I was going to write an individual post reviewing in depth each of the six books listed below. But since I’m a bad citizen and have given in to the fact that I will never find enough time to do so, I’m going to give a quick review for each of them here. So in the order I’ve read them…

The Real Estate Coach by Bradley J. Sugars.
This book was kind of hard to read at first. It is written in scenes, staring the made up characters Brian and Sarah as they learn from their Real Estate coach. The dialog is not well written and rather tedious. I’d pick out the best (or worst) example, but I don’t want to spend the time and I probably don’t have to. Here is an excerpt chosen at random from page 16.

As they sat back down with fresh drinks the Coach began again.

“What we are going to look at now are the types of property deals that you can do. You see, they will figure in your rules when you go out looking for properties to buy. So what are the different types of deals, then?”

Brian looked up at the ceiling for a while, and then replied: “I have heard about negatively geared deals, Coach. Is this what you mean?”

“Exactly. Any idea what the other two are?”

First, what do I care that Brian and Sarah have “fresh drinks”? In any other Real Estate book, this section would have looked like this.

Type of Real Estate Deals

  • Negatively Geared Deals
  • Quick Cash Deals
  • Positive Cashflow Deals

To be fair, I didn’t know a lot about real estate before reading the book and I definitely learned a bit from it. I just feel I could have learned as much in 10 pages instead of 200. However, for those of you out there who have a hard time reading textbook like
books about real estate, this might be the book for you. You’ll be tricked into thinking your reading a novel, but you’ll really be learning about real estate!

The content of the book is very introductory and doesn’t go into as much detail as you will need before actually going out there and getting your hands dirty in real estate. And that’s not such a bad thing since the main point of the book is that a “coach” is going to help you more than any book. So after reading this go out and find a coach. Peeps with a basic understanding of real estate concepts can pass on this one or look for education elsewhere.

Become the CEO of You, Inc. by Susan Bulkeley Butler
Susan spoke at an Accenture get together last Summer. Susan had worked for Accenture for a while back when it was Arthur Anderson Consulting and worked in the CEO’s office through the Accenture IPO. She was largely responsible for the establishment of Accenture’s “Change Management” division, which now accounts maybe 1/5 of Accenture’s consultants (just a guess there).

Susan’s message at that get together, and in this book too, was more applicable to women trying to excel in the traditional business culture. However, there was a bit us guys could learn from her too.

We were all given a copy of her book, compliments of Accenture. I read about the first third then lost interest and moved on to other reading. The truth is I put the book down because of it’s focus on women (which is okay if you’re a woman) and because of an exchange I had with Susan at the Accenture meeting. I introduced myself to her and told her I worked on an investing and business blog. I let her know that I could review the book on the site and possibly drive some sales her way. She seem very disinterested and brushed me off. At the time I got this feeling that she just had something against member of the opposite sex. I’m sure she’s a great person when you get to know her and wonderful in her private life, but this is the impression I got from her then. And it dissuaded me from putting too much effort into writing a review for the book.

I’m a punk for airing this in the public here. I know that. But it’s why I don’t have much more to say about this. If you are a woman, working in the business world, Susan probably has a lot to tell you. She could be a role model for you. Her story really is incredible, going from the only woman at Accenture to one of the highest positions in the company. For me, eh…

Built to Last by Jim Collins and Jerry I. Porras
Here’s a good one. This was recommended by Chris, and I read it while on vacation in Maine last Summer. The book relates a study of some of the greatest companies of the last 150 years: GE, HP, 3M, Merk, Ford, Wal-mart, Disney, and a few others. The research tries to get to the heart of what made (and makes) these companies so great. What makes these companies “visionaries”?

For someone who is in the middle of a startup, Built to Last helped me think on a higher level about our company. Activities like writing mission statements and lists of core values are great, but the important part is to actually live up to them. Here are some of the chapter titles, which do a great job of summing up the ideas behind the book.

  • Clock Building, Not Time Telling
  • Preserve the Core, Stimulate Progress
  • Big Hairy Audacious Goals
  • Cult-Like Cultures
  • Try a Lot of Stuff and Keep What Works

The first of that list really resonates with me. Great companies are those that build clocks, rather than tell time. While working on the next new feature for WineLog (telling time), it’s important (and very difficult) to keep perspective and remember to devote time and effort to developing the WineLog company itself (clock building).

The guys at 37Signals are a great example of a company that clock builds instead of time tells. Sure they have a lot of great software applications, but they are focused on building their company into a fine-tuned software building machine. Ten years from now, when Basecamp is but a memory (or maybe a ubiquitous development tool), 37Signals the company will be still chugging along doing their thing.

Built to Last might be a help to investors looking for some ways to sort well-managed companies from poorly-managed companies. There’s even a few stock charts in there. The book is far more useful however to entrepreneurs and business professionals in management positions.

Finding the Hot Spots by David Riedel
I read this book back in Fall 2006. The subtitle for this book is “10 Strategies for Global Investing”. I can’t remember what any one of them is, but the book does have 10 chapters… I guess that fits. Here are the chapter titles/tips:

  1. Invest Internationally for Yourself
  2. Think Globally, Invest Locally
  3. Diversify–Don’t Put All Your Eggs in One Basket
  4. Understanding Relationships: Who is Benefiting from Current Trends?
  5. Invest in Line with Government Goals
  6. Don’t Buy Regulatory Structure
  7. Know the Shareholders
  8. Buy the Banks
  9. The Impact of Currency
  10. Don’t Be the Last One In

FTHS is a quick read, and so a decent book for people who are thinking about getting dirty with international equities. The main points I got from this book were (1) you need to invest internationally since that’s where 20% of stocks are and (2) you shouldn’t be so scared to invest in foreign stocks; in fact it’s easy! The didn’t get much more of substance from the book.

Jim Cramer’s Mad Money – Watch TV, Get Rich by James J. Cramer with Cliff Mason
Confessions of a Street Addict is a great read for anyone. Jim Cramer’s Real Money (my review) is a good read for any investor. Cramer’s most recent book Watch TV, Get Rich is a book to be read by Jim Cramer fans only.

If you watch Jim’s show, you’ll love the book. It goes behind the scenes into the meaning behind most of Jim’s catch phrases and sound clips.

He also details how the lightening round is run and encourages readers to do lightening rounds of their own as a way to train their investing muscles. It’s actually a decent plan and might help you at least sound more intelligent about stocks. It will take a lot of time, but I bet you will have a better “feel” for the overall market if you follow Jim’s plan. If this idea turns you on, go to a book store and read the lightening round chapter; you don’t need the whole book for just this.

The other addition in this book is a new version of Cramer’s Cyclical Investing and Trading chart. The chart has recommendations for which sectors to be rotating into and out of at different times in an economic cycle. If there is interest, I might write a seperate post on this. Again, I’ll try to contact Jim’s crew to see if we can post an image of the chart. We didn’t have any luck last time though.

The Only Three Questions That Count by Ken Fisher
I’m only about two thirds through this whopping 365 page book, but I can already recommend it. It is different from most of the investing books I’ve read, coming at investing from a higher level and yet still managing to be relevant. I won’t keep you in suspense any longer; here are the three questions:

  1. What do you believe that is actually false?
  2. What can you fathom that others find unfathomable?
  3. What the heck is my brain trying to do to blindside me?

The first two questions revolve heavily around efficient market theory and the idea that the best way to make money in the market is to know something that others don’t.

Question 1 involves a lot of debunking of commonly held investing beliefs… like high P/Es are bad for the market, a federal deficit is bad for the market, an inverted yield curve is bad for the market. Fisher gives convincing arguments against these beliefs. And while you don’t necessarily want to go out and bet against these theories when you find they are wrong, you can at least avoid betting with them.

If everyone else is wrong, how do you find a winnable bet? Questions 2 is an exercise for finding “investing technologies” you can use to inform your investing decisions. And the key here is to find an indicator or strategy that no one else knows about. Actually even better is when everyone knows about it, but they’re still not using it. Fisher uses his “discovery” of the price-to-sales ration (or PSR), which was hugely successful for him in the 80s and supposedly a big deal. The idea is/was that low PSR stocks outperformed higher PSR stocks.

When PSR values had to be calculated by hand and were relatively unknown to investors, the strategy worked well. By now the technology has been priced into the market since everyone knows about and believes in it. For this reason, we should always be working to develop our next strategy. Fisher’s book kind of gives you the base tools to do this.

Question 3 discusses behavioral finance and some common mistakes that investors make that results in lower returns for the average investor. Fisher prefers to explain a lot of these concepts in the frame of evolutionary biology. He talks a lot about our “prehistoric brains” and anecdotes around why cavemen would have been more fond of big things than small things for example.

One of the main points Fisher makes with question 3 is about how cavemen (and all of us to this day) busy ourselves with “accumulating pride” and “shunning regret”. Back when we were hunter-gatherers, both pride and regret kept the hunting males hunting. If they caught 2 big mammoths while hunting, their pride would send them back to that hunting ground. If they didn’t manage to catch anything, they would blame the lack of a catch on factors like the weather or a random saber tooth tiger that scared the animals away. If the hunter could convince himself that it wasn’t his own fault he didn’t catch any food, he would try again the next day. I think Fisher explains it all better than I have, but maybe you get the point.

So overall, I think Three Questions is a good book for investors. If you’re well read, a lot of this will be familiar, but I’m sure everyone could learn something from the book. The greatest thing this book will do for you is teach you to think for yourself. And if you can use the three questions to develop and test your own strategies, you’ll be placing better bets and setting yourself up to outperform.

Ha, look like my quick reviews turned out to be pretty long actually. This should be a lesson on how to motivate yourself…

Just title whatever you are working on to “Quick _______”, which will fool you into getting started. Then when you get into things, you’ll be forced to finish and will end up with something almost as non-quick as it would have been in the first place.

I think I may split these up and repost them later. For now, I like them all in one post.

Financial Book Reviews

Jason posted a series of book reviews at InvestorGeeks, covering the following titles:

* The Real Estate Coach by Bradley J. Sugars.
* Become the Ceo of You, Inc by Susan Bulkeley Butler
* Built to Last: Successful Habits of Visionary Companies by Jim Collins and Jerry I. Porras
* Finding the Hot Spots: 10 Strategies for Global Investing by David Riedel
* Jim Cramer’s Mad Money by James J. Cramer with Cliff Mason
* The Only Three Questions That Count: Investing by Knowing What Others Don’t by Ken Fisher

How about some more details on Fiding the Hot Spots, chapters 6 and 8.

Agree about your call on Susan – knowing that someone is rude makes me less inclined to bother reading their books and more inclined to believe they made it to the top by a series of lucky events.

Does Ken Fisher provide any other insights other than the three questions? It seems he is living on past glory with price to sales. I know it is used commonly now, and I was considering buying his book, but it smells to me too much like Motley Fool.

I would recommend Ken’s book. Even if you don’t get any bankable strategies out of it, I think you’ll learn a lot about the process of coming up with new strategies on your own.

As I’ve continued reading the book, I think there is more immediately applicable stuff in the later chapters. The part I’m reading now talks a lot about the supply and demand of stocks. It’s interesting reading and great exercise in thinking about equities in a way we don’t often think about.

Some of the stuff I’ve read in the book is already working its way into my trading decisions.

RE Finding the Hot Spots chapters 6 and 8:

Chapter 6 (Don’t Buy Regulatory Structure) talks about how government regulation is generally bad for business. Further, he discusses the fact that nearly all government-granted monopolies end up being bad businesses. The truth is that they just get lazy and have a lot of trouble staying profitable when the government protection and subsidies go away. So while it might sound like a great idea (“These guys have a monopoly on x!”) it’s usually an area you want to avoid. You can probably come up with a couple of US examples…

Chapter 8 (Buy the Banks) discusses how banking is the foundation for economic growth. Is a country’s economy is booming, it is very hard for banks not to profit from it. And so they are a good option in developing countries.

Riedel points out some of the big bank failures (in Latin America and Southeast Asia), he says that these places shouldn’t be avoided because of it. These crisis have “purged” all of the bad companies and are “providing solid growth for the future”.

He discusses a bit of basic banking terms and ideas and points out some more of the risks, but generally thinks that banks are a good way to enter a new. It’s kind of the default bet until you find out where the bigger money is going to come from.

Comments are closed.