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Book Recommendation: The Investor's Manifesto
Old 11-01-2009, 07:47 AM   #1
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Book Recommendation: The Investor's Manifesto

I am essentially a Boglehead, and the guidance of Dr William Bernstein has been the most useful I have found. My portfolio has long been designed based on his The Four Pillars of Investing, the best single investment book ever written IMO.

His first investing book, The Intelligent Asset Allocator, received critical acclaim by academics and professionals but was considered much too technical by most. I am an Engineer who enjoys investing, and frankly I found it too difficult.

His second investing book, The Four Pillars is much more user friendly and convincing, and it's my bible, but still considered too difficult by many.

His third investing book, The Investor's Manifesto is, by the authors own admission, a condensed, simplified version of Four Pillars but the essence is all still there. He also talks about the 2008 meltdown as it relates to his investing philosophy. I would highly recommend the new book if you haven't read the first two. FWIW...

I also picked up The New Coffeehouse Investor by Bill Shultheis. I recommend the original and second editions highly, the new version is longer, more confusing and esoteric to my surprise. YMMV
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Old 11-01-2009, 08:28 AM   #2
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Who are the authors of these 2 books? You mentioned Bernstein as the author of 2 of his books, but did he also write these other 2 books you mentioned?
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Old 11-01-2009, 08:39 AM   #3
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Who are the authors of these 2 books? You mentioned Bernstein as the author of 2 of his books, but did he also write these other 2 books you mentioned?
Good point, I have edited my original post to clarify. Thanks...
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Old 11-01-2009, 09:25 AM   #4
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No question that Bernstein is one of those writers that are easy to read. I can recommend, also, his The Birth of Plenty and A Splendid Exchange: How Trade Shaped the World.

Anyway, if you go to his website, you can download a "sneak preview" of the subject book.
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Old 11-01-2009, 11:24 AM   #5
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I like the way Bernstein writes. When reading The Birth of Plenty I was thinking: "He must have an army of researchers, no one researcher could get and combine all of this information."

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Old 11-01-2009, 12:43 PM   #6
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So if I read (and mostly understood) his first two, this sounds redundant to me. Would you categorize it that way?
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Old 11-01-2009, 02:19 PM   #7
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So if I read (and mostly understood) his first two, this sounds redundant to me. Would you categorize it that way?
Yes, Investor's Manifesto is a condensed & mildly updated Four Pillars.
Quote:
I would highly recommend the new book if you haven't read the first two. FWIW...
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Old 11-01-2009, 05:18 PM   #8
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Please understand that all kinds of people read and participate here. I'm afraid my viewpoint may not be popular, but.....

I found The Four Pillars of Investing to be the best sleep aid ever invented. For those of you that live and breathe this stuff, I'm sure it was interesting. For me it was too detailed, too complex, and .....I found myself wishing for something a bit simpler to read.

I read about 8 financial books before I retired two years ago at age 56. I found that the best book for me was The Coffeehouse Investor by Bill Schultheis.

If you're looking for a simple book that is very informative and entertaining you might check it out. I got both books from my local library. Recently I bought an old copy of The Coffeehouse Investor for my 37 year old step son. Before I gave it to him, I re-read it. It confirmed my opinion. I should also mention, that this book can be read in about 4 hours and I never fell asleep while reading it.
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Old 11-01-2009, 09:45 PM   #9
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Please understand that all kinds of people read and participate here. I'm afraid my viewpoint may not be popular, but.....

I found The Four Pillars of Investing to be the best sleep aid ever invented. For those of you that live and breathe this stuff, I'm sure it was interesting. For me it was too detailed, too complex, and .....I found myself wishing for something a bit simpler to read.

.
Hey you aren't alone. My local library didn't have the print version, so listened to the audio version. Generally while on the computer, although sometimes on an MP3 while walking. It wasn't boring enough for me to fall asleep while walking, but while listening to it on the computer at least twice .
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Old 11-02-2009, 08:40 AM   #10
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From the preface:
Quote:
Successful investing requires a skill set that very few people possess.
Quote:
This is difficult for me to admit; after all,
I have written two books premised on the idea than anyone,
given the proper tools, can turn the trick.
Once again, I was wrong. Having emailed and spoken
to thousands of investors over the years, I have come to the
sad conclusion that only a tiny minority will ever succeed in
managing their money even tolerably well.
Successful investors need four abilities.

First, they must
possess an interest in the process…. If money management is
not enjoyable, then a lousy job inevitably results, …

Second, investors need more than a bit of math horsepower,
far beyond simple arithmetic and algebra, … [including] an understanding of the
laws of probability and a working knowledge of statistics.

Third, investors need a fi rm grasp of fi nancial history,
from the South Sea Bubble to the Great Depression. Alas, as
we shall soon see, this is something that even professionals
have real trouble with.

…fourth ...: the emotional
discipline to execute their planned strategy faithfully, come
hell, high water, or the apparent end of capitalism as we know
it….

I expect no more than 10 percent of the population
passes muster on each of the above counts. This suggests
that as few as one person in ten thousand (10 percent to
the fourth power) has the full skill set.
He goes on to say that these four abilities probably are positively correlated, so 1/10,000 is too low.

I'll add a fifth: If you are a couple, then either you need to share these abilities, or have one party who has complete faith in the other.
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Old 11-02-2009, 09:47 AM   #11
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Originally Posted by Independent View Post
From the preface:


He goes on to say that these four abilities probably are positively correlated, so 1/10,000 is too low.

I'll add a fifth: If you are a couple, then either you need to share these abilities, or have one party who has complete faith in the other.
Independent - your 5th is a good addition. I think there are a reasonable number who possess 1-3, number 4 is the deal breaker for many. Just anecdotally when the markets were crashing the number of posts here and at Bogleheads implying the end of the investing world as we know it and rash moves out of the market was suprisingly high.

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Old 11-02-2009, 10:13 AM   #12
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Besides Bernstein's copy editor and Ziggy, I'm the other guy who read Intelligent Asset Allocator. I enjoyed being able to dig as deeply as I could handle. After being paid to read reactor plant maintenance manuals, I refuse to be intimidated by the gory details. I can still be bored by bad writing, but luckily Bernstein doesn't have this problem.

The nice thing about Investor's Manifesto is its appeal to those who are just starting out-- for example our teen.

I enjoyed Birth of Plenty and Splendid Exchange most of all. Our kid is a world history junkie and these two books really opened her eyes.
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Old 11-02-2009, 03:27 PM   #13
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Besides Bernstein's copy editor and Ziggy, I'm the other guy who read Intelligent Asset Allocator. I enjoyed being able to dig as deeply as I could handle. After being paid to read reactor plant maintenance manuals, I refuse to be intimidated by the gory details. I can still be bored by bad writing, but luckily Bernstein doesn't have this problem.
I liked the Intelligent Asset Allocator also. Thought it was well written and I learned quite a bit from it. I was a little surprised that most people found it rough going. This shows that I live in my own little world.

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Old 11-02-2009, 03:30 PM   #14
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Besides Bernstein's copy editor and Ziggy, I'm the other guy who read Intelligent Asset Allocator. I enjoyed being able to dig as deeply as I could handle. After being paid to read reactor plant maintenance manuals, I refuse to be intimidated by the gory details. I can still be bored by bad writing, but luckily Bernstein doesn't have this problem.

The nice thing about Investor's Manifesto is its appeal to those who are just starting out-- for example our teen.

I enjoyed Birth of Plenty and Splendid Exchange most of all. Our kid is a world history junkie and these two books really opened her eyes.
Ok - I was reading Barbara Cartland Romances for my world history at your daughter's age as well as figuring out what to do with the babysitting money I made (had a pretty good business - bought mostly.....Barbara Cartland Romance books with business proceeds - didn't know what a stock was back then - clueless - except for the Earl that swept the Princess off her feet and the beuatiful dress she wore while being swept off her feet :-))

Guess I'll have to go check out these other books by Bernstein - I found the CoffeeHouse Investor to be boring - go figure - loved the history in the
Four Pillars - especially the run on tulip bulbs - I have one of those tulip vases that has one opening for one bloom and laugh when I visited the Kuekenhoff Gardens and surrounding area full of tulips and bulbs.
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Old 11-02-2009, 03:32 PM   #15
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Independent - your 5th is a good addition.
DD
The 5th seems to make decisions harder at times. Sometimes it is a good thing, though. That is, to have to explain the moves and get consensus. Slow can be good when deciding how to portfolio manage.
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Old 11-28-2009, 08:19 AM   #16
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An article by Scott Burns in praise of this book can be found here:

The Investor's Manifesto - Registered Investment Advisor

A good read, if only for this wonderful quote:

Quote:
“The reason that ‘guru’ is such a popular word is because ‘charlatan’ is so hard to spell.” —William J. Bernstein
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Old 11-29-2009, 06:44 PM   #17
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I never heard of The Four Pillars until I came to this forum a little more than a year ago. Recently, I checked out a copy from the local library to look through. It was good, but I have read similar material from A Random Walk down Wall Street by Malkiel, a buddy of Bogle. By the way, Malkiel has revised his book since 2000, but I kept forgetting to check it out.

Then, recently recalling that Bernstein was (is) a neurologist and based in Oregon(!), I recalled reading about someone just like that in BusinessWeek, in fact someone introduced by Barker, a columnist who has since retired. Upon checking on the Internet, YES, it is the same Bernstein. See attached link. One pat on the back I award myself for a good memory.

The Barker Portfolio: Doctor's Orders

Now, in the attached 1999 article, Barker mentioned that Bernstein was getting into managing other people's money. A hedge fund manager? Does anyone know what comes of that?

I have not read The Intelligent Asset Allocator, but I am going to make an online reservation with the local library now.


PS. It's done. I will have Intelligent AA and a 2007 edition of Random Walk waiting for me at the library.
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Old 11-29-2009, 07:06 PM   #18
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Now, in the attached 1999 article, Barker mentioned that Bernstein was getting into managing other people's money. Does anyone know what comes of that?
Last time I looked into it, he will manage your money for you, as long as you have a minimum of $25 million on account. http://www.efficientfrontier.com/efa.htm Unfortunately our net worth was below $25 million after the decline from Fall 2007.



Of course it was several orders of magnitude below that before then too...
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Old 11-29-2009, 07:09 PM   #19
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So, we will not know what he is charging for his service. I wonder what his track record is.
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