4 comments about The Lords of Strategy: The Secret Intellectual History of the New Corporate World.

1. In the Lords of Strategy, Walter Kiechel deftly unpacks many of the ideas that many of us take for granted -- from competitive advantage to value chain to core competencies -- and explains their history, impact, and relevance with insight and wit. He takes material that could have been as dry as day-old toast and instead creates an engaging and compelling read.
   
   Kiechel approaches his subject neither with reverence nor venom: he helps us understand the pioneering thinkers who created the world of "business strategy" by exploring the ways in which they reshaped the corporate landscape, how their personalities influenced their work, and the lasting impact (for better and worse) that they have had. He's equally prescient about how the Lords bolstered the careers of their client CEOs and enriched shareholders (eventually) -- and why, especially for middle managers, a deep consulting engagement can feel more like a rectal exam than an exercise in improving the company. He traces the rising dominance of left-brained analytical thinking in the consulting firm and the executive suite as well as the increasing "fierceness" of capitalism.
   
   I've learned more reading this book than in any 10 average business books (and I've read a lot of them). It really is a must-read for anyone in business or entering the corporate world. It will explain much, prepare you well, and expand your understanding of contemporary business thinking.
   
   Full disclosure: the author is a former colleague. The principal impact that has had on this review is that I can say unabashedly that in this book he demonstrates the same erudition, wit, and ability to bring together seemingly disparate ideas, people, and events into a thoroughly compelling narrative just as he did when we worked together. I've already purchased multiple copies of this book for associates so my money is co-located with my mouth.



2. Those who have studied business have probably heard of the Boston Consulting Group Matrix, the McKinsey 7-S Framework, Michael Porter's Value Chain, and various other strategy tools. But where did they all come from, and how did the theory behind them develop? The former managing editor at Fortune Magazine, Walter Kiechel III, explains the history of ideas in the field of strategy over the past 40 years in this book.
   
   This is the most interesting book on strategy that I have read, because it tells the story of the individuals and consulting firms who created the strategy concepts and tools which revolutionised corporations around the world towards the end of the 20th century. The idiosyncrasies of brilliant strategists are described, as are their struggles to have their ideas accepted. The author's personal knowledge of the major players makes the narrative more compelling.
   
   The author even-handedly discusses both the good points and the bad points of the various strategic ideas, but on the whole he is an admirer of the lords of strategy and tends to exonerate them from blame for the mess the world now finds itself in, whereas others might be inclined to accuse them of encouraging companies to undertake unwise levels of risk in order to maximise short-term shareholder returns. I found some parts of the book a bit dry, but for the most part it was highly engaging.



3. The debate over the value of high-level strategic consultants and academics has waged for decades. I was one such consultant for the better part of ten years who often spent the first part of any conversation defending my profession (I have since moved to advertising and now defend that profession). Kiechel covers the rise of strategy consulting firms--BCG, McKinsey, and Bain--and notable business school professors who contributed to the strategy revolution. His background provides the credibility to do so, he was a former Managing Editor at Fortune magazine and was the Editorial Director of Harvard Business Publishing from 1998 to 2002.
   
   He sees the best strategists as objective intellectuals who see patterns of evidence and put them through conceptual frameworks to produce pragmatic insights. This largely began in the sixties and seventies when strategy began to be systematized and integrated. Cost, customer and competitors were the three primary areas strategists looked for patterns to exploit. In the nineties, the practices were more fad-like including reengineering and total quality management. This was the era I practiced in and I felt like the lone voice extolling the virtue of a simple but robust strategic planning process. I jumped for joy when in June, 1997, BusinessWeek had on their cover, The Return of Strategic Planning: Once More With Feeling. Which was the pivot point for Taylorism-like monitoring and measurement processes becoming more humanistic and holistic in their design.
   
   The author tells some great industry stories but what struck me is just how important the role of strategy and management consultants is to business. The influence that such a small number of people and firms have had on modern business is truly staggering. This is where the subtitle of the book comes from: The Secret Intellectual History of the New Corporate World. Just a handful of models and frameworks devised by a small number of minds have been used by countless businesses to generate their strategies - this is what is so amazing.
   
   From my experience, the best strategists retain a child-like wonder and a natural intellectual curiosity that is backed by analytic rigor - an incredibly hard combination of skills to possess in one person. I suggest this book only if you are interested in the history it covers and/or are a follower of the strategist value debate. In other words, this is not a strategy how-to book. Other books in this area I have read are The Management Myth, The McKinsey Mind, Rip-Off!, House of Lies, and Consulting Demons - so you may want to check them out too.



4. Author Kiechel calls strategy the most powerful business idea of the past half-century. Fifty years ago business plans were simply extrapolations of the past without regard to customers, competitors, or costs. 'Good old boys' succeeded as CEOs, without a need for alertness or sharp insights. Then came deregulation (transportation, banking, telecommunications), new technology (computers, the Internet), and freed-up capital markets (hostile takeovers, LBOs), and globalization, and life hasn't been the same since. The bulk of "The Lords of Strategy" is taken up with the progression of strategic thinking as seen by its original thinkers - Bruce Henderson at Boston Consulting (BCG), Bill Bain at Bain Consulting, Fred Gluck at McKinsey, and Michael Porter at Harvard Business School.
   
   The first phase of strategy consulting targeted positioning for low costs. "Where was one's business on the experience curve, and in market share?" compared to others. Maximize market share to obtain experience-curve cost reductions (typically 15- 25%/doubling), then use the lower costs to increase market share again; savvy buyers would push vendors to price according to their volume experience. The second stage of this phase had new product introductions priced for where costs were going to be, not where they were - scaring off new competitors. BCG's 'Growth-Share' matrix (stars, cash-cows, question marks, and dogs) for allocating cash among business units was the most famous consulting product at this point. Porter's 'Five Forces' (suppliers, customers, substitutes, competitors, new entrants) and generic strategies (low-cost leadership, product differentiation, market specialization) then quickly brought him and his Monitor firm to the forefront. Managers learned the hard way that investing in new low-cost capacity often forced high-cost plants out of production and created price wars that created financial returns far less than planned; another major lesson was that small scale advantages/easily-entered markets created fragmented, low-profit industries.
   
   The second stage (late 1980s to today) emphasized process improvement (Michael Hammer) and time-based competition (George Stalk).
   
   The third stage involved motivation - getting the most out of people (eg. much of "In Search of Excellence"). Kiechel points out that business has long been a struggle between those who see the firm largely through the lens of numbers (sales, costs, budgets) and those who focus primarily on people (energy, ambition, retention). The latter, however, have not been able to develop credible metrics for their points of view, usually cannot agree amongst themselves on how to proceed, and have a poor track record. (The 43 enterprises identified as 'excellent' in Peters and Waterman's 1982 best-selling 60-edition book quickly lost their shine - two years years later 'Business Week' pointed out that one-third were in financial difficulty five years after being surveyed, a few years later - all but five were.)
   
   The fourth stage of strategic consulting was financial engineering - leverage, takeovers, etc. that redirected the firm's purpose to shareholder capitalism, and away from corporate excellence and concern for multiple sets of customers that included society at large. Kiechel reasons that shareholder capitalism was last because it took until 1982 for the DJIA to come alive - it had passed 1,000 in 1972, collapsed, and didn't return until 1982. Junk bonds created in the late 1970s are credited with giving corporations the ability to much more readily finance initiatives. (IBM made its first public debt offering in 1979. Junk bond volume soared from $30 billion in 1980 to $242 billion in 1989; 10% was used for takeovers and LBOs.) Management now had to be alert to stay alive - 143 (28%) of the 1980 Fortune 500 Industrials had been acquired by 1989, and over 10,000 acquisition deals occurred between 1982-89. Each corporate division was subjected to economic value-added (EVA) analysis, those failing to earn their cost-of-capital were sold, and the proceeds used for new acquisitions (most resold again later). Large amounts of current assets became the 'kiss of death' that attracted takeover vultures who would then immediately take out those assets. Eventually, some realized that the ultimate defense was to become too big to fail, acquire, or ignore - hence, the pursuit of very large leverage, especially through borrowings from a single source, constant growth, and dispersal of facilities across multiple legislative districts, states, and customer nations.
   
   BCG recently surveyed the twenty biggest global firms to get their thinking on strategy. Over one-third replied that they didn't do strategy - it wasn't possible to make useful forecasts, so they emphasized speed of adaptation instead (aka Jack Welch at G.E.). Kiechel sees the new strategy focus on risk (debt, bubbles, terrorism, overly lean supply chains), boundaries (what businesses are we in and not in, what do we make vs. outsource), and purpose (corporate value in 4-5 years).
   
   Kiechel provides an interesting, though somewhat laborious, read on the history of U.S. business strategy. That focus has only once shifted from lowering costs, and then just briefly during the "Human Relations" management fad (participative management, TQM, team-building). Lowering costs has been a prime focus of American business since at least the days of Frederick Taylor and his 'Scientific Management' - it simply has expanded in scope (now include overheads and costs of capital - not just direct labor) and increased in intensity (new threats from globalization, takeovers, LBOs and private equity buyouts) over the last 110 years.
   
   Bottom-Line: Kiechel contends that little new in strategy has come out in the last 15 years - probably because lowering costs has never been simpler. Today's CEOs and managers hardly need even an MBA, thanks to improvements in transportation and communication, and a supportive government that allows more and more production, R&D, accounting, and customer support functions to be outsourced, off-shored, or performed locally with H1-B aliens, illegal workers, and even customers - all at the lowest possible cost. Then there's off-the-shelf computer systems, cloud computing, and automation for much of the rest. Eventually our suppliers will handle everything at the lowest possible cost, most Americans won't be able to afford even that, and we won't need business strategy.

5 comments about The Elements of Investing.

1. To come from eminent Professors Malkiel and Ellis I was very disappointed. The small book is 117 pages and five chapters of commonsense advice on investing. The book begans with a few pages on "Do no harm" and never moves into any more exciting chapters than that. Make sure to take advantage of your 401(k) or IRA and diversify your portfolio. That's about it and others may feel otherwise but that is my opinion.



2. If you are a Burton Malkiel and/or Charles Ellis fan, do NOT buy this book. You presumably have already read some of their other works and this book adds nothing new. It is a very brief (small, short, large font, lots of white space) book that summarizes the basic investment lessons that you would already know. If I didn't have more respect for Malkiel/Ellis I would suggest that they created this book just to capitalize on their names. On the other hand, if you haven't read their works (or anything by John Bogle) then the lessons in this book will prove valuable. You will still feel like you overpaid for the book (it would make a good feature article in a magazine), but at least it may simplify the investment arena for you and provide you with some clear (albeit very succinct)direction.



3. Two long-standing powerhouse investment experts and authors, Ellis and Malkiel have teamed up to write a simple investing guide for the uninitiated. This book is best suited for those individuals who have a very limited or no investment knowledge, as well as for investors who have had no success or can't seem to make money consistently, especially in bull markets. This short and sweet book covers the basic elements of investing in a clear-cut step-by-step approach. Many new investors will benefit from its down to earth, easy-to-follow advice. Seasoned investors will not find anything new here. The keys to successful investing according to the authors include: saving early-on and consistently, using company and governments sponsored retirement plans to build wealth, diversification using index funds, rebalancing annually, using dollar-cost averaging, and investing for the long haul by ignoring market fluctuations.
   
   The authors strongly believe in the buy-and-hold mantra and the efficient market hypothesis. Unfortunately, using this approach with low-cost index funds is totally antiquated in today's financial world where we have seen two stock market crashes in the last decade where investors lost $11 trillion of market value. As the late Nobel Laureate economist, Paul Samuelson, has said: "The longer you own stocks, the greater the risk of a devastating loss." That is why buy-and-hold is doomed to failure.
   
   Today's investors need a pro-active investment strategy using a specific action plan with specific buy and sell rules. Since most investors will not or do not want to consider an active investing approach, then this book will certainly suit their needs and provide a decent return, although it is subject to being fully invested during future bear markets and crashes which will occur, as they have in the past.
   
   Buy-and-holding index funds is certainly a viable strategy, but it definitely has risk, more risk than most investors realize, and is certainly not an optimal approach. As in sports, a winning team requires both offense and defense. Buy-and-hold does not offer a defensive strategy when it is needed the most - during bear markets and crashes - and that is a major shortfall that is critical for investors to understand.
   
   Interestingly, the authors made a surprising statement as follows "charting is akin to astrology." This view is ridiculous in today's world in light of the hundreds of members of the Market Technician's Association who are Certified Market Technicians, the many members of National Association of Active Investment Managers, and the many large institutions and financial firms that have technical analysts on their staff who use charts to identify exit and entry points for the market. Using charts have helped many investors and institutions avoid this latest bear market. For example, by simply using the 200-day moving average with the major market averages, among other technical indicators, stock market losses were greatly reduced by being out of the market way before the September 2008 market debacle occurred.
   
   In summary, the authors present a rationale for using the well-known buy-and-hold approach. They don't seem to be swayed by the volatile and crushing crashes in the past decade, and that is their right. Investors need to understand that buy-and-hold is a dangerous approach in volatile times, and that they may want to consider alternative self-directed investing approaches to protect their hard-earned money in future years.



4. An excellent, easy-to-read and understand saving and investment primer for the beginning investor. The thrust of the book is index funds. Forget about mutual funds that pay managers to beat the market--they rarely, if ever, do. Put your money in funds that mimic the broad stock and bond markets. Their favorites are Vanguard and Fidelity index funds. And to the young person, their best advice is start saving/investing early. Right now, in fact. Thanks to the miracle of compound interest, your accumulated wealth will be far greater than if you start late.



5. This tiny book is 117 pages of commonsense investing. The purpose of this book is to teach the principles of investing. The authors suggest greed is the biggest danger to investors. This book is to the point, with simple rules.
   
   *Diversifying broadly over different types of securities with low-cost "total market" index funds and different asset types--and why this is important.
   *Focusing on the long term instead of following market fluctuations that are likely to lead to costly investing mistakes.
   *Using employer-sponsored plans to supercharge your savings and minimize your taxes.
   
   It is very important for the investor to be well informed. I often find my investor talking what sounds to me like a foreign language. Along with this book, I will attempt to become a more knowledgeable investor. I like the way this book cuts out the rhetoric and puts investment theory in simple terms.

5 comments about Panic: The Story of Modern Financial Insanity.

1. Not what I expected. This is an anthology of newspaper/magazine articles written during various recent financial panics. While each is good, and emblamatic of the times, I had expected a more cohesive and analytical work linking together common threads, highlighting differences, etc. This is a survey.



2. Saw "Michael Lewis" and picked this up. I love his stuff. Shame on me for not reading what this book is (a collection of old financial journalism highlighting other cataclysmic market turbulence) but shame on Michael Lewis for putting his name on this. I'd guess the goal of this was to hitch a ride on the panic bandwagon and make a few bucks. Publisher got my money but the author lost my respect.



3. Lewis' book was not what I expected. It's not a book by Michael Lewis. It's a book edited by him. But the editing is good. There is nothing new about financial market panics. The pieces chosen by Lewis indicate this every clearly. Change the names of the actors and you have the same plot.



4. Even though the book author is Michael Lewis, in reality he is the compiler of the information, because of this not all the articles are as interesting. I have to say the book is a compilation of published books, newspapers, magazines and interviews. The way it is organize, is by market crashes, starting with the crash of 1987 and ending with the subprime crash. Because of this organization the book is fairly easy to read, it is divided in months before the crash, during the crash and days after, giving the reader a chance to experience the articles and interviews that were shown at the time, thus allowing the audience to feel that a crash was imminent, helping to understand a little bit about why the crash had occurred.
   I recommend this book to anyone that is interested in knowing more about the recent market crashes, but I need to remind the readers that many of the terms used in the articles are financial terms, that not everyone understands.
   If you are looking for a good book recommendation and easy to read, I strongly recommend liar's Poker by Michael Lewis Liar's Poker: Rising Through the Wreckage on Wall Street, and also for the baseball fans Moneyball Moneyball: The Art of Winning an Unfair Game.



5. The audio package makes it clear that Michael Lewis was the editor, so there was no surprise, unlike what some hardcopy reviews have claimed. Much of the stronger material was contributed by Lewis himself, including pieces written at the time of the relevant panic, and his editorial remarks.
   
   Some conclusions reached while listening:
   
   * Some of these crises involve problems caused by people who weren't actually contributing much to the world. Those traders who were speculating on quick market moves and getting rich or going bust: what a waste of brainpower, deployed only to take money from other people with little in return relative to the greater good or society. My sympathy was muted, and, as Lewis said at the end, perhaps people in this business never will make so much money again. Fine with me.
   
   * Don't say "nobody predicted" this or that crisis, or "who could have seen that coming?" As some pieces showed, there were writers who were all over situation and made fairly accurate predictions. Not that people were listening or anybody knew what to do. It's probably fair to conclude, however, that unlike the housing and dot com bubbles, our most recent problem with sub-prime lending, securitized debt with little visibility, people really didn't see what was coming, or the extent of it, anyway.
   
   * Some crises stick with you a lot longer than others. The Asian crisis and Russia's default turned out to be not such big deals, right? Bounce back we did, setting the table for the next crisis. Lewis certainly doesn't make you think there will ever be a crisis to end all crises, or even a long spell between messes. Humans are what they are, and Lewis feels (rightly) that some occasional crises are the price of creativity and freedom. Within reason, of course. Greed and ignorance shouldn't be unlimited.
   
   The audio contained a few duds. Perhaps some of the weaker content was trimmed in the abridgment. Some of the details don't age wonderfully, but enough of the basics and conceptual explanations remain solid and informative.
   
   3.5 stars

5 comments about Crash Proof 2.0: How to Profit From the Economic Collapse.

1. The value of this book is not only on the position it exposes you want to be in the coming economic events
   but in the tremendous insight of the fundamentals of world economics.
   It is easy explained because the author easy understands it, demonstrated through his predictions of dot com
   and housing bubble.
   
   You want to learn what the hell is happening with the money, read this book.



2. The first book for the first full week of 2010 was Crash Proof 2.0 by Peter Schiff. A very awesome book based around the most recent economic crash. Most fascinatingly, the book Crash Proof was written by Peter in 2006, predicting, at that time, the upcoming economic crash. Crash Proof 2.0 was released in 2009 with additions at the end of each chapter for the new threats facing our country's economic condition. Schiff is a very knowledgeable man on all things fiscal and if this book isn't proof (no pun intended) then I don't know what is.
   
   What is going to happen now? Good Question. Well since America, and by America I mean Bernanke, has decided to run the Greenback Printing Press non-stop the country is producing lots and lots of dollars which increases the money supply and ultimately devalues the dollars already in existence. And our Fed has nearly doubled the money supply since 2008. This is sure to cause inflation and lots of it, but it is very hard to pinpoint the catalyst of this impending massive inflation.
   
   I would say there are two major causes that can result in the inflation. One, the shift of our country from manufacturing to service coupled with trillions of dollars of debt to China and other nations. And two, the shear multitude of currency our country is producing on a daily basis that our Fed is unable to account for coupled with the fact we have no longer have a gold backed currency.
   
   Manufacturing to Service
   
   America has transitioned itself into a new country. From the 20th to the 21st century, we have rapidly transformed ourself from a manufacturing society to a service society. When we had manufacturing, we were a country rich in assembly lines and new products. We even had the worlds largest automobile manufacturing city, Detroit. Now, we are all service. We have marketing firms, worldwide restaurant headquarters, retail and more.
   
   Since our country is no longer backed by the value of gold, the value of our currency is ultimately determined by the base value of what we can export to other nations. When we moved from manufacturing to service we lost a lot of our export value.... I picture societies and organizations as pyramids... The top are the CEOs or Presidents and the bottom are the majority of the population as the workforce. Where the base of our country's pyramid used to be cars, equipment, appliances, etc.... Now the base is the service of our working class... burger flippers and stockers. The only problem is that if the dollar's export value is based of the value of the bottom of our pyramid how are we going to trade? (I don't believe there is a large demand for a McDouble "made in the US" over in China) We can't and our dollars are increasingly becoming less valuable.
   
   As the dollar becomes less and less valuable the countries that own all of our debt get wise. They will realize that our money is able to trade for less and less and it is becoming a useless IOU. Their only option is to get rid of them. They will most likely use the trillions of dollars they have and use them to buy what they can within our country. So that means real estate and the products that we still produce. Following the law of supply and demand, if trillions of dollars are cashed in on lots and lots of real estate (since we don't have any laws establishing all US property must be purchased by US residents) and products are bought and less quantity is available for the general population... prices will spike... huge! And we have Humongous Inflation!
   
   A Currency Backed By Nothing
   
   The second potential cause for this massive inflation I would like to discuss is that the US no longer backs its currency with gold. I already have given the history lesson on this but I will recap again real quick with a timeline provided by [...]...
   
   1880-1914 - The US dollar was hard pegged to gold resulting in domestic price stability and virtually no inflation. The financial needs of WW1 ended this.
   1915-1925 -In order to "pay" for WW1 countries had to print a lot of paper currency which by necessity mandated a delinking from gold because there wasn't enough gold to support the paper.
   1926-1931 - The gold exchange standard was established wherein each country pegged its currency to the US dollar and British pound which were then supposed to be backed by the dollar. When the depression began countries tried to cash in their pounds and dollars for gold. That "run" on gold forced the end of the gold exchange standard.
   1931-1945 -Fiat currencies reign worldwide leading to huge economic imbalances from country to country and was of the major contributing factors to the beginning of WW2.
   1945-1968 - 1944 Bretton Woods (similar to gold exchange standard of 1926-1931) Two main currencies again, the US dollar and British pound. A run to convert pounds to gold collapsed the pound and began the end of the Bretton woods accord. It took 3 years while governments tried to salvage the system and also to determine what to do next. Kind of like having one leg on the boat and the other on shore. 1963 - New Federal Reserve notes with no promise to pay in "lawful money" was released. No guarantees, no value. This is also the year of the disappearance of the $1 silver certificate. Once again, a subtle shift in plain view.
   1973-?- August of 1971 President Nixon ended the international gold standard and for the first time no currency had a gold backing.
   
   As you can see... the US has a currency only worth as much as they say it is... so we are playing pretend. And the pretend value of our currency is decreased when more of that money is made... and the Fed decided to make trillions of new dollars last year alone... and where did that money go? They have no idea. This video speaks louder than anything I could say... it is Alan Grayson asking the Inspector General of the Fed where all the money they created went... and she doesn't know...
   
   
   
   What do we do now?
   
   Now that you can see that there is a problem it is time to protect your investments. I can't tell you when this economic collapse is going to happen, but I know it will. And the safest thing to do long term is to get your money into anything but the dollar. The longer our country holds debt with other nations and keeps printing money, the faster we turn our currency into toxic waste. Schiff outlines areas for investing in Crash Proof and I would love to expand on his ideas. He says you should invest in gold, silver and foreign stocks. I also love real estate investing and I will go into that as well. Hold on, this is going to get fun!
   
   Gold and Silver
   
   If you are a regular reader then you know its no secret how much I love precious metal investing. It's a wonderful commodity that hedges inflation and is very undervalued in terms of the dollar currently. More specifically, I love silver investing. I believe that silver is going to jump leaps and bounds in future years for several reasons. Silver is a commodity used for the backing and production of currency in many countries, it has tons of industrial applications: microchips, phones, cameras, etc.) and the mines for silver are becoming less plentiful everyday. Additionally, Silver is only about $17 a troy ounce compared to $1100 for a troy ounce of gold... so it is much easier to get into as a investor without throwing a lot of money into one basket. I recommend going to [...] and buy Silver Eagles so you have a coin that is exactly an ounce and silver content is .999.
   
   I wrote several months ago about Guide to Investing in Gold and Silver by Michael Maloney. Both authors, Maloney and Schiff, use the same techniques to come to their conclusions about the future of American economics. They are both members of the Austrian School, a specific school of economic thought. Other members of the Austrian School of thought include Lew Rockwell, Ludwig Von Mises, and Frank Fetter. I think it's a school of thought within economics that deserves more of my attention and you might just see a post in the future based solely on this subject.
   
   Foreign Stocks
   
   This is a great way to get yourself into a rising market and in two ways. When inflation hits the dollar the foreign stocks will be gaining in their respective currencies, so they will be making money against the dollar and if you have a good enough diversification you should be making money off the rising market too. I like index funds because they require a lot less work and the chances of beating the market longterm with stocks is nearly impossible. Foreign indexes can be purchased from a couple different sites... [...] both offer Foreign index funds with different minimum investments... Most likely around $10k.
   
   Real Estate
   
   My favorite investment... Real estate is a great way to get your money out of the dollar with the use of OPM (Other People's Money) and it's a debt-backed commodity. First, you use OPM through a bank. You put down 10-15% and they put down the rest and then you have your commodity. Meaning, it costs a relatively low amount of money to buy a lot of property. Additionally, you are backed by debt! I know sounds bad, but it's actually really good. The real estate investing I am most interested in is multifamily real estate. You find a property, and if the rents you earn are higher than the mortgage you will pay, expenses, property management, taxes, etc.... then you are making a positive cash flow. The great thing about being backed by debt in this case is that it is "good" debt meaning that you are making more money on the property than the bank is making in interest accumulation. Another huge benefit of being debt-backed is that when the US has huge inflation you will be paying off that mortgage with cheaper dollars. For example, you find a duplex for $300,000 and you put down $50K (for simplicity's sake). You have a $250,000 mortgage. Then when we have a huge amount of inflation, it may cost $10,000 for a loaf of bread because the dollar just isn't worth as much anymore. Well, where a lot of things will increase with inflation, your mortgage will not. That means that it won't cost much to pay off the remainder of your $250,000 mortgage because you will be paying it off in "less expensive dollars." Pretty nice huh?
   
   I don't write these things to scare you, but to inform. There is plenty of time to change your current investing habits. Many people said that Peter Schiff was just preaching doom and gloom back in 2006, but they were clearly wrong. And now, when the same man who foresaw the last crash says that it's going to happen again, only worse... well... let's just say I am not going to be the one to criticize. Peter Schiff is currently running for the CT Senate spot and I hope for the sake of America's fiscal policies that he gets elected.
   
   I recommend this book to anyone curious about what is to come of America's economy. If you have any questions on the book don't hesitate to ask. I would be more than happy to help anyone that wants it.



3. Peter Schiff predicted the future of this country in 2006. It's a must read.



4. If you live in Connecticut and will vote in the coming senatorial elections, PLEASE read his first book to guage his ability as a fiscal prognosticator. Then read this one paying close attention to his advice on investment decisions. He was dead wrong then and he is once again dead wrong in this book. He just doesn't get it and yet never misses an opportunity to tell the reader how he got it right.
   
   His advice in version 1 was to short the dollar, short treasuries, buy European/non US stocks, buy gold(from a state bank in Australia to be precise) as a hedge against the disaster. Well this didn't work out so well for anyone who took his advice then, and if a reader were to look at this advice as it has played out in 2010, it's not looking much better today.
   
   Please, the congress is chocked full of knuckleheads whose only legitimate claim of authority rests in their ability to have and express forcefully an opinion, however wrong, however dangerous. We don't need one more, especially one who is so incredibly unaware of his own lack of understanding of financial markets.



5. In all honesty this is book opened my eyes in ways that have literally fundamentally changed my life. I am a proud American living the American dream in my dream American world. After reading this book, I was literally shocked to find a completely different perspective on the world economy, U.S. domestic policy, and how to protect my family against the coming currency crisis.
   
   If you are a U.S. citizen (or regardless), PLEASE read this book. Even if you don't agree with the viewpoints, you should be aware of the perspectives and global movements that (in my opinion) will fundamentally reshape the world. If I was a billionaire I would buy thousands of copies of this book and give it to anyone who would listen.

5 comments about How to Make Money in Stocks: A Winning System in Good Times and Bad, Fourth Edition.

1. Absolutely this book is a classic!
   
   In his book, Bill O'neil calls his breakout trading system "CANSLIM". Each letter in the word C-A-N-S-L-I-M stands for one of the seven chief characteristics of great winning Growth Stocks at their early developing stages, just before they make huge profits for their shareholders. The explanation of each letter is as follows:
   
   * C = Current Quarterly Earnings Per Share
   * A = Annual Earnings Increases
   * N = New Products, New Management, New Highs
   * S = Supply and Demand: Small Capitalization plus Volume Demand
   * L = Leader or Laggard
   * I = Institutional Sponsorship
   * M = Market Direction: What is the overall Stock Market doing?
   
   This system works, and this book teaches you both fundamental and technical analysis.



2. I was really looking for a book on trading stocks (versus investing) and I believe that this book offers lessons applicable to both.
   
   When I first began trading stocks online, I made the exact mistakes that this book says not to do. When a stock jumped in price, I sold and took profits too early when I should have held on and purchased more. When a stock fell in price, I either bought more stock to bring my average cost down or held on to my losing stocks too long "knowing" that eventually they would have to come back up. I was wrong. These are the classic mistakes that according to the book, most traders make, which is why they end up losing their money. And this was the exact same thing that happened to me.
   
   If I had read this book before getting into the market, I may have been able to prevent the big losses and keep the small gains I had been able to make. I would definetly recommend this book to anyone interested in learning how to trade or invest in the stock market. I haven't tried out the "CAN SLIM" system taught in this book, so I can't tell you if it works or not or that I made money following it, but I can tell you that the system makes sense and is worth learning even if you choose not to follow it.



3. Some good thoughts mixed with some b.s. and a lot of self advertising for his business. The pro america agenda was unnecessary as was the views on politics and Iran.



4. Good introduction to equity investing for retail investors. O'Neil's methods do not work for professional fund managers.



5. I read this at the urging of a friend. As background, I'm a retired professional investment advisor, have been through the Chartered Financial Analyst curriculum, and have decades of investing experience. I am therefore instantly suspicious of a book that promises on its back cover that "Anyone can learn to invest wisely with this bestselling investment system!"
   
   Granted, O'Neil clearly spends all his time with his charts, and otherwise must not get out yet. He comments that NASDAQ an OTC trading venue, not an exchange, when in fact NASDAQ gained exchange status in 2006. He thinks that air traffic accidents are investigated by the Civil Aeronautics Board, which lost its safety responsibilities to the FAA in 1978. Most tellingly, he writes, "Unfortunately, no original or thorough research on price pattern analysis has been done in the last 78 years." Even a brief perusal of the academic journals on investing and finance would have shown him that this isn't true.
   
   Much of the book focuses on chart reading. O'Neil includes many historical charts that clearly show his patterns. Unfortunately, many of the patterns are only clear in retrospect. For example, he describes a double-bottom pattern, shaped like a "W," where you should buy in as the right side moves up past the middle point of the W. Then he describes a double-bottom with handle, where the right side of the W is followed by a modest decline, and then you want to wait to buy until it reaches the top of the right side of the W. However, he describes no way to tell in advance whether the pattern will have a handle. By the time you know that there's a handle, you'll have already purchased on the right side of the W.
   
   As another example, he shows patterns for detecting market bottoms. However, you can look to the left of where he marks the bottom, and often see a false bottom that meets exactly the same criteria. I suspect that O'Neil, given his experience, has other ways to gauge the validity of these stock patterns. Unfortunately, if he can't describe them, it greatly reduces the value of the book.
   
   That probably explains why he adds the caveat that it takes years for someone to start reliably making money using his "system." Some people, with experience, will develop the same ability to figure out when the chart patterns are correct. However, it's very misleading to describe the book's contents as a "system," which in the investing world means a set of rules that can be strictly followed. Instead, it's a set of guidelines and philosophies on which you will have to add your own hard-earned experience to create a system.
   
   Which brings me back to the overinflated claim that, "Anyone can learn to invest wisely with this bestselling investment system!" It's absolutely false. So much is left to discretion that it will require someone with particular aptitudes to be successful at it. If you enjoy doing extensive analysis, have an innate skill at identifying visual patterns, and have the patience to study and learn chart reading, then you will probably be successful with O'Neil's approach. Someone who doesn't meet those criteria will almost certainly fail.

5 comments about The Millionaire Next Door.

1. The book is still well maintained and I am satisfied with it. The delivery is in the stipulated period so I am satisfied with this too. Thanks.



2. Great little book to get you thinking in the right direction to keep your money.



3. This book is an excellent tool to empower you, your thinking on saving, investing and future success. This is a must read over and over again!



4. The theme of the book is to live below your means, pay off debt, then invest whatever is left. It is a great plan to follow, but I got the message after 30 pages.



5. The Millionaire Next Door is an essential read for anyone. However, reading some of the Reviews -- both good and bad -- tend to miscategorize it as a "how to" book. It is not. It is research, and research done well.
   
   The authors are market researchers who, upon working on an assignment to conduct a focus group of male millionaires, are surprised when the men walking into the room for the study aren't wearing $1,000 Italian suits but instead are wearing jeans and are looking for the beer instead of the wine they are being served. The men were not what the authors expected to interview that evening -- those living in big houses, driving nice cars, taking extravagant trips, etc.
   
   So, they asked a few simple questions: who are typical millionaires (what do they do, where did they come from, and what are their habits) and in short, how did they get to be millionaires? The research they conduct answers these questions in great detail. Unlike several of the reviews of this book, it does not tell you how to get rich or what to invest in. While it could give you insight on what you can do if you want to become wealthy, the true insight is that it blows perception of what we consider to be wealthy people in our society. For example, it focuses on doctors and lawyers as typical perception: when you see one of these professionals driving in a nice foreign car, you think that they are wealthy. While that could be the case, it may be more likely that the person is up to his or her eyeballs in debt -- just because they have a lot, may not mean they actually have a lot.
   
   So, the book explores these people and their lives unlike any other. I believe that this book is essential reading. I even give copies of it to young people I know.

5 comments about Rich Dad Poor Dad: What the Rich Teach Their Kids About Money-That the Poor and the Middle Class Do Not!.

1. Rich dad-Poor-Dad is really a MAsterpeice, that could very well go down as one of the All-time classics. Ideas after ideas of common sense, as well as why so many people dont actually achieve their financial results, be it fear, ignoarance or both, will help you find these negative factors in you, eliminate them, and will encourage you to go after increasing your financial Intelligence! Then be ready to unlock your financial genius and live a life of Financial Independence, leading up to Financial Abundance (If you stay focused for longer periods of time, i.e, ofcourse.. :), A Must-Read for every human being!



2. It makes sense...make money work for you, not you work for money. However, 95% of America doesn't get it. This book teachers the basics of financial literacy, and makes it "click." I can safely say this book changed my life. Don't hesitate; get this book and read it cover-to-cover.



3. It's truly shameful that this subject is not taught in school.
   
   How many lives are unnecessarily blighted because people don't learn to handle money (my own included).
   
   Intead of living in deep debt, constantly worring about paying the bills and dreading the mailman's visit every day, we could all be living the good life, happy and prosperous, exploring our talents and desires to the fullest.
   
   Instead, we find a nation full of debtors, with bottom feeders living off of the ignorance of the vast majority, by keeping them indebted and enslaved.
   
   But you have to start while you're young. That's why it should be mandatory to be taught in school. When we are young, and our heads are full of thoughts of anything but learning, we only learn what is absolutely pounded into our heads, so why not put something in there that makes sense, and will help us actually live our lives prosperously, instead of forever treading water, financially, all our lives?



4. I think that this should be required reading material in school, everyone should read this.



5. I loved this book, someone gave me a copy. Then someone borrowed it and I bought another... someone borrowed that one. I bought another... someone borrowed that one... and then I had to order another. Finally bought this one, and didn't realize it, but when they said miniature edition, THEY ARENT KIDDING! Guess what, I just bought another regular paperback version today. Its good to re-read it every year or so you dont drift in your old way of thinking.

5 comments about The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition).

1. Deep dyve into investing, but clear and easy to follow. Shows a clear and logic way to approach investing in public companies that also can be used to invest in private companies



2. Warren Buffett always refers to chapters 8 and 20 on market volatility and margin of safety, so I read those with extra attention, but Benjamin Graham had a confidence of purpose and clarity of explanation that makes it easy to see why he developed such a (mostly posthumous) dedicated following. Investors (The Superinvestors of Graham-and-Doddsville for one famous example) who follow the philosophies that Graham touts in this book have become consistently successful. Classic.



3. Two of the core types of investing are value and growth investing. Value investing looks to find commodities at a price lower than their value while growth investing looks to find commodities with the potential to become larger. If you're interested in learning about value investing, this is definitely a book to check out.
   
   Originally published in 1949, the Intelligent Investor helped paved the way for value investors like Warren Buffet, who writes a preface for this revised edition. Even though II was created over 60 years ago, it's core concepts are still useful and true today.
   
   The biggest negative about this book is that it's relatively old. It was revised by Graham as recently as 1973 and includes updates by Jason Zweig but the majority of the content in the book was written over 40 years ago. Another downside is that it can be kind of grueling to read. That often comes with this subject matter but readability would help. At any rate, despite these shortcomings, the Intelligent Investor is a core book to learn about value investing.



4. I've just taken over the management of my investment portfolio from the brainless bank that let it lose 40% of its value in 2007 - 2009.
   
   For years I had heard of Graham as the "nec plus ultra" of all writers on investments, so this book was high on my reading list as I set to my new task.
   
   Unfortunately, the financial markets of 1972 (when Graham wrote this book) are far different from today's, despite the chapters written by Jason Zweig (interleaved with Graham's) which try to update and explain Graham's ideas in terms of the market environment of 2003. Read in 2010, Zweig's updates also seem quite dated.
   
   To achieve a prudent level of diversification today, most individual investors will use at least mutual funds, if not ETF's. The analysis of individual stocks is too time consuming. First one is up against professionals who do it for a living. Secondly, the complexity of today's markets for goods and services requires huge amounts of study before even looking at a company's financials. Thirdly, one should probably expect to analyse at least 20 companies before choosing one to invest in.
   
   If one wants to undertake individual stock picking, why not read this book before turning to Graham's "Security Analysis".
   
   If not, the purchase of a cheap second hand copy of the book can be justified, but primarily on the grounds of being able to skim it to see if one agrees with the words above.



5. Ben Graham is a born genius! If you want to learn about stocks from anybody it would be from 4 people - Ben Graham (The Intelligent Investor), Warren Buffet, Philip Fischer (Common Stocks and Uncommon Profits), and Peter lynch (One up on Wall Street). This book contains the framework and the foundations of stock investing. If your in the market and you did not read this book GET OUT and dont go back in till you read it! This book is essential. I cant stress it more. I must warn you though, Alot of it will be very boring but hey, something just cant be simplified. There is a commentary by Jason Zweig who makes it a bit simpler and using modern day examples.
   
   In short BUY THE BOOK!!!

5 comments about Aftershock: Protect Yourself and Profit in the Next Global Financial Meltdown.

1. No matter what else you are doing or plan to be doing, drop everything else and read this book. When you buy this book - get 20 copies because you will want everyone you know to read it also. Very easy read with vivid guidance. Arguments are compelling and well supported. Note to authors: Get rid of the shaded box on pages 107-108. This one ancillary item negates any conviction many readers may harbor that you have good judgment. (why tick off 56% of your readers with a statement that adds nothing to the book?)



2. aftershock was excellent. I compared what this book said to end the fed, crashproof, crashproof 2.0, don't start revolution without me, and shadows of power.
   All of them agree that we cannot continue to borrow from other countries to finance this massive debt that we are continually running up. All of them are saying that we will experience massive inflation and other undesirable consequences.
   What I liked about aftershock was it had the bubbles explained in details. I agree that 4 popped and have been temporarily re-inflated. And they will burst making a bigger POP. The last two are the dollar and govt debt. Its happening in Greece, happened in Zimbabwe, and throughout history no fiat dollar has survived as long as the dollar which is a note. Few people know what a fiat currency is :-(
   The question that remains somewhat unanswered is where to park assets for preservation and not so much for a gain. I do not see it in real estate nor stocks. I question if the plunge protection team is keeping the stocks up (& precious metals down) and this is why the fed reserve is not audited. But that is off topic.
   The only chance we have of saving the dollar is a full audit of the federal reserve (end the fed by Dr. Ron Paul explains it quite well). And probably shutting the fed res down. The fed is allowing the Washington politicians from both parties to spend our children's and grandchildren's futures away. We need PAYGO now and not years from now when we are forced to live within our means.
   I gave this book a 5 star rating. I would rank all of the ones I listed above at at least a 4.5 stars. I recommended this book to friends followed by crashproof 2.0 (by Peter Shiff who is running in Conn for office - I see Dodds decided to not debate him and retire instead hmmmm) and shadows of power by Perloff (to read how these economic problems were set up in 1913 by President Wilson)..
   I wish more people would read and be informed of what is going on with the country and their wallets and their futures.



3. The retailer kept their commitment on delivery date and time. The book itself is a good read for anyone concerned about our economic future, whether you think the authors are all wet or not.



4. 'Aftershock' should be required reading for every citizen who wants to survive the coming debacle.



5. This is must reading for anyone who doesn't want to find themselves standing without a chair when the music stops. With all that's happened in the past as well as what's currently happening, this book gives a down to earth forecast of what's on the horizon with suggestions on how to protect your assets.

5 comments about Payback Time: Making Big Money Is the Best Revenge!.

1. All these reviews sound like they're written by the same person -- and there's no substance whatsoever. Reading the reader reviews has given me the impression that this is a scam book -- too much hype, not enough substance. How can this be a best-seller with so few reviews, and the reviews that are here just sound like PR Hype.



2. I bought the book (Kindle version) on Mar 2nd...Just finished reading it. This is nothing more than a rehash of Rule #1.
   It's very easy for people like Phil to say 'find a company that you understand and buy it cheap...'. Tell that to people who actually worked in the companies that blew last year.
   I liked the Rule#1 but did not find anything useful in payback..
   Same M's, same Safety of Margin and on and on.
   Do yourself a favor , buy Rule#1 and read this one (if you really are curious) at book store and invest the money you save in a stock.



3. Most of these reviews only have a single review - the review for Payback Time.
   
   I don't like being toyed with. Your books are good, Phil - this was not necessary.



4. I've read Rule # 1 back when it first came out and I thought it was excellent. I'm about halfway done with Payback Time and so far 90% of the information is simply rehashed information from his first book. The one thing that appears to have changed is that MSN now apparently gives 10 year data for free, which was not available when Rule # 1 came out (back then you had to pay a third-party company to obtain 10-year data about a stock and MSN and Yahoo only offered 5-year data if I remember correctly). So if you haven't read either book and are wondering which one to pick up I would say go for the second one (Payback Time). If you've read Rule # 1, reading the second book certainly won't hurt for repetition sake, just don't expect any major new information. The concept of stockpiling is nothing revolutionary. Simply buy more shares when the price goes down. Wow. The one thing I did not like about Payback Time is how Phil is constantly directing the reader back to his website for every little piece of extra information. And he doesn't tell you what link on his site to click on for each piece of information so you end up randomly clicking on his site until you find what you're looking for (not to mention the fact that you have to register in order to use the site in the first place and it keeps on logging you out every few minutes for some reason).
   Having said that, I still have to give credit to Phil for his clear writing style. He has a special ability to take complex information and making it understandable to the average person. I also like the fact that he gives his email address in the book and encourages readers to contact him with any questions. I like that type of service. I will update this review as soon as I'm done reading the book.
   
   3/16/10:
   
   As a side note, I also have noticed, like others, that many of the raving reviews for this book sound fake (some almost sound like an infomercial) and are from users who have only reviewed a single item (i.e. this book). While I understand a person's desire to promote his/her book, it's too bad that authors are coming down to this level because pretty soon online reviews will become useless if you can't trust that they are coming from unbiased readers.



5. Phil Town did it again! Rule #1 was an absolute God send for me at a time when I needed some investment coaching. It really got me started in actual trading and combining the fundamental and technical aspects together. The best part of the book was it was so easy to read.
   
   The same can be expected of Payback Time. I couldn't wait to read it. It also proved to be an easy read and very easy to understand. Perfect for the person who would rather take the "long term" view on wonderful companies. After reading Payback Time and Rule #1 three times, I believe I will use the knowledge I have gained, and apply a combination of stategies. Trade the wonderful fast growth businesses so I can "stockpile" the wonderful high yielding/growth businesses.
   
   Thanks Phil, for the great education!
   
   Bryan Knepper
   Roanoke, Va.