Top positive review
A wonderful book for those interested in learning about investing
30 December 2018
The book has wonderful insights for the would be investor. Some snippets which I found particularly insightful include:
1. Efficient Market Hypothesis is not completely accurate in certain situations
2. This is because as humans we deal not only with information but also with emotions / psychology
3. Therefore, we need to focus on those assets where there might be divergence from the Efficient Market Hypothesis
4. For that we need a Second-Level thinking, not necessarily contrarian but different from the lot
5. Price is different from Value. Price is a function of fundamentals and market psychology. While Value is mainly a function of fundamentals.
6. The relationship between Risk and Return is not completely linear. Higher Risk entails an element of higher losses too which we tend to ignore assuming a linear relation.
7. A good portfolio considers Risk holistically and balances / hedges it appropriately.
8. Fundamentally, markets operate in cycles. People can benefit from them if they are more attuned.
9. Understand the psychological pitfalls and your own limitations around investing.
10. Appreciate the role of luck which stops you from becoming overconfident.
No wonder, Warren Buffet likes it. Having observed the market, I could relate to many of the ideas mentioned here. This book provides good guidance for anybody who wants to get into investing.