Investment Books
Book Reports:
The Investment Zoo by Stephen Jarislowsky 2005 - the best of the lot
Value Investing from Graham to Buffett and Beyond by Greenwald et al, Wiley - a work in progress Jan 2006
Bull's Eye Investing 2004 by John Mauldin, Wiley
Against the Gods 1996 by Peter Bernstein, Wiley
Bull! A History of the Boom 2003 by Maggie Mahar, Harper Business
Triumph of the Optimists - Dimson et al, 2002 - 101 years of global investment returns - Princeton
Stocks for the Long Run - A guide to Selecting Markets for Long-Term Growth, J. Siegel, 1994 - Irwin
The Triumph of Contrarian Investing by Ned Davis, McGraw-Hill
Yes, You Can Time the Market 2003 by Stein and DeMuth, John Wiley & Sons
John Neff On Investing 1999 by John Neff, John Wiley & Sons
The New Reality of Wall Street by Donald Coxe, 2003, McGraw Hill
Irrational Exuberance by Robert Shiller, 2000, Princeton
Dow 36,000 by Glassman and Hassett. 1999
go back to front page index
The book most of my investment ideas are based upon is The Intelligent Investor by Benjamin Graham - Harper and Row. In his 2003 Letter to Shareholders of Berkshire Hathaway, Warren Buffet made this comment: “Jason Zweig last year did a first-class job in revising The Intelligent Investor, my favourite book on investing.”
In Chapter 14, Graham outlines “criteria suggested for the selection of specific common stocks”
Here are his headings. Buy the book and read the detail before you buy another stock. It'll save you thousands.
1. Adequate Size of the Enterprise
2. A Sufficiently Strong Financial Condition
3. Earnings Stability
4. Dividend Record - “Uninterrupted payments for at least the past 20 years.”
5. Earnings Growth
6. Moderate Price/Earnings Ratio
7.Moderate Ratio of Price to Assets
“Current price should be no more than 1½ times the book value last reported. However, a multiplier of earnings below 15 could justify a correspondingly higher multiple of assets. As a rule of thumb we suggest that the product of the multiplier times the ratio of the price to book value should not exceed 22.5. (This figure corresponds to 15 times earnings and 1½ times book value. It would admit an issue selling at only 9 times earnings and 2.5 ties asset value, etc.)“
Since my April 2003 report, I provide the Graham price for all the stocks in my list using this formula and average earnings over the last three years.
These books outline what I do:
• The Investment Zoo by Stephen Jarislowsky, 2005 - buy this book
• Jeremy Siegel's new book, The Future for Investors was reviewed in April 2005 Connolly Report
• The Single Best Investment - Creating Wealth with Dividend Growth - by Lowell Miller (Adams Media)
• The //Dividend Growth Investment Strategy// (Citadel Press, 2001 $33 Cdn) outlines what I do too, but the author, RoxAnn Klugman, puffs it up a bit too much for my liking. Click on the link for a brief review of the first 123 pages of this book…the rest of the book is data on American stocks.
All About Dividend Investing, 2004 McGraw-Hill by Schreiber and Stroik
My nine other favourite investment books are:
The Battle for Investment Survival, Gerald M. Loeb
Stocks for the Long Run, Jeremy J. Siegel
Fear, Greed and the End of the Rainbow, Andrew Sarlos
John Neff on Investing, John Neff
Contrarian Investment Strategies - The Next Generation, David Dreman
Irrational Exuberance, Robert J. Shiller
Triumph of the Optimists, Dimson et al
Beating the Street, Peter Lynch
What Works on Wall Street, James P. O'Shaughnessy
Books I would not waste my money on:
You're Fifty. Now What? by Charles R. Schwab
While waiting for our children to get off work in the library of RCCL's Navigator of the Seas in January 2003, I noticed this book and took ten minutes to look through it. I would not buy it.
Test #1 - In the index, dividends were only mentioned on two pages. Here's what Schwab said on one of those pages. “To have enough to live on from bond interest and dividends, you would have to be heavily weighted in bonds and stocks that pay higher dividends.” I don't agree. If you bought the dividend-paying common stocks some years before retirement, with subsequent dividend growth the yield on the common stocks could be higher than current bond interest. I'm 100% dividend-paying common stocks in my retirement portfolio: they provide a growing income, bonds don't.
Test #2 - Schwab's five asset allocation plan all recommend mutual funds - from 20% to 95% depending upon age. Mutual funds are not noted for providing income. In retirement you'd have to sell fund units. What do you do when the funds decreased in value?
The Mind of Wall Street by Leon Levy (Public Affairs; 220 pages; $39.50)
I liked the review in The Economist (Jan4 2003) for this book and as Levy had more than 50 years in the market and was interested in the psychology of the market, I bought it at Novel Ideas the independent book store in Kingston. I should not have. I was after some pearls of wisdom: I didn't get many…mostly Levy's memories which were a waste of time for me. I really don't care who he was working with at Oppenheimer since 1951. I stopped reading the book half way through. Here's one pearl:
“Ignoring the maelstrom of the media-perhaps nothing is more preposterous than the explanations commentators give from price movements on Wall Street on any given day-makes it easier to focus on what is important. It also helps to have a broader perspective.”
(Ten foods that pack a wallop for health: broccoli, tomatoes, spinach, garlic, oats, nuts, salmon, blueberries, red wine, green tea, small red beans)
