The Four Pillars Second Edition

[tulak]

Bill Bernstein has a second edition of The Four Pillars of Investing out later this month. The Kindle version will be available July 25th.

I'll read the newer version of the book. I'm curious to see how he's integrated the last 10+ years of market activity into this version. Hopefully the update is new enough to include analysis of recent inflation and rise of interest rates, along with correlations with past occurrences in history. I'm also curious to read about his advice in terms of portfolio construction, especially after his real life experiences post-2008.

https://www.amazon.com/Four-Pillars-Investing-Second-Portfolio-ebook/dp/B0BXFMSM9H

Edit to add: should be 20+ years of market activity. The first edition came out in 2002.

 

[tulak]

Here's more info directly on Bernstein's website, including a foreword and the book's intro.

The Four Pillars of Investing

 

[joesxm3]

That book is probably the single most important item helping me to FIRE.

 

[OldShooter]

Ordered. Thanks.

 

[Midpack]

Wow. The first edition was the most influential book on investing of my life, my IP was/is still based on it, and that has served me very well. I know he changed radically after many of his high NW clients went crazy on him and acted against his most basic advice during the 2008-09 financial meltdown, so I can’t imagine how the second edition will compare to the first. Some of what he’s written since 2008 seemed counter to FP first edition. But I just ordered mine hard copy, something I rarely do anymore - everything I read is eBook or library these days. Looking forward to it!

 

[W2R]

Wow. The first edition was the most influential book on investing of my life

Same here! I read it slowly and carefully, every single word of it, several times. It was probably the most valuable book on investing that I read, although it might not have been had I not read and studied it so carefully. I felt like it helped me to develop better instincts when it comes to investing.

 

[tulak]

Same for me. I first heard about and read Four Pillars in 2007 and it completely changed how I invested. Since 2008, I moved away from individual equities (beyond some play money) to index funds and have had consistent/superior performance since then. It’s also the time I found Bogleheads and this forum.

I was lucky enough to meet Bernstein many years ago and thank him in person. He was even kind enough to sign my copy of Four Pillars.

It easy for me to say that without Four Pillars, I would be in worse financial shape and retirement would be questionable or not as smooth. Maybe I would have eventually figured it out? But it’s no question that Four Pillars put me on a better path.

 

[frayne]

On my Amazon wishlist. Read the first edition sometime back in the early 2000s, after seeing the quote by Bogle about being the best investment book of 2002.

 

[Koolau]

I read the first edition based on recommendations right here. I hadn't even joined FIRE Forum at the time - just lurked and learned. A great book. I'll be interested in what has changed - certainly the world of investing has changed a lot since 2002.

 

[Trooper]

Has anyone read the second edition? I loved the first one and it became my bible for investing and financial planning. I have a friend who is struggling with the topic and I Initially wanted to give him the first edition, prior to knowing there was a second one out.

For anyone who has read the second one, would you recommend it or the the first edition to a novice investor? Just wondering if there are more advanced topics in the second one that may confuse/discourage my friend.

 

[plsprius]

I recently read the 2nd edition, or tried to as it's quite long. I ended up mostly reading the summaries at the end of each chapter. Bernstein makes great points.

Although the book does a fine job at explaining the '4 pillars,' I think it might be too sophisticated for new investors. A better bet for a new investor might be Morgan Housel's The Psychology of Money (which Bernstein recommends in his 2nd edition). Another text he recommends is A Random Walk Down Wall Street.

Unfortunately, I can't comment on how this 2nd edition compares to the 1st, since I don't think I read the 1st edition--even though I should have!

 

[tulak]

I read the second edition and thought it a worthwhile update from the first.

But I wouldn’t recommend it for a novice investor. I would recommend the Bogleheads’ Guide to Investing or Millionaire Teacher instead.

 

[Koolau]

I read the second edition and thought it a worthwhile update from the first.

But I wouldn’t recommend it for a novice investor. I would recommend the Bogleheads’ Guide to Investing or Millionaire Teacher instead.

I would say it depends on the motivation level of the reader. I was "ready" for it (1st edition - have not even seen a copy of the 2nd ed.) I KNEW I needed the wisdom and knowledge in that tome. So even though it was a bit of a struggle, I read it cover to cover.

I would consider reading the 2nd edition but doubt if I'd go out and buy a copy at this point.

 

[Midpack]

Has anyone read the second edition? I loved the first one and it became my bible for investing and financial planning. I have a friend who is struggling with the topic and I Initially wanted to give him the first edition, prior to knowing there was a second one out.

For anyone who has read the second one, would you recommend it or the the first edition to a novice investor? Just wondering if there are more advanced topics in the second one that may confuse/discourage my friend.

I’ve read both cover to cover, and like you my IP was/is based on the 1st edition.

They are both excellent books, but the 2nd edition is just an update, nothing substantially new or “more advanced.”

If your friend could benefit from the 1st, the 2nd would be beneficial. You’re the only one who can judge if he/she isn’t up to it…

 

[target2019]

I bought two copies, one for each child (over 30).

They each have had plenty of exposure in the last ten years. Where they can improve is deciding on a model or approach that puts it all together. So I'll let each know that they should just re-read the book as questions come up in the future.

So it's a bit of a challenge, and you might not get it all in one read.

 

[Koolau]

I bought two copies, one for each child (over 30).

They each have had plenty of exposure in the last ten years. Where they can improve is deciding on a model or approach that puts it all together. So I'll let each know that they should just re-read the book as questions come up in the future.

So it's a bit of a challenge, and you might not get it all in one read.

I've considered doing that, but Child #1 is buried under kids/husband duties. She has NO time and little interest in investing. Kid #2 believes nothing anyone else says. Kid #3 is making her way just fine without much input from me.

I wish my parents or someone had given me a similar book back when I was 30. Oh, well. I think I've made up for lost time - if not all the lost money.

 

[OldShooter]

... I wish my parents or someone had given me a similar book back when I was 30. Oh, well. I think I've made up for lost time - if not all the lost money.

IMO Bernstein's books are a little heavy for not-very-interested young people. This one is aimed at them and only 16 pages: "If You Can" by William Bernstein https://www.etf.com/docs/IfYouCan.pdf (free download) Amazon sells a hard copy too. Six bucks. https://www.amazon.com/If-You-Can-Millennials-Slowly/dp/098878033X The hard copy will maybe more likely to get picked up off a table and read.

 

[Koolau]

IMO Bernstein's books are a little heavy for not-very-interested young people. This one is aimed at them and only 16 pages: "If You Can" by William Bernstein https://www.etf.com/docs/IfYouCan.pdf (free download) Amazon sells a hard copy too. Six bucks. https://www.amazon.com/If-You-Can-Millennials-Slowly/dp/098878033X The hard copy will maybe more likely to get picked up off a table and read.

Thanks! I'll look into that for Christmas stocking stuffers for the kids.

On a slightly related (unrelated?) note to the Bernstein book: I've been searching for my copy of Burns and Kotlikoff's "The Coming Generational Storm." As I was looking for my copy of Bernstien's book (I haven't found it) I ran across the B&K book. Yippie.

Returning you now...

 

[TickTock]

For anyone who has read the second one, would you recommend it or the the first edition to a novice investor? Just wondering if there are more advanced topics in the second one that may confuse/discourage my friend.

I wouldn't recommend it for a novice investor. I'd go with The Automatic Millionaire by David Bach for starters. Then, if interested, read Four Pillars.

Four Pillars wasn't *the* book that got me going, but it was *a* book - I have about seven books from the early/mid 2000's - Armstrong, Bernstein, Bogle, Malkiel, Siegel. All similar, but each has its own twist/take, and they reinforce each other.

 

[target2019]

Yes, there are individual differences among our children. I think it's been pretty clear throughout this discussion that the book isn't for new investors.

There's another thread that is discussing investing/financie curriculum, what books, and so on. So there are children as well as adults that get nothing from a book. Ours had a lot of exposure to books from day one.

Still, I don't expect they're going to read this book cover-to-cover. They're on the path, and successful without this book. But my message has been consistent with this book.

My note to them is something like, "If you have a question, and I'm not available, please read this book."

 

[dknighd]

The first thing kids have to learn - spend less than you earn - save for the future. You do not need a book for that.

 

[Koolau]

The first thing kids have to learn - spend less than you earn - save for the future. You do not need a book for that.

It's true that some kids figure it out on their own. I did - but I didn't learn how to invest. Reading a book which shows just how advantageous it is to save is even better than going on instinct. Also learning how to invest is golden IMHO though YMMV.