want to learn about ten of the greatest investors and their market beating strategies all in one book? John Reese and Jack Forehand recently came out with a book titledThe Guru Investor that details how.
The book details ten different investors and their formulas for beating the market. the ten investors the book discusses are Benjamin Graham, Warren Buffett, John Neff, Peter Lynch, David Dreman, Joel Greenblatt, Ken Fisher, Martin Zwieg, James O’Shaughnessy, and Joseph Piotroski.
The book clearly has a value slant towards it. while some of the investors above are not value investors, the majority are. overall I enjoyed the book. while everyone above with the exception of Warren Buffett and Joseph Piotroski has written their own books, the authors did a good job summing up the various investors’ investment ideas.
Even though I have read many books from the investors above, I have not read most of these books recently. Reese and Forehand do a good job summing up their ideas and reminding of some of the details I had forgotten.
In addition, I have not read any books by Ken Fisher, Martin Zweig and James O’Shaughnessy. I do not really consider their investment style one I would consider incorporating. Despite this fact I still found it interesting to read about their investment approaches even if it is one I would personally not pursue.
To be honest this book would not be so useful for more experienced investors. I assume most experienced value investors have read the books by the famous value investors the book discusses. in addition while Warren Buffett has not written a book there are countless excellent books that have been written about Warren Buffett and I assume experienced investors have read these books. for more experienced value investors the best chapter is the one on Joseph Piotroski. Joseph Piotroski is a value thinker who is relatively unknown to many. Piotroski has never authored a book on value investing. however, he has back tested a value strategy that produced a 23% per annum from 1976-1996.
However, I would consider this an excellent book for a new investor. It gives a novice investor some insight into value investing from some of the greatest investors ever. the authors write in a simple fashion and explain basic investment principles that most people would understand. in addition the authors provide some useful advice about how often to rebalance, when to sell and other important information that every investor must know.
I have two minor criticisms of the book. while the authors do a great job explaining the investment strategies of the gurus they discuss, they make it seem a bit too simple. I do not think any set formula was used by any investor besides Joel Greenblatt’s magic formula low earnings yield plus high returns on capital, and Benjamin Graham’s net-nets. I do not think most investors have a set formula, I believe they have a formula that guides them to the right pool of stocks, before they do much more extensive research. I believe especially in regards to Warren Buffett that no formula in the world can predict his stock picks. I believe he makes his decisions larger on a qualitative basis which cannot be measured by numbers.
My second criticism is the authors track the performance of model stock portfolios of the gurus they discuss in the book. however the years they cover are only 2003-mid 2008. not only was this a short time period but it was during a full bull market ( there was a bear market in late 2007-2008, however the data was compiled before late 2008 after Lehman Brothers collapsed when the market got crushed). I think two criteria need to be met to evaluate a strategy 1. A long time period i.e. 10 years 2. and for that time period to include both a bear and bull market. they should either have back-tested their data or left it out.
Notwithstanding these minor criticisms I still think it is a valuable read. It is good for a more experienced value investor who may have read a lot of the books by the gurus, but forgot many details and might want to review them in brief. however the book is excellent for the new investor. the Guru Investor will provide a novice a roadmap for how to get their feet wet in investing and value investing in particular.
To purchase the book on Amazon.com click on the following linkThe Guru Investor: how to Beat the Market Using History’s Best Investment Strategies
Disclosure: New FTC guidelines require me to disclose I have a material connection because I received a free copy of the book to review.
My investment ideas have been inspired by many of value investors including Benjamin Graham, Charles Royce, John Neff, Joel Greenblatt, Peter Lynch, Seth Klarman,Martin Whitman and Bruce Greenwald. .I live with my wife and daughter in Monsey, NY. I can be contacted jacobwolinsky(AT)gmail.com and my blog is valuewalk.com
Book Review: The Guru Investor by John Reese and Jack Forehand