Wednesday, June 06, 2007

Book Review: Investment Titans

Jonathan Burton's Investment Titans does a really great job covering some of the smartest minds in the investment community. Each chapter in the book is dedicated to a well known investor and articulates that investor's particular niche. While I have taken an extensive portfolio management course at my university, the book still managed to share many unique strategies that I had never heard of!

Overview: I almost guarantee that everyone will learn something new after reading this book. I found myself skimming over the first two chapters because I already new about the Capital Asset Pricing model and using the Long and Hold investment strategy, but I was really interested in Jeremy Siegel's argument about Equity Premium. Readers will also get a heavy dose of index fund praise and asset allocation. In short, the book covers everything an intermediate investor should know when investing.

Personal Takeaways: I thought I would simply share some passages to cover my takeaways
  • "Bonds and cash simple don't retain their purchasing power once inflation takes its toll."
  • "... asking whether you should keep a stock... is whether you'd be willing to buy it."
  • "Behaviorists combine psychology and finance - contending that preconceptions and cognitive errors lead investors to misinterpret events and to overlook opportunities."
  • "Value stocks around earnings announcements outperform growth stocks... by four percent."
  • "The better an investment has treated you, the more you should think about distancing yourself. The stock doesn't know you own it. It owes you nothing."
I recommend investors of all skills levels at least flip through the chapters and find something new. Investment Titans has certainly given me a few tag lines to keep in mind when evaluating an investment and I am confident that the insights have contributed to my overall investor education.

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