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Being Right or Making Money
STAY A STEP AHEAD OF THE MARKETS BY REJECTING GUESSES ABOUT THE FUTURE AND TRUSTING TECHNIQUES THAT WORK
Today there are as many investment opinions as there are people. But as many a scorned investor can attest, predicting the future isn't easy. In fact, Being Right or Making Money, Third Edition explains that reliably predicting the future is often not even possible. The good news is that it isn't necessary either. Once you stop trying so hard to be right about the future, you can start making money.
Being Right or Making Money, Third Edition contains a position trading strategy that any serious investor will want to keep nearby. Using the unbiased, objective standard in this book, you can stay on-target for profit in all market conditions. You'll learn how to create asset allocation models in both stocks and bonds, how to make sense out of contrarian opinion, and how to use indicators to keep you focused, no matter what.
You won't find any shock-and-awe investing tactics in this book. Instead, Being Right or Making Money, Third Edition presents the solid trading model that has made Ned Davis Research Group a go-to source for market wisdom.
Today there are as many investment opinions as there are people. But as many a scorned investor can attest, predicting the future isn't easy. In fact, Being Right or Making Money, Third Edition explains that reliably predicting the future is often not even possible. The good news is that it isn't necessary either. Once you stop trying so hard to be right about the future, you can start making money.
Being Right or Making Money, Third Edition contains a position trading strategy that any serious investor will want to keep nearby. Using the unbiased, objective standard in this book, you can stay on-target for profit in all market conditions. You'll learn how to create asset allocation models in both stocks and bonds, how to make sense out of contrarian opinion, and how to use indicators to keep you focused, no matter what.
You won't find any shock-and-awe investing tactics in this book. Instead, Being Right or Making Money, Third Edition presents the solid trading model that has made Ned Davis Research Group a go-to source for market wisdom.
256 pages, Hardcover
First published October 1, 2014
26 people are currently reading
201 people want to read
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Displaying 1 - 7 of 7 reviews
August 27, 2022
The higher rating is that philosophically I am in agreement with how Ned Davis views investing. The interesting part of the book is that it was written in 2014, so we have had considerable new data since then. We had brief moments of energy independence and the problems with various alternative energies seem to be accurate. Electric will win but the build out is slow. My only criticism is the long definitions of the various trading indicators he has developed. If this was more applicable to why I read this book, I may have liked it more.
August 20, 2018
Ned Davis, the Senior Investment Strategist and founder of Ned Davis Research, has become legendary in the finance industry for his market letters combining fundamental data with technical indicators over the last 40 years. Without having the data to back it up I am also of the view that he’s often been quite correct in reading the market.
The name of the book refers to the practice of making forecasts (trying to predict what the market will do in the future, i.e. “being right”) versus developing an investment strategy that could make you money despite the fact that forecasting doesn’t work. In the introductory chapter Davis points to the keys to making money as being; using objective data instead of gut feeling, following a disciplined strategy, being flexible to adjust in response to changing environments and employing risk management practices to ensure mistakes don’t get out of hand.
The setup of this book is somewhat unusual. The first 4 chapters (or about 115 pages cover) the philosophical aspects of Davis methods, the practical aspects of how to build models to be able to trade financial markets and further examples of a market model for equities and bonds respectively. Then the remaining 3 chapters or 100 pages add on some somewhat unrelated thematic pieces on the risk for a bear market in 2014, the investment implications of demographic developments and whether the US will become energy independent. Most chapters are written by others than Ned Davies and I’m frankly not sure what to make of the second part of the book – is the reader being served samples of the type of research Ned Davis Research can perform? For me the first part is the core, the rest is an appendix – albeit with interesting features.
With the aim of “trying to get into harmony with the reality of the current numbers” Ned Davis Research builds multifactor models out of a number of indicators of different types to gain a trading view of a specific market. The indicators look to market prices, monetary policy, investor psychology etc. and some of the internal rules at Ned Davis Research are “don’t fight the tape”, “don’t fight the fed” and “be wary of the crowd at extremes”. The book gives examples of a number of the indicators in use, including graphs and some data on how they have faired historically. A full model is constructed by giving an indicator +1 if it is sending a positive signal, -1 if it sends a negative and 0 if it’s neutral. The models sums up to a total score, although some indicators could have higher weight than others. The combined score is the view on the specific market.
As evident we are talking about trading models with relatively short time horizons. The approach is data driven and very objective and in that way supports the trader in handling his own market psychology. With 40 years’ practice Davis and his coworkers have also thought long and deep on which indicators to use to read the market. The indicators used actually look to fairly different time horizons where most are trend following and some are shorter-term contrarian. As they have such different characters I wonder if it’s the best practice to simply sum them up. Also adding up to 35 indicators on top of each other to give one numeric grade of what is happening surely brings a valuable simplicity but could also in my view risk concealing what happens beneath the surface and as such obstruct deeper market understanding.
Although I’m not a trader myself I have huge respect for the work Ned Davis does as he looks to numbers and validates what makes money and what does not. I like the approach of reading what the market is doing instead of trying to guess what it will do. As a book however, the first part is relatively short and sketchy and the second fairly unnecessary. If Davis in the next edition would use all of his available space to share his insights into model building that could become a trading literature classic.
The name of the book refers to the practice of making forecasts (trying to predict what the market will do in the future, i.e. “being right”) versus developing an investment strategy that could make you money despite the fact that forecasting doesn’t work. In the introductory chapter Davis points to the keys to making money as being; using objective data instead of gut feeling, following a disciplined strategy, being flexible to adjust in response to changing environments and employing risk management practices to ensure mistakes don’t get out of hand.
The setup of this book is somewhat unusual. The first 4 chapters (or about 115 pages cover) the philosophical aspects of Davis methods, the practical aspects of how to build models to be able to trade financial markets and further examples of a market model for equities and bonds respectively. Then the remaining 3 chapters or 100 pages add on some somewhat unrelated thematic pieces on the risk for a bear market in 2014, the investment implications of demographic developments and whether the US will become energy independent. Most chapters are written by others than Ned Davies and I’m frankly not sure what to make of the second part of the book – is the reader being served samples of the type of research Ned Davis Research can perform? For me the first part is the core, the rest is an appendix – albeit with interesting features.
With the aim of “trying to get into harmony with the reality of the current numbers” Ned Davis Research builds multifactor models out of a number of indicators of different types to gain a trading view of a specific market. The indicators look to market prices, monetary policy, investor psychology etc. and some of the internal rules at Ned Davis Research are “don’t fight the tape”, “don’t fight the fed” and “be wary of the crowd at extremes”. The book gives examples of a number of the indicators in use, including graphs and some data on how they have faired historically. A full model is constructed by giving an indicator +1 if it is sending a positive signal, -1 if it sends a negative and 0 if it’s neutral. The models sums up to a total score, although some indicators could have higher weight than others. The combined score is the view on the specific market.
As evident we are talking about trading models with relatively short time horizons. The approach is data driven and very objective and in that way supports the trader in handling his own market psychology. With 40 years’ practice Davis and his coworkers have also thought long and deep on which indicators to use to read the market. The indicators used actually look to fairly different time horizons where most are trend following and some are shorter-term contrarian. As they have such different characters I wonder if it’s the best practice to simply sum them up. Also adding up to 35 indicators on top of each other to give one numeric grade of what is happening surely brings a valuable simplicity but could also in my view risk concealing what happens beneath the surface and as such obstruct deeper market understanding.
Although I’m not a trader myself I have huge respect for the work Ned Davis does as he looks to numbers and validates what makes money and what does not. I like the approach of reading what the market is doing instead of trying to guess what it will do. As a book however, the first part is relatively short and sketchy and the second fairly unnecessary. If Davis in the next edition would use all of his available space to share his insights into model building that could become a trading literature classic.
June 16, 2018
First off, my copy was distributed or written in 1991, so not sure if it changed or not during the other editions.
A three for sentimental reasons perhaps, really a two. As a former subscriber to his institutional services he does offer a mess of charts and graphs and advice. In all the years that I worked at an investment firm that used his services, I never really recall a time that felt like he made a call that I felt good about. This book to me is nice reading, but in a way too subjective or directed to investing non taxable assets. His model at the end is not right for individuals in my opinion. A large part of this book is taken up by his take on magazine covers that go contrary to the coming attractions......Too much, too subjective. I think that maybe he wrote it as a big ad for his service, though I got mine free as he gave them out to clients. His charts were great for client presentations, which to me were the benefit to his service. Read long time ago, but recently reread.
A three for sentimental reasons perhaps, really a two. As a former subscriber to his institutional services he does offer a mess of charts and graphs and advice. In all the years that I worked at an investment firm that used his services, I never really recall a time that felt like he made a call that I felt good about. This book to me is nice reading, but in a way too subjective or directed to investing non taxable assets. His model at the end is not right for individuals in my opinion. A large part of this book is taken up by his take on magazine covers that go contrary to the coming attractions......Too much, too subjective. I think that maybe he wrote it as a big ad for his service, though I got mine free as he gave them out to clients. His charts were great for client presentations, which to me were the benefit to his service. Read long time ago, but recently reread.
April 7, 2021
Great book by Nad Davis. If you are somewhat acquainted with the investing subject, it might help you look at some aspects of investing in a different way.
It seems to be very easy to read and understand but it has a lot of depth to it. You can read it and understand most of it even without prior investing knowledge, but you won't get the message.
I use this book as a refresher. After a year or two reading new books, new investing ideas, or just new market research, reading this book might open your eyes to something new. This is not a book from which you can learn a lot, this is a book that makes me think and helps to look at subjects in a different light, take a different perspective.
Actually, just read the book a second time. However, there are not many books I plan on reading 3rd time.
It seems to be very easy to read and understand but it has a lot of depth to it. You can read it and understand most of it even without prior investing knowledge, but you won't get the message.
I use this book as a refresher. After a year or two reading new books, new investing ideas, or just new market research, reading this book might open your eyes to something new. This is not a book from which you can learn a lot, this is a book that makes me think and helps to look at subjects in a different light, take a different perspective.
Actually, just read the book a second time. However, there are not many books I plan on reading 3rd time.
October 15, 2024
i did not find the answer,maybe diffrent edition.
in the book the art of execution by lee freeman shor,he mentioned:
Ned Davis in his book Being Right or Making Money, using the Dow Jones Industrial Average from 1929 to 1998, showed that the bulk of investors’losses in bear markets come in the final third of the fall.
As we covered earlier, Ned Davis, using the Dow Jones Industrial Average Index from 1929 to 1998, showed that the bulk of investors’ returns (more or less half) in bull markets come in the first third of a rally. He alsoshowed that the first half of a rally accounts for two-thirds of the overall return in a bull market.
August 27, 2018
This book lays out basic elements of investment philosophy and foundational elements of model building utilized by Ned Davis Research Group.
Ned Davis starts off my discussing the investment principles that he has learned over the years and covers some of the mistakes that he has made over the years. A lot of gems in that section echo the thinking of Warren Buffet and Howard Marks. He then proceeds to lay out his model-building process, covering inputs and indicators, as well as interpretation of the outputs.
In the following chapters several of his associates discuss some of the practical applications of the principles. Two chapters cover the firm's macroeconomic stock market model and a simple bond model. The discussions are detailed, with lots of graphs and examples.
Two additional chapters cover economic implications of the aging world population, with some helpful insights on what that means for the US economy, and energy independence of the US.
Finally, since this particular edition is dated 2013, Ned Davis makes a case for the possibility of a recession in 2014, based on the firm's models and other factors and indicators. The case is compelling, but as we now know there was no recession in 2014.
I found the book to be a helpful refresher. The frequent use of simple graphs and tables is a helpful visual addition to the narrative.
Ned Davis starts off my discussing the investment principles that he has learned over the years and covers some of the mistakes that he has made over the years. A lot of gems in that section echo the thinking of Warren Buffet and Howard Marks. He then proceeds to lay out his model-building process, covering inputs and indicators, as well as interpretation of the outputs.
In the following chapters several of his associates discuss some of the practical applications of the principles. Two chapters cover the firm's macroeconomic stock market model and a simple bond model. The discussions are detailed, with lots of graphs and examples.
Two additional chapters cover economic implications of the aging world population, with some helpful insights on what that means for the US economy, and energy independence of the US.
Finally, since this particular edition is dated 2013, Ned Davis makes a case for the possibility of a recession in 2014, based on the firm's models and other factors and indicators. The case is compelling, but as we now know there was no recession in 2014.
I found the book to be a helpful refresher. The frequent use of simple graphs and tables is a helpful visual addition to the narrative.
August 17, 2016
This is your typical "This is how we do it. Adapt our methodology at your own risk" type of book. It is definitely not for beginners (and it doesn't claim so) and for the most part is specialized in the US market (so much that it is difficult to apply the ideas/concepts in other markets (some will argue otherwise, I am sure!). The redeeming factor of this book are the last 2 chapters on the effects of the aging population on the economy and the "future" of oil/energy consumption.
Displaying 1 - 7 of 7 reviews