Free Capital: How 12 private investors made millions in the stock market

by Guy Thomas

Wouldn't life be better if you were free of the daily grind - the conventional job and boss - and instead succeeded or failed purely on the merits of your own investment choices? Free Capital is a window into this world.Based on a series of interviews, it outlines the investing strategies, wisdom and lifestyles of 12 highly successful private investors. Each of them has accumulated £1m or more - in most cases considerably more - mainly from stock market investment. Six are 'ISA millionaires' who have £1m or more in a tax-free ISA, a result which is arithmetically impossible without exceptional investment returns.Some have several academic degrees or strong City backgrounds; others left school with few qualifications and are entirely self-taught as investors. Some invest most of their money in very few shares and hold them for years at a time; others make dozens of trades every day, and hold them for at most a few hours. Some are inveterate networkers, who spend their day talking to managers at companies in which they invest; for others a share is just a symbol on a screen, and a price chart shows most of what they need to know to make their trading decisions.Free capital - money surplus to immediate living expenses - is the raw material with which these investors work. It can also be thought of as their psychological habitat, free from the petty tribulations of office politics. Lastly, free capital describes the footloose nature of their assets, which can be quickly redirected towards any type of investment anywhere in the world, without the constraints which institutional investors often face.Although it presents many advanced insights and valuable investment hints, this is not an overly technical book. It offers practical ideas and inspiration, with revealing detail and minimal jargon, making it an indispensable read for novice and experienced investors alike.

Genres: Finance, Nonfiction, Business

371 pages, Kindle Edition

First published March 24, 2011

Reviews

[Löplip · Rating 2 out of 5]

Kort samanfattning av boken: Alla vägar bär till Rom. Det finns ingen rätt eller fel strategi på börsen och du får inga stilpoäng för att vara superintelligent, det enda du får betalt för är om du har rätt eller fel. Simple as that.

Jag tyckte att boken var tråkig och formell att läsa, författaren ställde liknande frågor till alla intervjuobjekt. Tror man hade kunnat få ut mycket mer kunskap av de intervjuade om de fick grotta in sig ännu mer i den edge dom uppfattar att dom har mot marknaden, vilket har gjort dem framgångsrika.

Tycker också att författaren faller för lagen av små tal när han i slutet av boken drar slutsatser grundat på fakta från de 12 intervjuobjekten. Tycker att beslutsunderlaget (vilket han dock diskuterar i "forskningsmetoder") kan vara missvisande, speciellt för oinsatta människor.

[Thomas · Rating 5 out of 5]

Boots-on-the-ground book focused on the practitioner. Useful, inspirational.

My review can be found here http://pembridgecap.com/?p=5773

[Milan · Rating 4 out of 5]

Guy Thomas profiles 12 investors in this book who are mainly living on their investing acumen. They have different investing styles and invest in different kind of securities but predominantly UK small cap stocks. This not a how-to invest kind of book but shows the ups and downs of these 12 investors during their investing lives. If you are an investor, you will surely identify with one of these men. They have their different techniques of picking and selling stocks. At the end of the book, the author tries to summarise the traits which make these investors successful. But most of them approach investing in their own unique ways.

There are may different approaches to investing which we can choose but there is always more to learn and Free Capital provides a glimpse into the lives of these men which can add to our investment perspective.

[Mitesh · Rating 3 out of 5]

Interview summaries of 12 successful investors from UK. Not detailed enough to learn something transferable, especially in the Indian context.

[Gaurav Bhagwat · Rating 3 out of 5]

'Free Capital' is about the investment strategies and lifestyle of 12 independent private investors in UK. Author has picked the 12 private full-time investors in UK, interviewed them and then summarised their journey as a full time investor, investment philosophy and strategies, and day-to-day life as investors.

It's a good book giving a glimpse of life of full-time investors. It's not 'How-to-be-a-better-stock-picker' type of books. While the book touches some technical aspects, the ideas are generic in nature - power of concentrated portfolio, minimal use of leverage, development of circle of competence, minimal transaction costs, utility of access to management etc. Furthermore, author has categorised investors into several buckets - top-down investors (geographers), bottom-up investors (surveyors), activists as well as eclectics who don't fall into either of the categories. The list comprises of fundamental investors as well as day-trader indulging in varying instruments like shares, Contracts for Difference (CFDs). They indulge in activities like pure long-form investing as well as speculative spread betting with time horizon ranging from a day to years.

Since the list is limited to UK markets, the book touches on some regulatory aspects in UK. However, in my opinion, the period of 5-8 years is too short to evaluate the performance of independent full-time investors. The author should have covered minimum 10-15 years which would have ensured survival over full 2-3 market cycles. Furthermore, it would have been interesting to know more about the correlation between the pre-investing professional background and investment career. Several of these investors started their businesses before venturing into full-time investing and such experience would have definitely benefited them into their investing career. Author has briefly touched these points but a detailed coverage would have been helpful.

[Daniel Ottenwalder · Rating 4 out of 5]

Finally got through to finishing this title I throughly enjoyed the different case studies of investors. Key lesson is there is no single blueprint for being a successful investor. Yet there are some similar traits in terms of life choices and chances most were long term oriented shaping the present for the future. Most didn’t enjoy their jobs preferring independent thinking on investments. Attitude wise they mostly viewed money as a source of quiet freedom not a means to consumption, stayed away from leverage and enjoyed the process of investing more than proceeds.

Working method wise they focused on concentrated portfolios with smaller companies and liked to work alone not taking advice from wealth managers etc.

[Paul Barnes · Rating 5 out of 5]

Inspiring, in the same vein as Jack Schwager's Market Wizards books, but more relatable as it deals with people who have invested their own savings, rather than trading other people's money.

Includes insights on the psychological traits required for successful investment and how different these are to those required to fit in in most workplaces.

Also relevant to the FIRE (financial independence retire early) crowd - both for the importance of saving a high proportion of income and for the insights on the importance of being able to stand aside from the crowd.

[Wayne Jones · Rating 5 out of 5]

Private investors as real examples rather than Hollywood hedge fund managers

Written in a similar vein to John Train’s Money Masters the author covers unknown private investors. A handy resource for investors looking for ‘real world’ examples rather than Hollywood style hedge fund managers with billions under management. My takeaway: concentrated investing in small companies with very little leverage appears to be a good way to start on the path to financial independence.

[Matt · Rating 3 out of 5]

For some of the 12 investors, I could see that their processes were very good and I would bet on them to continue outperforming, but for a lot of them I was unconvinced.

The quoted track records are not exact and often were for only 5-8 years, meaning luck could easily be a significant factor.

Being more of a bottom-up investor myself, I wish there were more on investors who focused on fundamentals and specific company analysis.

[Bhuvanesh Kandasamy · Rating 3 out of 5]

The book talks about a few private investors who made millions on their own in the market. Most of the investors in the book had an advantage in terms of their education, professional experience and relationships which helped them in investing successfully. The author does a great job in structuring the book by dividing the investors into different styles (geographers, surveyors, activists and eclectics) and suggests one should choose what works best for them.

[George · Rating 1 out of 5]

A few interesting characters, Gyllenhammar in particular. But most were short term, quick, news oriented traders whose philosophies don’t really resonate. Quick read, nothing very memorable. I liked the follow up section - the varying results shows how hard it is to build a sustainable process, something I felt the early profiles lacked. I also like John the ft columnist and the excerpt on Bolivian railway owner.

[Shashank · Rating 4 out of 5]

Highly recommended by a fellow private investor and the book does not disappoint. Gives a lot of ideas to shape the thesis that one uses as well as additional ideas on side income. The theme of financial independence runs throughout the book and the stories of Vernon, John Lee, Eric and Owen blow you away with the simplicity of their approach and their steadfastness of conviction

[Dave B. · Rating 5 out of 5]

Interesting window into the fact that there are different ways to be successful in the stock market.

However to be successful you do need to be sure of your own mind be willing to be independent and super focused. This does come out in a way. Also helps lot to know what your advantage(s) in investing are.

[Jeff Shinneman · Rating 5 out of 5]

Wonderful and quite the inspiring book. Loved every chapter and I am envious that I've not yet made it to the point where I am a full-time private investor, but thanks to the book I know what I'm aiming for now. I'm in the US so there was lot of language I'm not familiar with such as types of retirement accounts, but I enjoyed looking them up and expanding my horizons because of it.

[Zeeshan · Rating 5 out of 5]

Being a full time private investor is a pinnacle of financial achievement. This book takes us through the journey of 12 private investors with different backgrounds and investment approaches. The author however draws the behavioural similarities which makes this an enjoyable read.

[Rik Tipton · Rating 5 out of 5]

Fantastic book showing what it is possible to achieve as a private investor. The investors profiled have a variety of different styles, so there should be at least one whose style will resonate well with your own investing style.

[Rasik Rai · Rating 3 out of 5]

A book on investing styles

The covers methods adopted by select investors with diverse backgrounds and investment methodology. While the chapters help in relating to the process and investing style there arr many aspects which are related to Indian markets.

[Vibhor Jain · Rating 5 out of 5]

The author captures strategies and styles of 12 distinct investors from UK. This is a good book to try and see what worked for others and is part of your style. At the same time, you can identify areas for improvement for yourself.
This is a compact and to the point book on the topic.

[Heikki Keskiväli · Rating 3 out of 5]

Read this due to Ian Cassel’s foreword. Big fan. Always interesting to read about different investment styles but few truly insightful chapters in this one. Could work better for beginners still seeking their preferred style

[Rohit Kadam · Rating 3 out of 5]

Good onetime read for those managing their own PA

Good onetime read for those managing their own PA. Some of the stories are inspirational to say the least. Happy reading.

[Pooja · Rating 4 out of 5]

Inspiring and detailed insight into these 12 successful retail investors.

[P Kumaresh · Rating 4 out of 5]

Interesting read

Though not a book on how to invest per se, it details the investment methodology and perspectives of a few private investors which can motivate one...

[Alex Pal. · Rating 4 out of 5]

This book follow the stories of 12 private (who started small) investors, and how they manage to rich levels of riches / financial freedom.

[Praneesh K · Rating 4 out of 5]

Interesting stories. All UK based.

[Anuraj Pandey · Rating 5 out of 5]

Very good one time listen
No hard copy
Can be relistened later

[Harsh Thaker · Rating 4 out of 5]

Good account on how 12 private investors living in UK entered the stock markets from various walks of life and how investing become a profession / passion from just a hobby.

[van1998 · Rating 4 out of 5]

ควรถือหุ้นไม่เกิน 10 ตัว เพื่อที่คุณจะมีเวลาใส่ใจรู้จักมันจริงๆ ลองคิดสภาพคุณมีฮาเร็มผู้หญิง 40 คน คุณรู้จักพวกเธอดีจริงๆมั้ย

[Hugo Maugard · Rating 2 out of 5]

A compilation of investors journeys towards financial independence that reads easily but brings little actionable insights.
Foreword by Ian Cassel was the best part of the book.

[Sa6331 · Rating 4 out of 5]

A pretty good read outlining various strategies used by private investors. This book profiles various investors who went private after amassing enough capital to become full-time investors. Each profile shows a unique strategy used and shows the strengths each investor leverages to make money in the market.

[Jp Picard · Rating 4 out of 5]

Really enjoyed the book. Short read, you can power through in 1 week without too much effort.

Follows different types of investors, so not all of them will be interesting to you, but all offer valuable insights into their processes and strategies.

I've written my 10 most important lessons here: https://goforgrowthco.substack.com/p/...