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* What the heck is my brain doing to blindside me now.The idea is to get us to think more deeply. Trade deficit. Like me, he uses E/P relative to bond yields to try to estimate whether markets are rich or cheap. The three questions are simple ones, and they have been mentioned elsewhere on the internet, so here they are: * What do you believe that is actually false. "Three questions.
Investing is far more complex than that." I would say that to myself.After reviewing his most recent book, I said to myself, "Well, you've reviewed all of his books but one; you may as well do it." So, I borrowed the book from a friend.I wish I had read it sooner. Little effect. Much as I enjoy Ken Fisher as a writer, and appreciate the interaction that I have had with him over the years, the title turned me away. Test the received wisdom to see if it is really true.
I also found his insights about how the yield curve affects style investing to be useful. Weak dollar. * What can you fathom that others find unfathomable. Look for unusual areas of competitive advantage that you have that are possessed by few. I enjoyed the book a lot, and would recommend it to my readers.QuibblesOccasionally, the book seems disjointed.
I resisted getting this book when it first came out. I do something like that through my industry rotation.Now, in the intermediate-run, most things that people are scared about don't affect the market much. Government deficits seem to be a positive for stocks in the short run. Little effect on stocks. The clever idea that you might discover is just one journal article away from an academic toiling in obscurity, but will go to a hedge fund two years from now.Patterns that work in one market should work in most markets. Ken Fisher is covering a lot of ground, and he takes a decent number of "side trips" to explain concepts. Only three.
The flip side of that is that the book covers many areas of the equity markets, and helps to explain what drives them.Now, sometimes I wonder if multivariate approaches might reveal different conclusions than what Ken Fisher comes to.Who would benefit from the book: Investors with moderate experience in investing who are finding the going harder than they expected. Your emotions will often lead you astray: look for opportunity amid fear; look for shelter amid wild abandon.Competitive advantage in investing is an elusive thing. If your discovery seems to work in most places, it might work well, until it is discovered and used heavily.I found a number of insights useful. This book debunks a number of common worries, though I would say that if the problem got significantly bigger, perhaps the result would be different.Ken Fisher offers what I would deem to be good advice on Asset Allocation, and how to make sell decisions, amid many other issues. This book will help them take a step back, and think twice about investment decisions.
This book will help the novices from stepping in a few potholes and also should help the professional turn over a new leaf or two. This should provide you, the investor, a slight advantage over the market.
However, that was my loss as the title hides more than what is inside and what the book and author provides the reader. On the whole, the author turns conventional wisdom on its head then left and right throughout the text.
I was late reading this book as it has already been out a few years. Broken down to its core, the author's recommendation and advice is to adopt a benchmark, preferably global, and overweight or underweight it when asking the three questions while avoiding the financial myths.
If you have been investing for sometime, then you may already know some of the falsehoods that Wall Street and your broker preaches. Irrespective or even if you are aware of the falsehoods, there are many that I am of the belief you will not know about and recommend reading Ken Fisher's fine book.I kept this review short as there are plenty of other fine reviews available, but this book will indeed expand or help improve on your investment insights.
Though it sounds very simple, we know the market is the great discounter and loves confusing both novices and professionals. Enjoy :)
I highly recommend it to individual investors.- Mariusz Skonieczny, author of Why Are We So Clueless about the Stock Market. Did we check it ourselves.
The author really made me think hard about what I know and what I think I know. When I started reading this book, I did not enjoy it, but after the preface and introduction, I could not put it down.
But is it really true. The first question that counts is what do I believe that is actually false.We are bombarded by all kinds of theories on TV that we take at face value.
For example, the experts say that a weak dollar is bad for the stock market. This book makes investors think for themselves instead of relying on the so-called experts featured on TV.
Learn how to invest your money, how to pick stocks, and how to make money in the stock market
I had written a review with the same title and rating as this two weeks ago. It got published and soon had been removed. I think it's because I had challenged the actual performance of the author during the financial tsunami and so.In short, interesting with plenty of philosophical and anthological questions, but dont expect to improve your trading/investing performance by reading it.
Because short interest rates are set by the monopolies, but long rates by the free market. For someone who claims (rightly so) that he would under no circumstances work for the government, a curious claim.I agree that deficits are great for stocks, because it means tons of inflation and as people run way from the tsunami of cash and credit, stocks are a grateful recipient. The new borrower gets a claim on goods, but the lender does not forfeit a claim on goods. This is explained buy the Austrian theory of the business cycle.gold historic low returns: This just depends on what time frame you take. This is outdated. Any benchmark of long term real yields should be around 0%.leverage national debt:You say that the national debt is low, because everyone should strive for a debt level that holds the cost of borrowing equal to the yield on assets. You could only say that it was voluntary if the government gave the Chinese their money back and they went out and bought T-bills again.borrowing to heroine addicts/government:You claim this is a minor loss, since only the first time it is spend unproductively, but the subsequent times it is spent productively. As soon as it takes more than 1 barrel of oil to extract 1 barrel of oil out of the ground, oil winning will stop, no matter what the price.Inflation:You claim gold is not a good indicator of inflation and long bond yields are.
oil and stock market are correlated. I would say that countries do not buy, they are just a piece of land. This means in the end everyone thinks they have a claim on goods and prices go up. The Chinese government harvested the productivity of the Chinese people by printing 20% more money every year and thus amassing 2 trillion dollars without doing any productive work for it. Your challenge at the end of the book asks for data backed up claims.
I just listened to the audio book and since it had an invitation at the end: 'prove me wrong', I'll give it a go, although not before mentioning I agree with most of it. I will not use data but logic in my objections.Oil:You claim that oil will be obtained from shale oil if only the price gets high enough, because it is just a matter of price. That would be like saying: "I can leverage up because my neighbor makes a lot of money". The borrowing from central banks is therefore not real borrowing. You also speak of a disciplined FED, can I assume you take that back with current developments. The FED recently bought 300 billion long bonds and all kinds of toxic debt.
Foreign governments buy these assets and this is by definition not voluntary. Does this not mean longer interest rates are no longer a good indicator of price rises. I would contest that past correlation can tell you something with certainty about future correlation. Money is just a claim on goods. No venture/real estate survives a period like that. If you had to transfer wealth over a period of 2000 years, gold would the only way. current account deficit: Foreign countries voluntary buy our assets because of superior returns. It assumes that the government can freely confiscate the income of its subjects.
But again, if everyone would do that, it would lead to a logical contradiction, because for every borrower there needs to be a saver. Also with the warning I am not an economist, but that might also be a recommendation.My objections are more philosophical than data mined.-You claim truth about reality can be found by calculating r squared coefficients to see if e.g. This does not demonstrate the power of compound interest, but the absurdity of 4% real rates over longer periods of time, since many time the price of a load of bread was invested in the year 1009, but the total wealth of the planet does not equal 107979 trillion euro. A single euro invested in the year 1009, would at 4% interest rates be worth 107979 trillion euros today.
They forfeit consumption and I get it. Not everyone can be borrowed up, from whom would they borrow. But also, if I borrow a bottle of milk from the neighbors, they have to save a bottle of milk. I object because you can also calculate the price of getting a barrel of oil out of the ground in terms of barrels of oil. You derive what the government can borrow based on what the people earn.
Governments are coercive, so it cannot be said that a Chinese factory worker voluntarily chooses to put his savings in T-bills. Recent developments have shed a different light on the risks of borrowing to risky borrowers. Not at least if you hold that money is a claim on goods, and borrowing/lending is a temporary transfer for that claim.What's more, you conflate government and the people. Stocks have to compete for our attention (seduce us), while dollars/euros are an enforced monopoly (it is bullied upon us) and can thus be of lower quality, since you have no choice other than to use it.
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