Book Reviews

100 Baggers

224 Pages, Paperback £7.42 This is a book on those companies that have returned more than 100 times the original investment cost to shareholders. Having got some 10-baggers in my portfolio, and with the summer lull in business and the markets, I was interested in reading how to spot the ones that could generate an even bigger return. The author credits a book by Thomas Phelps called “100 to 1 in the Stock Market” first published in 1972 as the inspiration for his ...

A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing

496 pages, Paperback from £13.12, Hardcover from £22 (Amazon) A recent report by the Chartered Financial Analyst Society (CFA UK) suggested that institutional investors need to heed the lessons of history more. Particularly the regular problems of “liquidity, investor psychology and regulatory failure” with the associated booms and busts. Well, they could do very well to begin their education by reading this book. First published in 1973, and regularly updated since, Professor Burton G. Malkiel is an academic at Princeton University who also ...

Back from the Brink

368 pages, Paperback £4.48, Hardcover £19.99, Kindle £4.26 (Amazon) There is often a debate in historical circles about the relative impact of individuals and their personalities on world events, in comparison with socioeconomic trends. After reading this book I came to the conclusion that in terms of the recent financial crisis, individuals (including Alistair Darling) had a large impact on what happened. The book is in essence a diary of the events between 2007 and 2010 when Darling was Chancellor of the Exchequer ...

Baruch – My Own Story

340 pages, Hardcover £15.16, Paperback £16.99 Someone on Twitter recently mentioned Bernard Baruch as a legendary investor. I have just read his autobiography which is entitled “Baruch – My Own Story” and it is indeed interesting for several reasons. Firstly he had a long life and the book covers the period from the American civil war until the 1960s. So it covers more than one period of financial crisis such as the 1929 Wall Street crash and two World Wars. Baruch’s father was a ...

Berkshire Beyond Buffett

334 pages, Paperback £14.99, Kindle £11.99 (Amazon) This book attempts to answer two questions apparently: 1) what is the reason for the success of Berkshire Hathaway and its Chairman Warren Buffett; and 2) will Berkshire survive the death or retirement of Warren Buffett. With Buffett now being aged 80, and his close associate, Charlie Munger, being 90, these are indeed pertinent questions. You probably don't need to be told that Buffett has been one of the most successful stock market investors in the last ...

Better Value Investing: Improve your results as a value investor

174 pages. Paperback £22.94, Kindle £21.79. An investment manager at Baillie Gifford, Andrew Hunt’s book covers value investing from share selection to portfolio construction, and much in between. He starts with “Value investing 101” and the worlds of Benjamin Graham, Warren Buffett and James Montier – involving margins of safety, patience, the “fat pitch” and dealing with Mr Market. He then discusses how to improve the approach, emphasising an understanding of a company’s financial strength, its degree of focus on shareholder value and of ...

Black Horse Ride: The Inside Story of Lloyds and the Banking Crisis

448 pages, Paperback £10.99, Kindle £5.03 (Amazon) Many private investors lost a great deal of money on their investments in banks during the banking crisis of 2008 and subsequent years. Anyone who did will find this book an interesting read. It claims to be the "inside story of Lloyds and the banking crisis" and is based on extensive interviews with the major personalities involved. That includes the Chairman of Lloyds TSB at the time, Sir Victor Blank, and Chief Executive Eric Daniels. Indeed this ...

Business Perspective Investing – Why Financial Numbers Are Not Important When Picking Shares

Roger Lawson, is an active private investor who has made important contributions to the cause of private investment through his involvement with both UKSA and ShareSoc.  He is also pugnacious, stubbornly pursuing a good number of important campaigns over the years, including on the disenfranchisement of investors in nominee accounts and on the failures at RBOS, Lloyds Bank and others.  He writes interesting and topical blogs (https://roliscon.blog*) on investment matters and is himself a successful investor. All this means that he ...

Business Perspective Investing – Why Financial Numbers Are Not Important When Picking Shares

153 pages. Paperback £13.25, Kindle £9.95. Roger Lawson has recently published a new book, Business Perspective Investing - Why Financial Numbers Are Not Important When Picking Shares. In it, he argues that financial ratios are not the most important thing to look at when selecting shares for investment.  More information on the book is available at https://www.roliscon.com/business-perspective-investing.html There are some principles explained in that book that helped Roger to avoid investing in Burford, in Quindell, in Carillion, in Silverdell and many other businesses with dubious ...

Cotter On Investing: Taking the bull out of the markets: practical advice and tips from an experienced investor

208 pages, Paperback £19.99, Kindle £17.09 (Amazon) John Cotter has worked for Barclays Stockbrokers for many years, writing the popular “Cotter’s Corner” column on its website as well as speaking at client seminars. The book focuses on topics that Cotter finds private investors are interested in, and contains a wealth of sensible ideas meeting his “3 box test” (that they’re simple, makes sense and work). His main investment tools for generating ideas or checking value are the PE ratio, PEGs (to achieve growth at ...

Debtonator: How Debt Favours the Few and Equity Can Work For All of Us

Amazon hardback £7.03, Kindle £5.63. Now here’s a book well worth reading on your summer holidays. It’s called Debtonator by Andrew McNally. Indeed if you are taking a long-haul flight to your holiday destination, you might be able to read it in one sitting. Like all good books it is short at only 98 pages excluding notes and index, and the format is small as well. But there is an enormous amount of information embodied in there. It covers the problems caused by ...

Double Entry: How the Merchants of Venice Created Modern Finance

304 pages, Paperback £8.99, Kindle £4.38 (Amazon) Back in the Thirteenth Century, when Venice ruled the waves, we can find the origins of modern capitalism. Back then the portents were vague, but the invention of bookkeeping and the introduction of Arabic numerals foreshadowed a revolution based on the stunningly original idea of being able to figure out whether or not your business was making a profit. Roll forward six hundred years and we find that those inventions, suitably adapted, have not just stood ...

Effective Investing: A simple way to build wealth by investing in funds.

272 pages, Paperback £15.98, Kindle £11.69. Mark Dampier leads the funds research team at Hargreaves Lansdown, which has grown over the past thirty years to become the UK’s leading investment supermarket for private investors, entrusted with over £55 billion by over 700,000 clients and becoming an FTSE 100 company in the process. The book is a worthwhile read with a nice conversational style. His theme is that investment platforms make it easier for the private investor to manage his or her money, that funds are ...

Exchange Traded Funds: A Concise Guide to ETFs

Harriman House, £20.99 from the publisher (RRP £34.99). This is another of Harriman House's admirably clear guides for investors, written in this case by a financial editor on the latest generation of collective investments exchange traded index trackers. The first part of the book describes how ETFs work and puts their development into historic context. Their rapid growth (now over $1,000 billion worldwide) reflects their efficient tracking of indices, their liquidity and their low cost and their significant tax advantages in the US. Whilst positioned ...

Fear and Greed: Investment risks and opportunities in a turbulent world

240 pages, Hardcover £19.99, Kindle £17.99 (Amazon) This book is effectively a series of essays that use recent history to comment on current investment topics or to tease out investment principles, by a former Goldman Sachs VP who now runs an investment advisory business. The overall theme is that recent events have heightened investment risks but also the oppor- tunities open to alert investors. The first half is concerned with a number of specific investment themes (the cult of the equity in a ...

Financial Statement Analysis & Security Evaluation

800 pages. Paperback from £3.71, Hardcover from £8.87 (Amazon) I found a rather battered copy of the 2001 edition of this book on a charity bookstall a few months ago, and a quick flick though was enough to suggest the 50 pence asking price would be a good investment. It certainly was. If, like me, you have read Graham & Dodd’s “Security Analysis”, and thought “This is all very inspiring, but just how do I do it?” this book could be for ...

Harriman’s New Book of Investing Rules: The Do’s and Don’ts of the World’s Best Investors

518 pages. £19.99, Amazon from £16.88, Kindle £12.99. This is an updated compendium of investing rules from over 60 mainly UK and US professional investors. With so many contributors, many of the “rules” naturally contradict each other – for example, stockpickers’ recommendations of running concentrated and directly-invested portfolios (to avoid “diworsification”) conflicting with the index trackers counselling the use of ETFs and diversification (John Bogle’s advice here: “Buy the haystack”). I particularly liked the contributions from Frank Armstrong, a former US fighter pilot ...

How to Make a Million – Slowly

168 pages, Hardcover £15.17, Kindle £9.72 (Amazon) John Lee (Lord Lee of Trafford) has had an interesting career as a businessman and politician, but "How to Make a Million - Slowly" is a book that explains how he became an ISA millionaire. In fact, it states that he managed to do so by 2003 which must make him one of the most successful investors in the UK. Like many investment books though, it gives you hints as to how he managed to achieve ...

How to value shares and outperform the market: A simple, new and effective approach to value investing

288 pages, Paperback £16.64, Kindle £15.94 (Amazon) Glenn Martin, who has a background in investing and IT, developed his Share- Maestro stock market valuation system in the mid-1990s, packaging and marketing it from 2007 after backtesting and looking at its performance through several booms and busts. This book is a detailed description of the system and how it can be used by private investors, as well as providing wise words on investment objectives, risk controls, tax-free investing etc. Investors who want to ...

Inflation Tax: The Plan to Deal with the Debts

222 pages, Paperback £6.74, Kindle £5.81 (Amazon) Peter Comley previously published a book entitled “Monkey with a pin” that explained why the returns from stock market investment, for the typical retail investor, are never as good as you might expect. Indeed that book was highly recommended and is in our “Recommended Reading List”. One point made in that book is that investing in cash deposits might not be such a bad idea in comparison with the returns obtained by many investors in ...

Keep Calm and Carry On: Good Advice for Hard Times

160 pages, Paperback from £7.34 This month we don't have a review of a weighty tome on stock market investment, but one more in tune with the public mood and recent events. Keep Calm and Carry On, subtitled "Good Advice for Hard Times" is simply a compendium of sayings to reinforce a stoic attitude, or lift your spirits. It has sections on Economists, Speculation, The Crunch, Big Business, Banking, Money and Debt, so it is ideal for the stock market investor when you are ...

Monkey With A Pin

278 pages, Paperback £16.77, Kindle £1.99 (Amazon) Monkey with a Pin is subtitled “Why you may be missing 6% a year from your investment returns”. It tries to explain why a monkey sticking a pin in a list of shares can create a portfolio that will typically outperform almost all professional fund managers – and indeed most private investors. This issue has been demonstrated in more than one experiment, both by academics and others, so getting some understanding of why is quite ...

Other People’s Money

352 pages, Hardcover £3.89, Paperback £3.10. Professor John Kay is one of the brightest minds in the financial world, as anyone who reads his regular column in the Financial Times will be aware. He also authored the Kay Review of Equity Markets for the Government, and in addition unlike most academic economists also has experience of being a director of public companies. This gives him a breadth of experience and knowledge that is difficult to match. His latest book, entitled "Other People's Money" ...

Picking Winning Shares: Simple Ways for the intelligent investor to combine fundamental and technical analysis to pick winners

186 pages, Paperback £12.99 (Amazon) Like many successful private investors, he has found a niche in his case, it's using the excellent charting and fundamental data available in ShareScope to identify and then buy and sell out of favour, depressed and low-priced shares. The book covers a lot of ground, but his chapters are generally relevant, short and sensible. His buying methodology using price and fundamental filters to produce and then monitor a watchlist is equally sensible, and not prescriptive, emphasising that investors need ...

Professional Investor Rules: Top investors reveal the secrets of their success

218 pages, Hardcover £9.01, Kindle £8.89 (Amazon) Most private investors have developed their own investment rules or prejudices, often at considerable cost. This book is a collection of rules from 24 professional investors from a mix of well and lesser-known fund managers. It is a collection of maxims rather than a guide to investing. Perhaps chiming with my own prejudices, I particularly liked the pieces by Sebastian Lyon and colleagues (“avoid highly geared companies”), William Bernstein (“if you want excitement, take up sky-diving”), ...

Selecting Shares That Perform: 10 Ways to Beat the Stock Market

320 pages, Paperback £21.99 (Amazon) This book was originally written by Richard Koch and published in 1994. It was updated in 2009 when Leo Gough was added to the authors. The first few sections of the book give some general background on the stock market, the problem of volatility and what advantages individual investors might have. The chapter on “Rules to stop you losing” is particularly good and useful for the inexperienced investor. Here are some of them: “Never buy on tips”, “Do not ...

Shares made simple: A beginner’s guide to the stock market

230 pages, Paperback £12.80, Kindle £9.77 (Amazon) This is an updated introduction (in a Revised 2nd edition) to stock market investing, squarely aimed at beginners. It covers what shares are, how the stock market operates, company assessment, how to choose investments and to go about investing, as well as charting and takeovers. The book is clearly laid out and has some useful case studies, although the discussion on what makes for a successful investment is thin and there is less reference to the ...

Shredded

480 pages, Paperback £10.65, Kindle £6,64 (Amazon) This book is a comprehensive and accurate history of what went wrong at the Royal Bank of Scotland (RBS) - the largest bank in the world at one point. The title is taken from the nickname of the former CEO Fred Goodwin, otherwise known as "Fred the Shred". There is little to fault in this book, other than it is too long at over 500 pages. It's certainly worth reading if you lost money from investing ...

Simple But Not Easy: An Autobiographical and Biased Book about Investing by Richard Oldfield

220 pages, Hardcover £7.32, Kindle £8.84 (Amazon) Richard Oldfield joined Warburgs in 1977, becoming a fund manager and director of Mercury Asset Management before moving to advise a European family’s investment office. He now chairs the investment committee of Oxford University. Oldfield is, therefore, poacher turned gamekeeper in the world of professional fund management, and the book is perhaps of most relevance to trustees or members of investment committees charged with an overview of investment strategy and dealing with fund managers. It will ...

Superinvestors: Lessons from the greatest investors in history, from Jesse Livermore to Warren Buffett & beyond

243 pages. £24.99, Amazon from £14.17, Kindle £15.59. He writes with a light style so it’s an easy read – eight to ten pages on each of his chosen investors, some with familiar names (Warren Buffett, Anthony Bolton, Nick Train) but others much less so, to the UK reader at least – Georges Doriot (venture capital pioneer), Robert Wilson (early short seller), Edward Thorp (early quant), Jack Bogle (pioneer index investor). Each chapter has a brief biography which includes a note on ...

Tap Dancing to Work

384 pages, Paperback £7.34, Kindle £4.99 (Amazon). Warren Buffett has an unbeatable track record as a long-term investor. Indeed his record is so good that people claim it as evidence that there are inefficiencies in the market that can be exploited by experts (when most investors clearly perform no better than chance). As a result, there have been many popular books covering his background and investment style. The latest is from Carol Loomis, a writer for Fortune magazine, and has just been ...

The Art of Execution: How the world’s best investors get it wrong and still make millions.

208 pages. Amazon paperback £14.34, Kindle £9.09. I am an avid reader of newsletters and the national press on investment matters and noticed a couple of writers recently mentioned very positively the book “The Art of Execution” by Lee Freeman-Shor. I have now read it myself and it’s definitely a book every stock market investor should read. Here’s why: There are thousands of books available on investment, aimed at both neophyte and experienced investors. They tend to fall into two main groups: those ...

The Clash of the Cultures

384 pages, Hardcover £22.99, Kindle £17.09 (Amazon) ShareSoc published a review of John Bogle’s previous book (“Don’t Count on It!”) in our May 2011 edition. It was a very positive review and the book was added to our Recommended Reading List. John Bogle was the founder of Vanguard and is a keen promoter of low cost, index-tracking funds which he did a lot to establish in the USA. His latest book is about “investment versus speculation” and again is well worth reading. It ...

The Deals of Warren Buffett – Volume 1: The First $100m

242 pages. £25, Amazon from £16.97, Kindle £15.60. The book covers the period from 1941, when the 11-year old Buffett bought 3 shares in Cities Service Preferred for himself and his sister with some $120 saved from paper rounds and reselling lost golf balls, up to 1978, by when the 48-year old Buffett had achieved personal net worth of $100m. After an initial scene-setting chapter, the book looks at some 22 of the deals that helped get him there, with the lessons ...

The Defensive Value Investor

304 pages, Paperback £19.49, Kindle £14.94 This recently published book is by John Kingham who also publishes a newsletter, and a blog (see www.ukvalueinvestor.com). John is an experienced private investor and he has developed a certain style which is different to many others you might come across. In essence, and as the title of the book suggests, he takes a very conservative approach to investing based on a very thorough financial analysis of companies over the long term. That means over 10 years ...

The Dividend Investor: How to Maximise Your Income by Investing in Shares

298 pages, Paperback £17.99, Kindle £10.40 (Amazon) This is an introduction to building a stock market portfolio so as to produce a steady and rising income, by an experienced financial journalist and author. It's topical - whilst dividends are a key part of most investment strategies, their importance may increase if growth becomes harder to find in future. The first part of the book deals with dividend basics, including sources of investment information, followed by a section on analysing companies to find those ...

The DIY Investor: How to get started in investing and plan for a financially secure future.

275 pages. £17.99, Amazon from £9.85, Kindle £12.83. This is the updated, second edition of a very useful and clearly written book, providing detailed guidance for “people who want to invest for the future and then get on with the rest of their lives”, his thesis being that the investment platforms and range of products and information now available means that financial advice is a luxury that only the wealthy can afford. The first section of the book introduces DIY investing, including ways ...

The Financial Times Guide to Investment Trusts

168 pages, Paperback £23.99, Kindle £17.84 (Amazon) This book is one of the series of Financial Times Guides and is authored by John Baron who writes a regular column for the Investors Chronicle where he runs a portfolio of such companies. It was first published in 2013 so is quite up to date on the latest legal and other aspects of these trusts. For those unfamiliar with investment trusts, the book provides a very good introduction but also contains useful information for those ...

The Little Book of Behavioural Investing

236 pages, Paperback from £7.34 (Amazon), £13.29 (Kindle) This very readable book is packed with examples of how easily we let our innate tendencies mislead us in investing, as well as with suggestions for overcoming them. The enemy in investing is specifically the parts of the brain known as the amygdala, the “reptilian” brain stem that allows us to react without thinking when a snake strikes at us. Montier calls this part of the brain the X-system - this is the “fear and ...

The Little Book that Beats the Market

208 pages, Hardcover £12.99, Kindle £10.44 (Amazon) This book was first published in 2005, but it was updated in 2010. It has been one of the best selling investment books ever since. Why? Perhaps because it has a catchy title, but also probably because it claims to offer a straightforward formula that any simpleton can follow to “beat the market”, i.e. outperform the main market indices over several years. It’s worth pointing out immediately that Mr Greenblatt does not claim to outperform every year, ...

The Long and Short of It

304 pages, Paperback £9.18, Kindle £5.03 (Amazon) The author of this book is one of Britain’s leading economists – an academic but with hands-on investment experience who also writes regularly for the Financial Times. He is, of course, leading the “Kay Review” of the UK stock market as instituted by the Government. This book was published in 2009 and is subtitled “A guide to finance and investment for normally intelligent people who aren’t in the industry” so it covers a broad field ...

The Millionaire Next Door

272 pages, Paperback £1.30, Hardcover £18.43 (Amazon) This fascinating book is a study of Ameri- can millionaires and their habits with a number of important points for all people trying to accumulate personal wealth. Early in the book, the authors make a distinction between PAWs and UAWs, being Prodigious Accumulators of Wealth and Under Accumulators of Wealth. Note these terms; they are used throughout. An early point made is that most millionaires are first-generation rich. Future generations are heavily disadvantaged by gifts of ...

The New Few: Or a Very British Oligarchy

320 pages, Paperback £7.99, Kindle 6.49 (Amazon) This book by a former political journalist covers the rise of the oligarchs in Britain. In other words the increasing wealth and influence of a small minority in all walks of life. This affects not just the business arena, which is the area covered in the first few chapters which may be of greatest interest to our readers, but also the political arena. So it is the rule of the few over the many, and how ...

The Rational Optimist

448 pages, Paperback £9.99 (Amazon) Why review this book which has been recently published. Surely it’s a bit off the investment scene? Well apart from the fact that the forecast for world economic growth the author foresees should give us all bumper stock market returns going forward, he was also the former Chairman of Northern Rock (he seems not to mention that these days and has even dropped his title of “Dr” from the book sleeve). Let me say first this is the ...

The Search for Income: An Investor’s Guide to Income-Paying Investments

Paperback £11.39, Kindle £11.04 (Amazon) Maike Currie, an editor on personal finance for the Investor Chronicle, has produced a clearly written and comprehensive guide to the main sources of income open to UK private investors. The book has three sections. The first (mercifully short) deals with “what is income” and simple financial arithmetic. A much longer second section looks at the major income-yielding investment classes (gilts, bonds, equities, funds, property and alternative assets). These are each dealt with carefully, with useful descriptions and ...

The Stock Picker – A financial history from the sharp end

312 pages, Paperback £14.99, Kindle £14.24 Paul Mumford has over 50 years’ investment experience, running funds since 1988 (he manages the UK-focused Cavendish AIM, Opportunities and Select Funds). It’s an unexpected book, effectively a personal and investment biography rather than a “how-to” manual, covering the twists and turns of the market and of sectors and companies within in it over a long career. He touches on rather than detailing his investment processes. Schoolboy amateur bookmaking drilled into him the importance of research and careful ...

The UK Trader’s Bible: The Complete Guide to Trading the UK Stock Market

368 pages, Paperback £29.95, Kindle 17.54 (Amazon) This book gives you a lot of detailed technical information about how the UK stock markets operate, so the title might be somewhat misleading because it’s also a very good education for those who invest in the medium to long-term. Published in 2005 (and possibly due for an update therefore although little seems to have changed since), it does also cover short-term trading strategies and techniques. Even long-term investors might wish to learn what they might ...

What They Do With Your Money

256 pages, Hardcover £17.77, Kindle £18.57 This book attempts to explain how and why the modern financial system fails investors. Particularly those who invest via mutual funds, pensions or other collective investment schemes. At that, it does a very good job. It also tackles the issues arising from poor corporate governance and the "agency" problem where the managers of companies and the funds that invest in them act in their interests and not yours. It covers both the US and European scenes and commences ...

What Works on Wall Street

704 pages, Hardcover £25.99, Kindle £23.74 What Works on Wall Street was first published in 1997 but has been revised several times - this review is of the 4th edition. It attempts to demonstrate that there are some characteristics of listed companies that are good predictors of subsequent investment returns. In addition that those factors have long-term persistence as good predictors - and the data analysed goes back as far as 1927. In effect, the author shows that the theories that stock prices move ...

You say Tomayto: Contrarian investing in bite-size pieces

210 pages, Hardcover £16.99, Kindle £14.99 (Amazon) Alastair Mundy has headed the Contrarian Investment team at Investec Asset Management for ten years, managing its UK and Global Special Situations and other funds. This book is a collection of his monthly investment commentaries over the last few years. Effectively – and to the apparent despair of his marketing department – these are thought pieces that have helped him make sense of the welter of material that has faced him, and which faces all ...

Yummi Yoghurt

35 pages. Hardcover £10, Kindle £4.31. Stumped for what to buy for that precocious teenager in your family? Look no further than John Lee's accessible primer for first-time stock market investors. John, a leading private investor, the first ISA millionaire and official Patron of ShareSoc, takes his young readers on a journey, following the evolution of fictional Yummi Yoghurt from a small family business to a company with multiple factories and global sales.   The book follows three strands: the evolution of Yummi Yoghurt, ...