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My first book report: Just One (more) Thing
I just finished Just One Thing by John Maulden. He picks eleven people who have run or made money and asks each to give their one best idea. It offers a wide variety of perspectives on how to manage and make your money for the long haul, without the drudge of buying individual books by each and plodding through 300 pages to find 10 good ones. Below I’ve tried to encapsulate a few of what I think are their best thoughts:
Andy Kessler: I read one of his previous books; he’s a stock picker at heart. He talks about how to find trends and then stocks in the stock market. One thumb up.
Dennis Gartman: A trader. You’re here to make money not fall in love with your own ideas. He presents 13 rules for jumping into stocks—and jumping out. It’s always good to have basic reminders on proper timing behavior.
Mark & Jonathan Finn: These guys beat on past performance as predictor of future performance. Anyone sell their bonds recently and buy oil stocks? Read this.
A.Gary Shilling: He talks about bonds and interest rates and makes the case for a general lowering of treasury rates for the foreseeable future--and the money to made off them. That old, seemingly secure investment can make you big bucks. Two thumbs up.
Ed Easterling: I have one of his recent books and refer to it often. In seventeen pages he lays out a detailed understanding of risk. It’s like getting hit with a 2x4—and dang well worth it--in these dark times of high PEs and low interest rates. He criticizes and refines modern portfolio theory (MPT) and capital asset pricing model (CAPM) without sending you scurrying. Technical, but worth the read. Two big thumbs up.
John Montier: A brief look at market and personal psychology. Are you a Spock or McCoy? He explains how you use your heart and mind in decision making processes. He messed with my mind--but in a good way. A good look at the decision making process.
Bill Bonner: Tales from the dark side. He beats on every one. But it’s not necessarily bad. Eight pages of it though: What’s wrong with Keynes and the economy and economists . . . bla, bla and more good bla (at least to me).
Rob Arrnot: Make two percent more by buying equal-weighted indexes funds instead of cap-weighted indexes. Worth a look for die hard indexers—I guess.
George Gilder (Mr. Silicon): He shows off his own stuff. Read at your own risk.
Michael Masterson: Aimed at the youngsters who are just starting out in their work careers. Main point: Become an invaluable employee. Another read at your own risk for the over forty crowd.
Richard Russell: My hero, he’s now 81 years old and has seen it all including the Great Depression—and without suffering from Alzheimers. Rule #1: Compounding works; Rule #2: Don’t lose money; Rule #3: Wealthy people don’t need the markets (e.g. they are value investors and can easily wait for good investments to come to them; this is why they are wealthy); Rule #4: Look for values—“The only time to stray outside the basic compounding system is when a given market offers outstanding value.” The whole economic world—as retired people need it—is contained in his rules. The caveat: By trading in and out of the market, you are trying to beat time and compounding; be wary of the siren song of hope. Two thumbs and two big toes up.
John Mauldin: He thinks we are in the (late?) middle of a bull portion of a secular bear market. He believes in cautious optimism, showing the consequences to our portfolios of investing into a high PE environment or waiting for lower PEs. Lots of good ideas and technical data to reinforce his opinions. To my mind, he would help a stranger on the side of the road—and help far more than a broker or financial planner.
The one thing I really liked about this book, even if you don’t like any of the specific articles, is that it gets you thinking again: It prevents portfolio drift that can happen over time or encourages you to make needed refinements to your portfolio. It stimulates your thinking and refines your own actions to improve it—all for less than the cost of two trades or one if you use Vanguard. This book now becomes a valuable reference tool for me. Oh, and I liked it too if I haven’t mentioned that already.
--Greg
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Compounding: Never forget! Never not remember!
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