Investment Book Review: F Wall Street
The last proper investment book review I wrote was on The Art of Short Selling. Since then I’ve read a few investing and non investing books but of the investment books I went through, nothing was worth writing about.
Too Many Bad Investment Books On the Market – How About F Wall Street
The Only Three Questions that Count by Ken Fisher was rubbish and I gave up half way. I didn’t find it helpful in any investing or behavioral finance areas. The foreword by Jim Cramer should have rung an alarm. I much prefer Philip Fisher’s Common Stocks and Uncommon Profits.
I also would have enjoyed Contrarian Investment Strategies a lot more had it not been so redundant.
So a big pile of frustration was lifted when I received F Wall Street: Joe Ponzio’s No-Nonsense Approach to Value Investing For the Rest of Us. Forget Wall Street? Fudge Wall Street? or what ever you wish to call Wall Street, F Wall Street provides an indepth look and discussion of what Wall Street is really after (your money), how you are better off investing on your own, how to value businesses, how to manage your portfolio and more. Let me try and go through it briefly to whet your curiosity.
F Wall Street
This book is targeted towards the beginner to intermediate investor but is still a great read for the advanced. It is an easy to read book that doesn’t try to lose you in jargon and an overwhelming mess of formulas and symbols.
What I especially liked about the book is how it addresses many of the topics that other investing books do a terrible job of or refuse to go into. Topics such as how to value a business, how much to buy, tracking your businesses and when to sell.
The book is structured into four sections.
The first part deals with the basics. Issues such as Wall Street myths, stock market perceptions, mutual funds, risk and how businesses and their stock grow. Joe is able to take the boring and dryness out of the common finance topics and explain it in a clear and easy to understand manner. The simple to understand examples certainly do help in conveying the message.
Second, it looks at how to approach investing from a business perspective. Meaning, stocks are small pieces of business. Not speculative lottery tickets. Joe introduces us to the concept of “price follows value” as well as how to value a business by reading the financial statements.
Again, even a high schooler would do better in school to read this book when it comes to ease of understanding.
Are you still apprehensive and overwhelmed when thinking about financial statements? Then start reading this book.
It continues on to a simple yet detailed and full blown discussion of Buffett’s owner earnings, with examples in JNJ, MSFT and ABT. Joe also kindly explains how to use Excel’s present value function. I’ve yet to come across any other investing book that tries to help you calculate the intrinsic value of a company like this book does.
I found the third section to be very interesting. All about managing a portfolio.
When to buy, how much to buy, keeping track of your businesses, when to sell and a good section on workouts and arbitrage. My first arbitrage of Tribune corp is also in the book 🙂
The final and fourth part discusses the psychological aspect of investing. Investors are classified as “The General Conventionalist”, “The Enterprising Conventionalist”, “The Safety Seeker” and “The Non-Conventionalist”. As I’ve mentioned a few times long ago, an investor is successful when they understand who they are and what style they fit. A nice look at bonds and patience wraps up the book.
In case you haven’t noticed, I really enjoyed F Wall Street. I didn’t have the time to read it in one sitting, but it took about 6-7 20min sessions to see it through.
This book is now my number 1 or 2 recommendation for all new to intermediate investors and earns its place on my very selective recommended reading sidebar, where even The Intelligent Investor doesn’t have a place.