The Little Book of Common Sense Investing The Only Way to Guarantee Your Fair Share of Stock Market Returns Little Books Big Profits
March 31, 2009 by Home Investing · Leave a Comment
Investing is all about common sense. Owning a diversified portfolio of stocks and holding it for the long term is a winner’s game. Trying to beat the stock market is theoretically a zero-sum game (for every winner, there must be a loser), but after the substantial costs of investing are deducted, it becomes a loser’s game. Common sense tells us—and history confirms—that the simplest and most efficient investment strategy is to buy and hold all of the nation’s publicly held businesses at very low cost. The classic index fund that owns this market portfolio is the only investment that guarantees you with your fair share of stock market returns.
To learn how to make index investing work for you, there’s no better mentor than legendary mutual fund industry veteran John C. Bogle. Over the course of his long career, Bogle—founder of the Vanguard Group and creator of the world’s first index mutual fund—has relied primarily on index investing to help Vanguard’s clients build substantial wealth. Now, with The Little Book of Common Sense Investing, he wants to help you do the same.
Filled with in-depth insights and practical advice, The Little Book of Common Sense Investing will show you how to incorporate this proven investment strategy into your portfolio. It will also change the very way you think about investing. Successful investing is not easy. (It requires discipline and patience.) But it is simple. For it’s all about common sense.
With The Little Book of Common Sense Investing as your guide, you’ll discover how to make investing a winner’s game:
- Why business reality—dividend yields and earnings growth—is more important than market expectations
- How to overcome the powerful impact of investment costs, taxes, and inflation
- How the magic of compounding returns is overwhelmed by the tyranny of compounding costs
- What expert investors and brilliant academics—from Warren Buffett and Benjamin Graham to Paul Samuelson and Burton Malkiel—have to say about index investing
- And much more
You’ll also find warnings about investment fads and fashions, including the recent stampede into exchange traded funds and the rise of indexing gimmickry. The real formula for investment success is to own the entire market, while significantly minimizing the costs of financial intermediation. That’s what index investing is all about. And that’s what this book is all about.
JOHN C. BOGLE is founder of the Vanguard Group, Inc., and President of its Bogle Financial Markets Research Center. He created Vanguard in 1974 and served as chairman and chief executive officer until 1996 and senior chairman until 2000. In 1999, Fortune magazine named Mr. Bogle as one of the four “Investment Giants” of the twentieth century; in 2004, Time named him one of the world’s 100 most powerful and influential people, and Institutional Investor presented him with its Lifetime Achievement Award.
User Ratings and Reviews
4 Stars One of the best books written for the average 401k investor
Over the past year, I have read 7 of the “Little Book of common sense Investing”, and this is by far, the one that makes the most sense. All of the other books describe how to pick winning stocks, value stocks, diversification, and other “tricks” to winning in the market (and by my experiences, none of them work). This book, talks about “Index Funds” that track the broad markets like the S&P 500, and how safe and economical that strategy is in the long run.
I agree 100% with the author’s work, especially for the average 401k investor who doesn’t have time to “play the market”. Especially when you factor in the fees associated with buying and selling individual stocks, and using other Funds that have high management fees associated with them.
5 Stars Common sense in a market of deception
Summary (To save you time):
If you want to retire early and financially wealthy you’ll go a long way to beat this book. your first investment should be this book and then the markets. John Bogel provides a clear and concise text on how to make a good (If unexciting) return.
This book is accessible, factually based, informative and small enough to read quickly. There is no heavy analysis or huge amount of brain power required.
Review:
What makes a good investing book? It always seems to be the promise of riches and excitement. Well good luck most of the exciting stock picking methods lead to bankrupcy.
What should make a good investing book? Hows about something that can actually work?
Please bear in mind at this point that if a stock picking method cannot be rationaly explained as to why it works the chances are its garabge. One method that was well explained is Value Investing. Unfortuantely these days you are up against computers that can analyse all world wide stock markets in real time - chances are you won’t win.
In a market of hype about the “Latest” and “Greatest” stock picking method John Bogel has written a book based on common sense. Inevitably all investors in a market must on average gain returns equal to the market, less costs (Forget these at your peril).
In recent years Wall Street has made $400 Billion per year in those costs (Thats right they won and you lost before your money even went into stocks). Hows about keeping that money and still investing and getting a fair (Average) share of returns? Sound boring? Well the best way isn’t always the most exciting.
Through humble arithmatic John Bogel convinces you of the value and sense in a low cost index tracking fund.
Each chapter finishes whith people who endorse indexing. The likes of Warren E. Buffet, Charlie Munger, Charles Schwab, etc (Who all know more about investing than I ever will) endorse indexing. Thats good enough for me.
As a quick explanation of the aritmetic (I made these numbers up, they’re not from the book, but they are mathematically accurate) and why it should convince you:
Assume the stock market returns 10% per year, you have 100% portfolio turnover per year, 2% costs (Very low) and 40% taxes (which is about right in GB where I live). If you have a system to beat the markets you need a return of 10% or more as well. So 10% return + 2% costs + 40% taxes =
(10 + 2) / 0.6 = 20%. Well good luck! Your system needs to double market returns. Hint: One reason Warren Buffet is able to beat the markets is he has very low portfolio turnover (Thus avoiding many taxes).
So are there down sides to this book?
Well Yes, there always are. Inevitable John Bogel uses the Vanguard S&P 500 index tracker (From his own company) as an example. He mentions others but not very often. So it sometimes feels a little like a sales exercise in places. However never so much that it detracts from the point. And I am a cynic who is always looking to disprove (Or even disapprove) of what I read.
Also indexing doesn’t offer you very much excitment. However I can counter that with I want to retire early, not late (And broke) in life knowing I had fun in the markets.
Lastly I haven’t read all the books out there and there may well be better for me yet to discover. As far as I personally have read this book tops the list though.
Resummary:
Not exciting but so well worth the money, unlike most of the garbage out there. As for most stock picking methods please remember you are taking on the best and brightest on Wall Street and their computers. They still lost huge regularly (In recent years lets all remember 2000-1, 2003, 2007-8, each time we witnessed in the region of a 40% crash in the markets). If they fail why can you or I do better? I’ll stick to boredom and a fair return.
As a final endorsement of what John Bogel writes about, when companies make investments that they have to all but guarantee returns on (Pensions etc), they invest in the manner described in this book. They just don’t advertise it, but if you want a good safe return guess what…
5 Stars A Clear, Concise Argument for Index Funds
So as not to leave anyone in suspense, according to the author the “only way to guarantee your fair share of stock market returns” as it says in the title of the book is to invest in index funds that mirror the broad market, such as an S&P 500 fund. Plain and simple.
Basically, Mr. Bogle lays out his argument for that viewpoint in several relatively short, easy-to-understand chapters that each focus on a separate aspect as to why index funds are the vehicle of choice for the long term investor. He provides the reader with supporting historical data, information about fees, income tax effects, quotes from other respected investors, etc., to build a strong case for index funds. The effect of what you may think are slight differences in fund fees and charges from one fund to another over time are quite shocking.
Overall, this is a well-written, organized, intelligent book that is also thankfully concise, and I thought it was well worth reading. I can see there is a lot of wisdom for sticking with index funds for the long run.
5 Stars A good book on investing
An excellent book on investing. Straightforward form people whom know what they are talking about. And quoting from other good references as well.
4 Stars Simple and effective
As others have mentioned, this book could be distilled down to “The only way to succeed at long term investing is to buy low-fee mutual funds that track the whole stock market”. The entire rest of the book is the justification, and it’s pretty hard to argue with any of it. Sure, you can beat the market sometimes, but it can’t last.
As a beginning investor, I found the book informative - it helps you think about stocks and the market in ways that aren’t immediately obvious to the uninformed.
The Vinefire 10 Day $1000 Challenge
March 30, 2009 by Home Investing · Leave a Comment
Enron The Smartest Guys in the Room Blu ray
March 30, 2009 by Home Investing · Leave a Comment
Enron The Smartest Guys in the Room Blu ray
Studio: Magnolia Pict Hm Ent Release Date: 05/30/2006 Run time: 80 minutes Rating: Nr
User Ratings and Reviews
2 Stars RATED R
I am a teacher and ordered this video to add to a lecture on corporate business practices. It says in the description that it is “NOT RATED”. I was very surprised when I received it and discovered that it was “RATED R for LANGUAGE and NUDITY”!!!! Amazon refunded my money, but I noticed that they still haven’t changed the description to make it accurate.
It was an interesting video, but obviously can’t be used for classroom purposes, which is sad because the “nudity” was not critical to the overall plot or information presented in the film.
5 Stars A take of Sickening Greed
Looking back I guess we all can see that Enron was just the tip of the iceberg. It’s devastating to think that these greed merchants were allowed to run rampant but then, on top of it to see that Enron was only one of so very many…it leaves me rather speechless. This documentary is not only skillfully done - with a slickness that works for the most part beautifully - it is also is so intensely informative. What an irony that Ken Lay died before paying the price for his avarice- while Jeffrey Skilling is still stewing in his nasty juices. Bravo to the folks who took on this topic so well and gave us a deeper and more terrible understanding of the greed merchants who infested our system and have ultimately brought us so low.
5 Stars Chilling indictment of greed; especially relevant now
Before the banking crisis and the housing bubble and toxic loans, there was the Enron crisis. This chilling documentary shows how greed, lying, ambition and corruption led a major corporation to fix its books so that a few people could become fabulously rich and how Wall Street analysts, major banks and America’s oldest accountancy firm became enablers in the scheme.
Unfortunately, the movie also shows that we as a society learned nothing from the collapse of Enron. We sowed the wind and now we’re reaping the whirlwind.
Shown mainly through interviews and video clips of Enron executives Ken Lay and Jeffrey Skilling when the company was the darling of Wall Street and could do no wrong, the movie plots the company’s path to total failure. It invested in a gas plant in India and lost a billion dollars but never admitted it. It invested in video on demand and lost hundreds of millions more and lied about its failure. These losses were hidden through the creation by the CFO Andie Fastow of sham companies and Fastow himself skimmed $45 million off the top. Arthur Andersen, the accountancy firm, approved Fastow’s illegal schemes and shredded one ton of documents to avoid being caught. Wall Street stock analysts recommended Enron quarter after quarter and major banks loaned more funds. Anyone who dared question the company’s viability was fired.
We hear chilling recordings of Enron energy traders in California chuckling with glee as the company deliberately shuts down the power grid, causing misery to millions and probably death to not a few, so they can bid up the price of electricity.
Most scandalous, we meet some of the ordinary employees encouraged to invest all their retirement accounts win Enron stock. They lost everything while the top officers of the company cashed out.
Enron was a systemic failure of our capitalist system and was a warning that was ignored.
4 Stars The dumbest guys in the room?
Great DVD with information about the Enron scandal. It was very informative and entertaining! Watch this if you want to feel bad about American business ethics.
1 Star Disk has compatibility issues
As a product this deserves zero stars, because it simply doesn’t work. Like some other reviewers have experienced, I found that this DVD would not play properly. I tried it on three different DVD players and on two computers. On two of the three DVD players it brought up a menu with still photos from the disc, but would not play the movie and on the third it would not boot, instead giving a disc error message. On the computers, I could only get it to play by manually navigating to the .wmv movie file and playing it with an application that can parse windows media files. This is wholly unacceptable for a professional release.
When to Get a new Air Conditioner
March 30, 2009 by Home Investing · Leave a Comment
Quicken 2005 Premier Home and Business Old Version
March 30, 2009 by Home Investing · Leave a Comment
Quicken 2005 Premier Home and Business Old Version
Quicken 2005 Premier Home & Business helps you manage your personal and business finances, with a set of tools that help you do it all. Over 100 customer-driven improvements to the most-used Quicken features make it easier than ever to get what you need out of Quicken! Simplify business taxes to track mileage and other business expenses for your Schedule C tax return Optimize investment sales by estimating capital gains before selling Check investment performance against the market for the past 1, 3 and 5 years
User Ratings and Reviews
5 Stars Long time Quicken user
I’ve been using Quicken for at least 10-15 yrs. I have no business relationship to Intuit other than being a long time user of TurboTax and Quicken. I’ve read all the negative comments about Quicken 2005 and am very surprised. I’ve been using 2005 Business & Premier for 2-3 yrs and have had no problems after upgrading from earlier version. It’s a great program. Works perfectly. I’m a little disappointed that Quicken is making me upgrade to 2008 shortly due to lack of on-line download support. But I’ll pay for the upgrade because of the overwhelming value I get from Quicken.
1 Star Quitting Quicken!
The changes Intuit has made to what was ONCE a useful product, are TOO MUCH! The WORST, to me, is that much of my 15 years of investment data became inaccessable after I converted. Am not sure, but think the program refuses to access old, inactive investment accounts.
Do not KNOW, because I simply kept the old program (Q2000) and data! No apologies - the company always claimed to be intuitive and user-friendly; for over a decade, it WAS friendly enough, even when I had to start using ZIP disks to back up. It isn’t friendly any more, though.
I’ve spent untold hours recording all my financial information since 1991, including those inactive investment accounts. Quicken 2000 will simply have to keep me going; had meant to upgrade earlier years ago, but am no longer sorry. Read the reviews of Quicken 2003-onward - enough said.
2 Stars It has bugs
There are problems when making payments to vendors. If I select “print check” it will NOT show up in check writing section unless I give it a check number, save it, then put it back to print again. You also have to re-click on values several times to get credit updates to sync. I’ve gotten so used to it I do it automatically, but these are basic things that should have been worked out.
5 Stars The Best Accounting Software So Far…
I have tride both Peachtree and Quickbooks. These software offer robust accounting features but can be overwhelming for a home office/medium business user. Quicken answers with this great piece of software. It has features for all of my small business and personal finance needs.
1 Star Too buggy
I was surprised to see how buggy this piece of software is. Couldn’t get it to work. It downloaded statement from my bank but that was a month old.
I am reverting back to Money Express that came free with my PC. That one has much less feature set but at least it works for my basic needs.
Tried the trial version of Moneydance. The user interface seems like it was developed by a bunch of school kids. But it works for many of my needs. Didn’t want to pay 30 bucks. Will consider it in future though.
Quicken really shocked me with its poor quality. It crashed several times. It is ironic that an anti-Microsoft* guy like me is actually happier with their product compared to its better selling competitor. Oh well. Shame on Intuit.
*p.s: am a fan of Mr. Gates though
