Wealth Forever: The Analytics of Stock Markets
by admin / August 5th, 2010
Product Description
Text covers all aspects of the stock markets, including the basic tools that will enable the reader to understand the stock market basics, the history of the stock market performance in the US and overseas, the various ways to value stocks and assess their risk, and more. Hardcover, softcover listed in approval week 2003-49…. More >>
Wealth Forever: The Analytics of Stock Markets
August 6th, 2010 at 12:37 am
The book, Wealth Forever, is a landmark achievement that will greatly benefit all investors who read and apply its lessons. If you only read one book about stock market investing in your life, make it this one.
Wealth Forever is a one volume encyclopedia of historical data, equity market theories, and common sense about investing that will teach you about any fact or idea you need to know while giving you the framework to apply the learning to your own investments. The book is rigorous while remaining accessible. If you can understand simple algebraic equations, you can comprehend everything within its pages. The book’s many detailed footnotes will also lead you to other books and articles that display more on the same subject.
While each subject has to be highly condensed to get the essential points across, the authors did a marvelous job of being sure that important material was included. For instance, the discussions of the Capital Asset Pricing Model are preceded by stating the assumptions behind the model. Most people simply apply the model without realizing that its assumptions differ from the real world by a large degree.
In my consulting, I often work with the chief financial officers and treasurers for major companies. If you read this book, your understanding of the equity markets will exceed all but the most knowledgeable of those professionals. The reason I make that point is that there is a constant outpouring of new research testing theories about the equity markets. Most people simply apply what they learned in graduate school, and much of that information has now been disproved by more recent studies of the financial markets. Yet most people do not take the time to keep up-to-date.
I hope that this book will be universally adopted by corporate executives, professional and individual investors and by corporate finance students at both the undergraduate and graduate levels.
I only found two aspects of the book to be less than outstanding. First, a lot of the material in the first few chapters could probably have been better placed after chapter 10. It seems to be placing the cart before the horse to talk about opening brokerage accounts and how to read technical charts before describing the approach one should take with investing. Second, the book needed a little better proofreading. The obvious errors that remain undercut the book’s credibility. Although I did not check out all of the equations in detail, those did seem correct. Some of them, however, are annoyingly chopped up in the printing. It’s as though the equations were typed in one software format, and that format didn’t work well for the typesetting. In the text, Peter Lynch is described as Peter Finch in one place, and Procter & Gamble is consistently spelled as “Proctor & Gamble.” The time focus of the book’s narrative about the markets veers back and forth between 1999 and 2003 in the text. Some of the material about 1999 is written as though the book ended there.
One of my favorite aspects of the book is that one set of evidence is used to help the reader understand all of the evidence. For example, there’s a lengthy section looking at the apparent undervaluation of United Technologies that shows how one can assess such a subject, as well as the limitations of various stock valuation methods. Similarly, stock-trading strategies and their results are compared to index fund results so that readers can get a sense of the cost of information and trading compared to the benefits that can be achieved.
I came away, once again, confirmed in my view that index funds are a wonderful solution for almost all investors.
I was also reminded that we need to remain vigilant in being sure that our knowledge of important subjects is up-to-date. I hope the authors will bring out new editions of this book every five years or so.
Rating: 5 / 5
August 6th, 2010 at 2:55 am
I ordered this book along with about ten others on corporate finance, methods of valuation, and econometrics, and was shocked after finishing the first three chapters. This is, without a doubt, the worst -written book I have ever read. It’s practically unfathomable that they published it. First, a lot of the information is incorrect or presented in an oddly emotional, unprofessional, and biased way. As I was reading it, I kept thinking to myself that it was as though someone who knew nothing about finance tried to pretend they did and write a book about it (and I’m a relative novice!). Moreover, it was obviously either written by someone in a hurry or by a non-native speaker, because many of the sentences are so jumbled they don’t make any sense. Sometimes whole paragraphs were repeated. The typos are egregious.
I’m also baffled that the reviewers above didn’t mention this (I guess one brought up the typos). This is actually the first time I’ve ever been frustrated enough with a book to write a review. I was totally happy with all the other books I got, but this one is terrible. Consider yourselves warned.
Rating: 1 / 5
August 6th, 2010 at 3:16 am
“Pessimism about the stock market ignores the fact that never in its history has the stock market moved straight up or down. The cyclical nature of the market is a historical constant, and is hardly an aberration.” ~ pg. 3
If you are interested in analyzing the results of stock investing, this book presents not only the basic tools needed to understand the stock market, but it also gives a history of stock market performance in the US and overseas. The main chapters cover:
The Fascinating World of the Stock Market – Dow Jones Industrial Average, S&P 500 and NASDAQ. This section explains why the health of the market can be determined by a small sample of stocks. A list of the twelve golden rules of investing is also given to encourage confidence and wisdom.
Investment Philosophies and Techniques – Detailed information on Mutual Funds and Hedge Funds.
Performance History of US Equity Markets – Extremely detailed historical analysis complete with graphs and charts.
US Stock Market Performance Relative to Other Instruments and Markets – “History has amply demonstrated the superiority, over time, of stock market returns over the returns that are available from such other investment tools as bonds and commodities.” Pg. 180
Balancing Risks and Returns: Three Theoretical Insights
Equity Valuation – Interesting sections about Amazon…
How to Select Stocks
Stock Options, Warrants and Convertibles
Retirement Planning and Tax Minimization
Wealth Preservation
Every aspect of the stock market is covered in this book, complete with detailed analysis. This may be essential reading for any investor, whether or not they manage their own portfolio.
Sarkis Joseph Khoury has lectured all over the world and shows his insight into a wide variety of financial and economic issues. He has also served as a consultant to major financial institutions and continues to lecture at many overseas universities. He is also the author of Conversations with the Conscience.
“There is no substitute for having a core set of beliefs or investing with investment advisors that do. The market, no matter how it deviates from what is fair and accurate valuation, will ultimately come back to levels that are consistent with fundamental values.” ~ pg. 82
~The Rebecca Review
Rating: 5 / 5
August 6th, 2010 at 3:40 am
I have taken a course from the author and I thought he was brilliant.
Your review isn’t complete, you only read 3 chapters – how can you accurately judge the book?
I talked to him about the typos, and he said his publisher totally dropped the ball. I have read other pieces from Khoury and haven’t found typos like you claim there are in this book.
I have yet to read the book, but he is one of the most impressive people I know. He is a wealth of information about securities, bonds, and is extremely educated about the trends and history of the market.
Rating: 5 / 5
August 6th, 2010 at 4:20 am
Beginning with the introduction of security market, this book goes into the analysis of broader financial aspects. Some of the materials covered in this book may be too complicated for beginners; however, if you keep reading it repeatedly, you will know what it is talking about.
Rating: 5 / 5