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The Little Book of Market Myths: How to Profit by Avoiding the Investing Mistakes Everyone Else Makes
Exposes the truth about common investing myths and misconceptions and shows you how the truth shall set you free--to reap greater long-term and short-term gainsEverybody knows that a strong dollar equals a strong economy, bonds are safer than stocks, gold is a safe investment and that high PEs signal high risk...right? While such "common-sense" rules of thumb may work for a time as investment strategies, as "New York Times" and "Wall Street Journal" bestselling author, Ken Fisher, vividly demonstrates in this wise, informative, wholly entertaining new book, they'll always let you down in the long run. Ken exposes some of the most common--and deadly--myths investors swear by, and he demonstrates why the rules-of-thumb approach to investing may be robbing you of the kinds returns you hope for.Dubbed by "Investment Advisor" magazine one of the 30 most influential individuals of the last three decades, Fisher is Chairman, and CEO of a global money management firm with over $32 billion under managementFisher's "Forbes" column, "Portfolio Strategy," has been an extremely popular fixture in Forbes for more than a quarter century thanks to his many high-profile callsBrings together the best "bunks" by Wall Street's Master Debunker in a fun, easy-to-digest, bite-size formatMore than just a list of myths, Fisher meticulously explains of why each commonly held belief or strategy is dead wrong and how damaging it can be to your financial healthArmed with this book, investors can immediately identify major errors they may be committing and adjust their strategies for greater investing success
224 pages, Hardcover
First published January 9, 2013
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356 people want to read
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Displaying 1 - 28 of 28 reviews
September 13, 2019
Myths or common accepted misconceptions are something we don't pry to have but inevitably we are prone to unconsciously believe in some of them which defines us and our relation to different aspects of our lifes.
Relating to the financial market, our money-ridden mind has and embedded set of conceptions we believe to be true, however, if asked, we can not rationally explain the why. Ken Fisher tries to do so, explain the most common myths people think to be true and debunker the truth out of them.
While this sounds like a promising idea, its realization is what fells flat to me. Most myths are just plain and, although it throws a pretty amount of data to sustain its reasoning, it usually sounds flat and mansplaining to the reader. If we add this to its chaotic writing and chapter order, it results in a book whose ideas are interesting, but in itself is not worth reading.
I will in some future time post the main ideas here, or you can check other reviewers which will have laid them out in their review, and if you feel tempted to read, just tell me and I will save you a great amount of time. Thank me later.
Relating to the financial market, our money-ridden mind has and embedded set of conceptions we believe to be true, however, if asked, we can not rationally explain the why. Ken Fisher tries to do so, explain the most common myths people think to be true and debunker the truth out of them.
While this sounds like a promising idea, its realization is what fells flat to me. Most myths are just plain and, although it throws a pretty amount of data to sustain its reasoning, it usually sounds flat and mansplaining to the reader. If we add this to its chaotic writing and chapter order, it results in a book whose ideas are interesting, but in itself is not worth reading.
I will in some future time post the main ideas here, or you can check other reviewers which will have laid them out in their review, and if you feel tempted to read, just tell me and I will save you a great amount of time. Thank me later.
April 19, 2020
Interesting read. I managed to get a few good ideas, especially regarding the macroeconomic analysis of the markets. Mainly, the correlation between some indicators, like debt to GDP or unemployment and stock market performance.
All in all, it is interesting to read it as it debunks some of the most common myths there are among traders and portfolio managers.
All in all, it is interesting to read it as it debunks some of the most common myths there are among traders and portfolio managers.
August 21, 2018
The Little Book series is now 28 books old and has set out to prove all those early doubters wrong, simply by taking the difficult & complex out of financial matters. It doesn’t hurt, of course, to also have contributors such as Joel Greenblatt, John Bogle and Mark Mobius, to name just a few of the Little Book alumni roster. It has indeed become an unstoppable force and has already this year released two new titles. Having read most of the Little Books, I hold Joel Greenblatt’s maiden The Little Book That Still beats The Market from 2005 as the best one, closely followed by John Bogle’s Common Sense Investing” and James Montier’s “Behavioral Investing. A close contender to the medal podium, however, would be this addition to the series by Ken Fisher. It would be a loss to any investor to dismiss this as another rehash of old arguments. The Little Book of Market Myths occupies a crucial place in a time where the information avalanche has created an “Era of The Narrative”, where stories rule the investment landscape and with so many false truths and common knowledges leading people astray.
The author is first and foremost known for his “Portfolio Strategy” column in Forbes, which at 28 years and counting puts him at #3 for longest contributor in the history of the magazine. More importantly, however, he is also the founder & CEO of Fisher Investments, having successfully managed tens of billions of dollars for more than 25,000 clients since 1979. The second aspect – in addition to the early tutorial from father Philip Fisher – sets him up as an excellent choice for this particular book. Having staged a reputation as a staunch contrarian and spending the lion’s share of his Forbes-columns to disprove traditional wisdom, Fisher doesn’t lack ammunition. As a reader you get the feeling that the book could have run quite a number of pages longer, had it not been for the strict regimen of The Little Book diet.
The outline of the book is simply seventeen chapters each dealing with a particularly harmful market place myth. Among the highlights are Bonds Are Safer Than Stocks, Volatility and Only Volatility
and Stop-Losses Stop Losses. To me, though, Turmoil Troubles Stocks (chapter 15) by itself justifies the outlay for the book. Or, more specifically, the table coined “Never a dull moment”, listing major world (negative) events since 1934. This is an effort to show the prevalence of the true (?) myth that the strongest markets always climb a wall of worry. What Fisher does well – apart from sourcing the six-page long table – is to put this into context. “Profit motive isn’t sapped because humanity faces challenges. In fact, challenges and the need for innovation can be motivating factors for those willing to take risks to chase future profits. Capital markets are resilient because humanity is resilient”. This is a welcome refresh from the often-used analogy of the market being a cold- hearted monster that devours human suffering. Then, as you feel the author is doing all investors – the full- and part-timer alike – a big favour by enabling us to de-learn false truths, the chapter on the myth of small cap value comes up (The Perma- Superiority of Small Cap Value). In it, Fisher tries to debunk one of the more established rules of finance, that over time small-cap outperforms large caps and value outperforms the rest (especially growth). He tries to do it by pointing at huge bid- ask spreads of the 1930s as polluting the data, increased supply of small companies and yearly swings in performance. None is too convincing, and I am left with the thought that the opportunity to shoot down the fattest bird there is in finance was just too compelling of an opportunity to pass up on for this consummate contrarian.
As the financial world is dominated by greed and fear, stories that play on people’s emotions have been a cornerstone of markets since long before the tulip mania. So naturally there is a plentiful smorgasbord of myths to choose from. To a very large extent Fisher has selected wisely, but I do wish he had included The Myth of Economic Growth And Stock Prices; The Myth of Forward P/e and Predictability and; The Myth of the Omnipotence of Central Banks. Perhaps that last one will be Little Book # 45 around the year 2020?
The author is first and foremost known for his “Portfolio Strategy” column in Forbes, which at 28 years and counting puts him at #3 for longest contributor in the history of the magazine. More importantly, however, he is also the founder & CEO of Fisher Investments, having successfully managed tens of billions of dollars for more than 25,000 clients since 1979. The second aspect – in addition to the early tutorial from father Philip Fisher – sets him up as an excellent choice for this particular book. Having staged a reputation as a staunch contrarian and spending the lion’s share of his Forbes-columns to disprove traditional wisdom, Fisher doesn’t lack ammunition. As a reader you get the feeling that the book could have run quite a number of pages longer, had it not been for the strict regimen of The Little Book diet.
The outline of the book is simply seventeen chapters each dealing with a particularly harmful market place myth. Among the highlights are Bonds Are Safer Than Stocks, Volatility and Only Volatility
and Stop-Losses Stop Losses. To me, though, Turmoil Troubles Stocks (chapter 15) by itself justifies the outlay for the book. Or, more specifically, the table coined “Never a dull moment”, listing major world (negative) events since 1934. This is an effort to show the prevalence of the true (?) myth that the strongest markets always climb a wall of worry. What Fisher does well – apart from sourcing the six-page long table – is to put this into context. “Profit motive isn’t sapped because humanity faces challenges. In fact, challenges and the need for innovation can be motivating factors for those willing to take risks to chase future profits. Capital markets are resilient because humanity is resilient”. This is a welcome refresh from the often-used analogy of the market being a cold- hearted monster that devours human suffering. Then, as you feel the author is doing all investors – the full- and part-timer alike – a big favour by enabling us to de-learn false truths, the chapter on the myth of small cap value comes up (The Perma- Superiority of Small Cap Value). In it, Fisher tries to debunk one of the more established rules of finance, that over time small-cap outperforms large caps and value outperforms the rest (especially growth). He tries to do it by pointing at huge bid- ask spreads of the 1930s as polluting the data, increased supply of small companies and yearly swings in performance. None is too convincing, and I am left with the thought that the opportunity to shoot down the fattest bird there is in finance was just too compelling of an opportunity to pass up on for this consummate contrarian.
As the financial world is dominated by greed and fear, stories that play on people’s emotions have been a cornerstone of markets since long before the tulip mania. So naturally there is a plentiful smorgasbord of myths to choose from. To a very large extent Fisher has selected wisely, but I do wish he had included The Myth of Economic Growth And Stock Prices; The Myth of Forward P/e and Predictability and; The Myth of the Omnipotence of Central Banks. Perhaps that last one will be Little Book # 45 around the year 2020?
January 1, 2021
The Little Book of Market Myths presents common investing misconceptions in bite-size pieces - A suitable read for the novice investor. If you are looking for detailed investment strategies, then this will not be the right book for you.
Key Takeaways:
1) Bonds are not safer than stocks - In the long term, stocks offer higher returns over fixed income at lower volatility. To attain the long-term superior returns of stocks, one must accept a higher degree of short-term volatility.
2) There are no short-cuts in asset allocation - Determining the percentage of your stock portfolio by subtracting your age from 100 is too simplistic. Age is not the sole factor in one's asset allocation strategy and must be considered alongside return expectations, cash flow needs, current circumstances and other unique personal factors.
3) Stocks are not more volatile than ever - Do not fear volatility. Upside volatility does not occur without the downside and in the long term, upside volatility happens more often.
4) It is not possible to have capital preservation and capital growth at the same time - Capital growth requires some form of capital loss. Over the long term, however, capital preservation results from the growth of one's investment portfolio.
5) Depending on high-dividend yielding stocks is not a fail-safe retirement strategy - Dividends are not guaranteed and a higher dividend yield can be a red-flag (Think junk-rated bonds). Instead, focus on total returns, i.e. price appreciation plus dividends.
6) The idea of waiting for an all-clear signal before buying into a stock is pure illusion - It is impossible to time the market.
7) Stop-losses do not guarantee protection against losses - A stop-loss strategy assumes that stocks are serially correlated, i.e a falling stock will keep falling and vice versa (Untrue!). Stop-losses increases the odds that one will miss out on the upside and increases transaction costs. What is the right amoun to stop loss and why? Why did that particular stock fall? Is it due to the broader marker?
Key Takeaways:
1) Bonds are not safer than stocks - In the long term, stocks offer higher returns over fixed income at lower volatility. To attain the long-term superior returns of stocks, one must accept a higher degree of short-term volatility.
2) There are no short-cuts in asset allocation - Determining the percentage of your stock portfolio by subtracting your age from 100 is too simplistic. Age is not the sole factor in one's asset allocation strategy and must be considered alongside return expectations, cash flow needs, current circumstances and other unique personal factors.
3) Stocks are not more volatile than ever - Do not fear volatility. Upside volatility does not occur without the downside and in the long term, upside volatility happens more often.
4) It is not possible to have capital preservation and capital growth at the same time - Capital growth requires some form of capital loss. Over the long term, however, capital preservation results from the growth of one's investment portfolio.
5) Depending on high-dividend yielding stocks is not a fail-safe retirement strategy - Dividends are not guaranteed and a higher dividend yield can be a red-flag (Think junk-rated bonds). Instead, focus on total returns, i.e. price appreciation plus dividends.
6) The idea of waiting for an all-clear signal before buying into a stock is pure illusion - It is impossible to time the market.
7) Stop-losses do not guarantee protection against losses - A stop-loss strategy assumes that stocks are serially correlated, i.e a falling stock will keep falling and vice versa (Untrue!). Stop-losses increases the odds that one will miss out on the upside and increases transaction costs. What is the right amoun to stop loss and why? Why did that particular stock fall? Is it due to the broader marker?
This entire review has been hidden because of spoilers.
October 25, 2021
I enjoy the Little Book Big Profits series. Brief books that can be read in a day or two and distills investment wisdom from major finance figures. This one by Kenneth Fisher who wrote a "Portfolio Strategy" column for Forbes for over 30 years analyzes the market myths that everyone believes, but are wrong. Each chapter (which usually has fewer than 10 pages) describes a myth and then provides solid evidence debunking it. The main thesis is question everything; especially stuff "everyone knows>"
The chapters are:
Bonds are Safer than Stocks
Asset Allocation Short Cuts
Volatility and Only Volatility
More Volatile Than Ever
The Holy Grail--Capital Preservation and Growth
The GDP-Stock Mismatch Crash
10% Forever!
High Dividends for Sure Income
The Perma-Superiority of Small-Cap value
Wait Until You're Sure
Stop-Losses Stop Losses
High Unemployment Kills Stocks
Over-Indebted America
Strong Dollar, Strong Stocks
Turmoil Troubles Stocks
News You Can Use
Too Good to Be True
The chapters are:
Bonds are Safer than Stocks
Asset Allocation Short Cuts
Volatility and Only Volatility
More Volatile Than Ever
The Holy Grail--Capital Preservation and Growth
The GDP-Stock Mismatch Crash
10% Forever!
High Dividends for Sure Income
The Perma-Superiority of Small-Cap value
Wait Until You're Sure
Stop-Losses Stop Losses
High Unemployment Kills Stocks
Over-Indebted America
Strong Dollar, Strong Stocks
Turmoil Troubles Stocks
News You Can Use
Too Good to Be True
April 5, 2018
This is a pretty good book that distills and dispels many different prevailing notions about the stock market. It is done on a chapter by chapter basis. The reading is really short but yet and still the author manages to repeat things many times over but that's not necessarily a bad thing because some things are worth repeating and remembering. Overall it was a quick read, and a good but not great experience.
March 30, 2020
This was most helpful book, has many great topics of understanding of what risk is, are bonds safe and many more, like effect of unemployment, strong dollar, debt, volatility, etc. I have filled the book with bookmarks ;)
April 17, 2020
I like to read books about investment despite having read tens of them and having a degree in finance because there is always something you catch, that you haven't paid so much attention to before, or reminding you of something.
This book has a few "reminders" like that for me.
This book has a few "reminders" like that for me.
November 18, 2023
i think serene's review here did a wonderful job of showing the interesting stuff in the book
What i liked most of all
- Bonds are not safer than stocks
- Stocks are not more volatile than ever
- Do not fear volatility - upside volatility happens more often
July 14, 2017
Helpful debunker of common bromides about federal government debt, the dollar and volatility.
January 2, 2019
a quick read and affirmed most of my views on the markets
February 8, 2019
Myth - busters for long held misconceptions and notions.
March 1, 2019
Ok, mostly easy to follow, some myths more obvious than others. Annoying writing style includes way too many exclamation points.
February 5, 2020
A pretty good book on investment myths. Good focus on long term thinking.
March 22, 2021
Good for beginners.
May 22, 2021
Very good short read. Engaging and highly digestible.
November 24, 2021
I think I am just going to keep this on my desk forever.
August 23, 2024
Without the onion example this would be a three-star book
July 30, 2020
The universal truths about something in investment is a myth. Questions everything when in regards of investment, including the one that you already know. Most time, you proven right and when it is wrong, there is blissful awareness leading to that too.
A nice book to read in the end of July.
A nice book to read in the end of July.
January 24, 2014
can't even given more than a star...one of the worst book of all time..author skillfully using historically data to show 17 myths about stock market. But I found a common theme of this book where everyone could be misled..i) author wants you to keep buying stocks for a long term..(but not many companies can last as the investors wish..ii) authors overlooked the problems of massive agency problems in which only CEO/VPs are only looking out for themselves...iii) it seems like data, but authors do not use research datas to show his many myths..iv) authors blatantly advised individuals to buy stocks because they are always up 70% of the time..v) authors injected the idea of "free market is good"..but it ain't because the CSR are mostly not in place, not within many US companies..vi) author stated that US debt ratio is small, but that is a "was" comparing to now as in 2013/2014, it almost slap the faces of the author..vii) author stated that there was nothing wrong with public debt of USA...I have never seen anyone blatantly promoting debt is good..yes, some debt is good, but some debts are simply out of control. vii) Author stated that Andrew Jackson blew it right after it pays the debt..but you know what..Andrew Jackson was right, USA has lost its' financial sovereignty the moment they established privately owned (7 companies including Rothschild, JPM, etc) Central Bank..I spent about 1 hour just to finish this book and it disguises me....
February 8, 2013
The book is 17 independent chapters of advice to overcome common misconceptions when investing in the stock market. I almost completely skipped about five chapters, but forced myself to read every last piece of ink in the book; I'm getting tough in my olde age. I fault the series the book is in, more than Ken Fisher, for my lack of enthrallment. The book is a member of "The Little Book of _______" series of investing books. The chapters are short, which I don't mind, but the choppiness of the overall ride I do mind. Even in the preface, the author advises to bounce around the chapters, and maybe even skip a few. It's not the fun ride from beginning to end that The Millionaire Next Door was when it came out "a hundred years ago".
On the other hand, I think the advice is very sound, being empirically based, and maybe even will save some readers' bacon, if readers will only heed his advice.
On the other hand, I think the advice is very sound, being empirically based, and maybe even will save some readers' bacon, if readers will only heed his advice.
June 19, 2016
Author confirmed what we at our office know and have seen for 30+ years -- it is best to have a trued & tried advisor like Steve Campbell (my employer) to help you determine the best stocks & mutual funds to invest in & it is important to have a % of your assets in some stock-related investments...knowing that humans react more to down years than ups, media reacts to bad news more than good to increase watchers (then they can charge higher for advertisers), & stock growth is indicative of the resilient business builders & the future (not the past or present value of the U.S. dollar, employment rate, etc.). Great book to build your confidence in the U.S. and confirm that our emotions and the media aren't good things to rely on when investing for the future.
April 14, 2015
Not written in a very interesting way. But I was still able to pick up a few novel ideas from this book. So I guess it was still worth the read. The book is definitely not worth it's full price. Also, I do not recommend this book for the more advanced readers; the lessons in this book would be to basic.
July 15, 2016
More for the novice investor, but also a good reminder of our in-built heuristics.
Most of the topics were meant for the part time trader or investor.
But just 1 chapter - that on Debt/ GDP and sovereign debt was superb. Ken had a very good perspective to most things and in a Howard Marks kind of way, knows how to distill stuff to the simple understanding.
Most of the topics were meant for the part time trader or investor.
But just 1 chapter - that on Debt/ GDP and sovereign debt was superb. Ken had a very good perspective to most things and in a Howard Marks kind of way, knows how to distill stuff to the simple understanding.
September 13, 2016
Two stars for its critical thinking. This book checked many popular concepts or ideas in investors. The author showed that some prevailing ideas were not the truths. However, the author failed to point out what were correct and to what you should stick. Without these, how could an investor find a proper strategy?
October 20, 2013
เขียนโดยลูกของ Philip Arthur Fisher นักลงทุนชื่อดัง
ข้างในจะบอกถึงความเชื่อที่มักจะเชื่อกันอย่างผิด ๆ ในการลงทุน
ส่วนตัวคิดว่าค่อนข้างคุ้มค่าเงินที่จ่ายไป
ข้างในจะบอกถึงความเชื่อที่มักจะเชื่อกันอย่างผิด ๆ ในการลงทุน
ส่วนตัวคิดว่าค่อนข้างคุ้มค่าเงินที่จ่ายไป
July 31, 2014
listened to this book: good advice; debt chapters were particularly interesting.
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