The Indomitable Investor E-Book

Steven M. Sears

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 403

Veröffentlichungsjahr: 2012

Beschreibung

A new approach to investing based on how Wall Street insiders approach the market The Indomitable Investor deconstructs the stock market as the public has come to know it and reconstitutes it from the inside out from the perspective of the fortunate few who dominate Wall Street. By revealing how top investors and traders think and act Steven Sears shows the stock market to be an undulating ocean of money, with seasoned investors reading the waves others cannot. Teaching readers to think about the market in radically different ways, The Indomitable Investor shows how to improve returns--and, just as importantly, avoid losses--with disciplines deployed by people who almost always do exactly the opposite of what Wall Street says to do. Laying bare great fallacies, the book explains that non-professional investors wrongly think the stock market is a place to make money, which is what Wall Street wants them to try to do. The Indomitable Investor says otherwise and shows how Wall Street's best investors have a completely different focus. * Explains the critical ideas and insights of top traders and investors in language anyone can understand and implement * Packed with material rarely shared off Wall Street that is used every day by professional investors * Introduces the 17 most important words on Wall Street * Teaches critical skills, including: How to increase returns by focusing on risk, not potential profits; how to use the stock market's historical patterns to optimize investment decisions; understanding key relationships between stocks and the economy that predict what will happen to stocks and the broader market; how to increase mutual fund returns with an easy adjustment that redirects the bulk of profits to you--not mutual fund companies, and how to analyze information like seasoned investors to move beyond "statement of the obvious" news reports that turn ordinary investors into Dumb Money Accessible to readers of all backgrounds, including those with a limited understanding of investing, The Indomitable Investor will change how investors view the stock market, Wall Street, and themselves.

Leseprobe

Contents

Preface

Chapter 1: Risk

A Nation of Stock Market Junkies

Calm Words for Wild Times

Notes

Chapter 2: Greed

The Hardest Decision

The Iron Man

Atlas Doesn’t Shrug

The Warrior Philosopher

Like Monkeys at the Zoo

A Context

The Danger of Warren Buffett

The Value of Errors

Notes

Chapter 3: Fear

The Theory of Contrary Opinion

Exile on Wall Street

The Media Is the Message

Media Misreads Google

Paulson’s Gamble

Buffett’s Goldman Trade

Fading the News

Notes

Chapter 4: The Anatomy of Information

The Doors of Perception

Anatomy of Information

The Future Is Now

Show Business

Words Are Weapons

Trust, but Verify

Notes

Chapter 5: Chaos

Money Never Sleeps

Perversities

The Black Swan’s Calling Card

Map of the Market

Don’t Get Skewed

Apathy and Fear Are Your Friend

Fear Not Black Swans

Is MPT MIA or KIA?

800 Years of Crisis

Fear Gray Swans

Notes

Chapter 6: Diogenes’ Lantern

Performance Is Relative

Death by a Thousand Fees

Stockbroker Pay

Hidden Fees

Beware of New Products

An Uncomfortable Conversation

A Funny Aside

Suitability Requirement

Fiduciary Standard

Shakespeare’s Rule

Appeals to Common Sense

Trust but Verify

Active versus Passive Fund Management

Notes

Chapter 7: Cycles

The Year in Stocks

Mysterious Repetitions

Flash Mobs

History’s Hiccups

The Economy in Slow Motion

The Guts of ISM

Numerical Nuances

Says Who? Says Goldman Sachs

Action

Notes

Chapter 8: Behavior

One Brain: Two Minds

Maps and Models

This Is Your Brain Visualizing Money

Compulsive Gambler

B. F. Skinner Goes to Wall Street

The Casino Culture

Your Own Private Stock Market

Often Wrong; Never in Doubt

Illusion of Memory

Safe Havens in the Age of Madoff

Illusions

Victor

An Antidote for Overconfidence

Go Slow to Go Fast

Think Week

Halos and Angels

Big Brother Is Studying You

Big Bank Is Watching You

Ancient Lessons

Notes

Chapter 9: Watchman, What of the Night?

The Next Crash

Misperceptions and Illusions

Revolving Doors

Investor Laureate

A Fox in the Henhouse

The Tremendous Task

Sane Money, Not Mad Money

Repetition and Velocity

More Education

Plain Speaking

The Cause of Failure

Virtue

Ladders

A Systematic Change

Flash Crash

Soft Spots

Washington

A Global Problem

Present at the Creation

The Illusion of Regulation

Power

The Balance of Power

Notes

Acknowledgments

About the Author

Index

End User License Agreement

List of Tables

Table 2.1 Long-Term Returns (annualized, in percent)

Table 9.1 Poor Man’s Guide to Market Assessment

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Guide

Cover

Table of Contents

Begin Reading

The Indomitable Investor

Why a Few Succeed in the Stock Market When Everyone Else Fails

Steven M. Sears

Cover Design: Wiley

Cover Illustration: © CSA Images/Archive/Getty Images

Copyright © 2012 by Steven M. Sears. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

Published simultaneously in Canada.

No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, [phone], fax [phone], or on the Web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, [phone], fax [phone], or online at http://www.wiley.com/go/permissions.

Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

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Library of Congress Cataloging-in-Publication Data:

Sears, Steven M.

The Indomitable investor : why a few succeed in the stock market when everyone else fails/Steven M. Sears.

p. cm.

Includes bibliographical references and index.

ISBN 978-1-118-93404-3 (paper); ISBN 978-1-118-22433-5 (ebk);

ISBN 978-1-118-23739-7 (ebk); ISBN 978-1-118-26239-9 (ebk)

1. Stocks. 2. Risk management. 3. Speculation. 4. Portfolio management. I. Title.

HG4661.S36 2012

332.63'22—dc23

2012004096

For Kitya,Onward, to Ithaca

Preface

My working title for this book was A Self-Defense Manual for Investors. For whatever reason, no one liked the title but me. So I changed it, but not my intent to give people a book they could use to protect themselves from the wrong side of Wall Street and to alter the odds of investing success. Since my book was first published, the need for investors to be more than a member of Wall Street’s herd of sheeple has increased exponentially.

The world is now gripped by the realization that the financial crisis widened the gap between the haves and have-nots, perhaps permanently, in ways rarely seen throughout history. Income disparity, which typically is the stuff economists research and write about in arcane financial journals, is now the stuff of best-selling books. The world’s major cities have become battlegrounds where the wealthiest fight for bragging rights to buy the most expensive real estate.

The first great financial crisis of the twenty-first century also spawned a potentially more pernicious phenomenon: a financial knowledge gap that may prove more destructive than the traditional gap between socioeconomic classes. This knowledge gap threatens to widen further as aspects of modern life become so complicated and specialized that fewer and fewer people have the requisite skills to compete. It is no overstatement to say this is an issue of national importance, as more of us must rely on financial markets to fund our retirement. Failure to address this financial knowledge gap may weaken the rungs of a ladder so many have climbed to improve their own and their families’ lives.