful and remarkably consistent FOREX trading strategy.
His conservative day trading strategy combined with a low-risk approach to money management can provide a very attractive return on investment and long-term capital growth prospects.
FX-Platinum (Funds traded over 50million)
- 20 profitable months
- 30% Maximum drawdown
- Target consistent 3%-4% per month
- Account Minimum: $100,000 USD.
- Investors have 24/7 real time online access to their accounts.
- Investors receive “real time” email alerts for every trade executed.
- Investors can make deposits at any point and time of the month. Withdrawals can be made once a month for any amount as long as the account balance does not fall under $100,000.
Barclays report link: www.barclayhedge.com/managerscorner/perf_ranks/cta/Currency
First and foremost I would like some feedback on what you think of my brief proposal. Good points? or Bad points? Once you do your due diligence and feel you could benefit from working with us I'd like to invite you to schedule a preliminary phone meeting.
Additionally, I take great pride in my work and building exceptional business relationships. For your initial inquiry, email me at Dana.Okeefe@BTRFX.com or please call me direct: 617-314-9462
Finally, we do speak various languages within our office to increase your level of comfort and minimize communication issues. Please feel free to call or email to discuss strategy, questions, or comments. If you feel more comfortable chatting through msn skype, my screen name is "forex-king". I look forward to hearing from you.
Best regards,
Dana O'Keefe
Account Development Specialist
Boston Trading and Research
website: http://sales.btrfx.com/712
To open accounts email or call 24 hours a day at:
Dana.Okeefe@btrfx.com
Office Phone: 617-314-9462
Cell Phone:774-521-6394
Fax: 617-292-2826
Skype ID: Forex-king
