Global-Investor Book of Investing Rules, The: Invaluable Advice from 150 Master Investors

Description

In The Global-Investor Book of Investing Rules, 150 top investors reveal the key strategies and insights they rely upon today to maximize profit and control risk. Each distills their approach into concise techniques and rules any investor can understand-and act upon. From Martin Barnes to Burton Malkiel, John C. Bogle to Andrew Tobias, they cover virtually every aspect of investment: global markets, valuation, asset allocation, M&A, stock picking, regional and sector investment, options, currencies, bear markets, deflationary investing, and much more.

Sample Content

Online Sample Chapter

Ten Tips for Common Sense Investing

Table of Contents

Acknowledgments and Introduction.


Robert Z. Aliber, “International Markets and Capital Flows”.


David Andrea, “The Auto Sector”.


Nick Antill, “Company Valuation”.


Martin Barnes, “General Principles and the Role of Liquidity”.


Richard J. Bauer Jr., “Building Trading Systems…”.


Gary Belsky, “Behavioral Finance”.


Bruce Berman, “Understanding the Value of Patents”.


William Bernstein, “Intelligent Asset Allocation”.


James B. Bittman, “Trading Options”.


John C. Bogle, “Common Sense Investing”.


Lewis J. Borsellino, “The 'Ten Commandments' of Trading”.


David Braun, <1169>How to Make Gains from M&A Activity”.


Ian Burns, “The Chemicals Sector”.


John P. Calamos, “Convertible Bonds”.


Thom Calandra, “General Principles…”.


Donald Cassidy, “Which Stocks to Sell, and When”.


Simon Cawkwell, “Advice from a Short Seller”.


Edward Chancellor, “Lessons from History”.


Moorad Choudhry, “Investing in Bonds”.


Robert Cole, “The Tempus Ten Golden Rules”.


Antoine Colonna, “The Luxury Goods Sector”.


Tim Congdon, “Economic Drivers of Asset Prices”.


Laurence Copeland, “Currencies”.


Richard Cragg, “Demographic Investment”.


Anthony Crescenzi, “The Bond Market's 'Crystal Ball'”.


Anthony Cross, “The Investment Attractions of Intellectual Capital”.


Lawrence Cunningham, “The Investing Methods of Warren Buffett”.


Frank Curzio, “Safeguards and Buying Opportunities”.


Ray Dalio, “Systemizing Fundamentals”.


Alexander Davidson, “How to Avoid Being a Victim of Stock Manipulation”.


Nigel Davies, “The Transport Sector”.


Steven I. Davis, “The Banking Sector”.


Philippe Delhaise, “Valuation of Asian Bank Shares”.


Thomas DeMark, “Trading with Technical Analysis”.


David DeRosa, “General Principles and the Dangers Of Financial Engineering”.


Joe DiNapoli, “Trading and the Importance of a Plan”.


Bob Dischel, “The Weather Risk Market”.


Richard H. Driehaus, “Investment Paradigms Worth Avoiding”.


Dru Edmonstone, “Investing in AIM Companies”.


Marc Faber, “Contrarian Advice from Dr Doom”.


Frank J. Fabozzi, “Bond Investing”.


Alan Farley, “Swing Trading”.


Niall Ferguson, “Lessons from the Rothschilds”.


Kenneth L. Fisher, “Engaging the Great Humiliato”.


George Fontanills, “Attaining a Winning Trader's Edge”.


Martin Fridson, “A Streetwise Approach to Stock Selection”.


David R. Fried, “Profiting from Buybacks”.


Foster Friess, “Investing in Growth Companies”.


Tony Golding, “Interpreting Broker Research and Recommendations”.


Julio Gomez, “Selecting an Online Broker”.


Philip Gotthelf, “Precious Metals Trading”.


Jeremy Grantham, “Investment Management”.


Robert V. Green, “Handling the Emotional Side of Investing”.


Herb Greenberg, “Avoiding Problem Stocks: Lessons from Lernout & Hauspie”.


Bill Gross, “Cost Reduction and Other Essential Lessons”.


Steve Harmon, “Commonsense Lessons on Technology Stocks”.


John Hathaway, “Investing in Gold”.


Alan Hicks, “Financial Spread Betting”.


Yale Hirsch, “A Stock Trader's Almanac”.


John C. Hull, “Option Valuation and Trading”.


John Husselbee, “Selecting a Mutual Fund Manager”.


Roger Ibbotson, “How to Manage Your Asset Allocation”.


Mark Ingebretsen, “Using the Web to Perform Due Diligence on a Stock”.


Edmond Jackson, “General Principles and Intrinsic Value of Companies”.


Simon M. Johnson, “The Leisure Sector”.


Philippe Jorion, “Value at Risk”.


Ajay Kapur, “Investing in Asian equities”.


John Kay, “Business Economics”.


Karl Keegan, “The Biotechnology Sector”.


Brian Kettell, “Fed Watching”.


Max King, “General Principles and Politicians' Promises”.


George Kleinman, “Commodities”.


Richard Koch, “Finding your Own Approach to Stockpicking”.


Joe Krutsinger, “Trading Systems”.


Mike Kwatinetz, “Investing in Technology Companies”.


Dean LeBaron, “Habits”.


Steve Leuthold, “Managing Your Mother Lode…”.


David Linton, “Trading and the Importance of Stop Losses”.


Burton Malkiel, “Essential Truths of Risk and Reward”.


Joe Mansueto, “Value Investing and Funds”.


Conor McCarthy, “Technology Stocks — Attractions and Dangers”.


Duff McDonald, “Business Technology”.


Colin McLean, “Value Investing and the Unreliability of Share Prices”.


Lawrence McMillan, “Axioms for Option Traders and Short-Term Traders”.


Rajnish Mehra, “The Equity Premium”.


Viren Mehta, “The Innovative Therapeutics Sector”.


Paul Melton, “Navigating the World's Markets”.


Michael Molinski, “Global Investing and the Small Investor Advantage”.


Robert A.G. Monks, “General Principles and Senators from Tennessee”.


David Morgan, “Investing in Silver”.


John M. Mulvey, “Portfolio Optimization”.


John Murphy, “Murphy's Laws of Technical Trading”.


Alan M. Newman, “How to Win the Stock Game”.


David Newton, “Investing in Small-Cap Stocks”.


Victor Niederhoffer and Laurel Kenner, “Rules for a Life-Time”.


Michael Niemira, “The Economic Backdrop of Investing”.


James W. Oberweis, “Investing in Very Fast Growing Companies”.


Terrance Odean, “Lessons for Investors from Behavioral Finance”.


Michael O'Higgins, “Beating the Dow”.


Richard Olsen, “The Trading Edge and Quantitative Tools”.


Paul Ormerod, “Rules for Sceptical Investors”.


Lois Peltz, “Selecting a Hedge Fund Manager”.


Robert Peston, “Interpreting the News Flow”.


Thomas A. Petrie, “The Energy Sector”.


John Piper, “Trading and the Second Marshmallow”.


Mitchell Posner, “Selecting Emerging Market Stocks”.


Henriëtte M. Prast, “The Emotional Investor”.


Robert Prechter, “Requirements for Successful Trading”.


George Putnam III, “Turnaround Stocks”.


Alfred Rappaport and Michael Mauboussin, “Expectations Investing”.


Jay Ritter, “IPOs”.


John Rothchild, “Surviving a Severe Bear Market”.


Anthony Saliba, “Trading Listed Options”.


Thomas Schneeweis, “Hedge Funds and Managed Futures Investing”.


Steven Schoenfeld, “Effective International Equity Investing”.


Lueder Schumacher, “The Utilities Sector”.


Charles Schwab, “Schwab Principles for Long-Term Investing”.


Gary Shilling, “Investment Strategies for a Deflationary Era”.


Jeremy Siegel, “Stocks for the Long Run, and Diversification”.


Howard L. Simons, “Market Interrelationships”.


Brian Skiba, “The Enterprise Software Sector”.


Jim Slater, “Building a Margin of Safety”.


Andrew Smithers, “Protecting Wealth and Valuing the Stock Market”.


Joel Stern, “EVA as an Enhancer of Shareholder Value”.


Thomas Stridsman, “Building and Trading a Rule-Based Strategy”.


Alan Sugden, “Key Questions for Stock Pickers”.


Catherine Tan, “Investing Lessons from the Asian Markets”.


Paul Temperton, “Investing in Euroland”.


Richard H. Thaler and Russell Fuller, “Common Mistakes Investors Make”.


Van K. Tharp, “Trading and Position Sizing™”.


David W. Tice, “Overvalued Stocks and Ponzi Schemes<170.


Andrew Tobias, “Personal Finance Tips”.


Brian Tora, “General Principles…”.


Romesh Vaitilingam, “How the Economy Influences Markets”.


Timothy P. Vick, “Finding Value in the Market”.


Pieter Vorster, “The Tobacco Sector”.


Ralph Wanger, “Reasons to Invest beyond the USA”.


Edmond Warner, “Investing in a Bear Market”.


Ben Warwick, “Searching for 'Alpha'”.


Henry Weingarten, “Ten Guidelines for a Stellar Performance”.


Neal Weintraub, “Trading”.


Martin J. Whitman, “A Fresh Look at the Efficient Market Hypothesis”.


Larry Williams, “Short-Term Trading and Survival”.


Paul Wilmott, “Money Management”.


Tom Winnifrith, “Long-Term Investing”.


Ed Yardeni, “Global Economic Trends”.


Andy Yates, “Getting the Most Out of Bulletin Boards”.


Leonard Yates, “Options Myths and Mistakes”.


William T. Ziemba, “Lessons from the Theory of Gambling”.

Preface

Preface

Investors who want to improve their understanding of financial markets do not have to look far for advice. The financial jungle is richly stocked with books on market lore and tactics, each confidently promising a fast track to profits.

The problem for investors is not one of scarcity but of selection. Like Buridan's Ass, which starved to death because it was unable to choose between two plump bales of hay, it is easy to be overwhelmed by choice.

• How do you choose between hundreds of different books on stock picking?
• If you only need a grounding in technical analysis, do you have to read a 700-page tome on the subject?
• Does it matter if an investing book is more than three years old?

And so on.

This book is an antidote to oversupply. It compacts 150 investing themes into one book, and the latest knowledge on those themes into 10 'rules'. In one go, you can learn what the leading experts in each field consider to be the key determinants of success.

As far as we know, this format is unique. Certainly no other book has put together a roster of such high calibre contributors. If our instincts are right, it will appeal strongly to investors. Nevertheless, we should point out that:

1. The book does not aim to be the ultimate word on the subjects it addresses. For that you'll need to read the contributors' own books, or visit their web sites—details of which are included in the text.
2. It is a reference book to be dipped into, not a narrative to be read from cover to cover. You don't have to start at 'A'.
3. It does not try to be all things to all people. If you find 30% of the rules useful, you should be pleased. It probably means you've sharpened your technique. If you find 100% of them useful, you should worry. It probably means your technique is muddled.
4. It aims to illustrate the diversity and conflicting nature of investing, not to proselytize a faith. Many of the rules conflict with each other. That's the point.
5. It will not make you a millionaire overnight! It will however provide you with the foundations for accumulating wealth and protecting it.
6. It is a work in progress, not a finished product. New rules are added regularly on the book's web site at www.global-investor.com/rules.

The main aim of the book is to enable you to identify the rules which suit you, and which will improve your investment performance. For each reader, these will be different. You should also gain an understanding of the 'big questions' of investing:

• Do stocks go up in the long term?
• Should you diversify your stock portfolio?
• How should you measure risk?
• Is investing long-term really better than trading short-term?
• Should you invest internationally?

Many of the rules in this book touch on these questions, and the answers are not always obvious. If you think you already know them, read what our contributors have to say—you may be surprised!

A couple of practical points:

• The book is organised alphabetically by contributor name, but there is also a detailed subject index at the back that may provide quicker access to specific information for some readers.
• On www.global-investor.com/rules there is a special section reserved for owners of this book. As well as providing a full search facility on the content and a channel for feedback, it offers a free #5 electronic voucher which can be used in the Global-Investor Bookshop and gives you the chance to win #100 of investing books. Page 498 explains what to do.

We hope you enjoy reading The Book of Investing Rules as much as we enjoyed compiling it.

—Philip Jenks
—Stephen Eckett

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