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The Battle for Investment Survival
"Loeb tells us to put all our eggs in one basket, and watch the basket."
-John RothchildFinancial Columnist, Time magazine
"This book is very special in my life. It is the very first Wall Street book I ever read. After reading 1,200 additional finance books, The Battle for Investment Survival's principles and concepts are still valid for consistent success."
-Victor Sperandeo Author of Trader Vic on Commodities
In The Battle for Investment Survival, the turf is Wall Street, the goal is to preserve your capital at all costs, and to win is to "make a killing without being killed." This memorable classic, originally written in 1935, offers a fresh perspective on investing from times past. The Battle for Investment Survival treats investors to a straightforward account of how to profit-and how to avoid profit loss-in what Loeb would describe as the constant tug-of-war between rising and falling markets.
-John RothchildFinancial Columnist, Time magazine
"This book is very special in my life. It is the very first Wall Street book I ever read. After reading 1,200 additional finance books, The Battle for Investment Survival's principles and concepts are still valid for consistent success."
-Victor Sperandeo Author of Trader Vic on Commodities
In The Battle for Investment Survival, the turf is Wall Street, the goal is to preserve your capital at all costs, and to win is to "make a killing without being killed." This memorable classic, originally written in 1935, offers a fresh perspective on investing from times past. The Battle for Investment Survival treats investors to a straightforward account of how to profit-and how to avoid profit loss-in what Loeb would describe as the constant tug-of-war between rising and falling markets.
320 pages, Hardcover
First published August 1, 1911
204 people are currently reading
988 people want to read
About the author
Gerald M. Loeb
10 books4 followersGerald Loeb was a founding partner of E.F. Hutton & Co., a renowned Wall Street trader and brokerage firm. Loeb promoted a view of the market as too risky to hold stocks for the long term in contrast to well known value investors. He also created the Gerald Loeb Award, given annually for excellence in various cateogories of financial journalism.
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Displaying 1 - 14 of 14 reviews
December 21, 2010
This is the best, most common sense book on investing I have ever read. In my 20 plus year career as a financial adviser this is the book that I would give to anyone interested in learning about the market. It speaks about how markets work, not buy an index fund.
December 21, 2012
A good read. Some of the key take aways for me:
(a) actively switching stocks
(b) cut loss and let the profit run
(c) purchasing power of money decreases with time/ inflation
(d) open interest in Buying may just mean exactly the opposite - i.e. it allows meaningful selling to take place
Don't expect formulas/methods. Just the author's thoughts and experience.
(a) actively switching stocks
(b) cut loss and let the profit run
(c) purchasing power of money decreases with time/ inflation
(d) open interest in Buying may just mean exactly the opposite - i.e. it allows meaningful selling to take place
Don't expect formulas/methods. Just the author's thoughts and experience.
August 22, 2018
Gerald Loeb was a well-known Wall Street profile for over 40 years. As a partner of the investment bank E.F. Hutton he broked stocks, but more importantly, he invested his own and other investors money. On top of all, he wrote popular columns in Barron’s and Wall Street Today about his investment strategies and how they kept him out of the market mayhem in 1929 to 1932. As Loeb had become somewhat of a celebrity by the time this book was released it was an instant hit. It has been in constant demand from traders henceforth with reprint after reprint.
Two years into Loeb’s career and just when he had started to manage clients’ money, the crash of 1923 wiped out most of the funds he had responsibility for. The losses and the apparent riskiness of stocks affected the young Loeb deeply and formed the investment philosophy he used going forward. In a stock market where you have to “fight for your survival” Loeb advised to only invest in the strongest leadership stock in upwards trending markets. If the market trend is down, stay in cash. If you are unsure if the trend is up or down, stay in cash. “The way to build long-term returns is through preservation of capital and home runs.”
Loeb’s book came out at about the same time that Ben Graham’s Security Analysis was released and in some ways it is the antithesis of Graham’s teachings. Loeb is almost agitational when it comes to valuation multiples. Intrinsic values might exist, or they might not, but while waiting for the market to, at some time in the distant future, accommodate your view of this highly uncertain value the investment was exposed to the whims of the market. For Loeb this was an invitation for disaster. I think what Loeb is really arguing against is a buy-and-hold-strategy rather than a value strategy per se. Given his 1923 experience and the vindication he received in 1929/32 this is no wonder. I also think the approach is highly relevant today. The market has historically moved in 15 to 20 year-long valuation driven cycles. Right now we are in a phase where the secular trend is sideways, with violent cyclical swings. Hence the risk of not being fully invested in the stock market at all times is low. In a few years from now the market will have grown into its valuation and then the risk of not being fully invested will be high. Hence, today is not the time to be a buy-and-holder, but in a few years it might be.
For anyone who has read a more modern day text on trend following or trading, most of the advice Loeb gives will be very familiar. This is no surprise since this is one of the creeds for all the later books. Loeb searched for a combination of roughly 5 - often cyclical - companies at the time with leadership positions in their line of business, with strong corporate financials and where the trend of the stock and the trading volume was favourable. He only bought stocks where the potential was massive or else the risk was that the investment would turn sour. He wrote down the “single ruling reason” for his investment and reviewed the investments after they have been terminated. Further, Loeb cut losses short and rode his winners. He advised to understand the psychology of the crowd but try not to join it. Timeless advice.
In its original 1935 edition the book had 33 chapters of 3 to 4 pages each. In the later 1965 edition another 45 similar sized chapters consisting of miscellaneous articles was added. Given that the organization of the original book is non-existent the randomness of the topics in the added chapters doesn’t change the character of the book – the text is confusing, repetitive and un-organized. The reading experience is saved by Loeb’s passion, deep market insight and real life examples. There are plenty of nuggets here but you have to dig hard for them.
There are few other books where the author is as in sync with the market. Loeb isn’t handing us his insights on a plate but there is plenty there for those who are ready to do the work.
Two years into Loeb’s career and just when he had started to manage clients’ money, the crash of 1923 wiped out most of the funds he had responsibility for. The losses and the apparent riskiness of stocks affected the young Loeb deeply and formed the investment philosophy he used going forward. In a stock market where you have to “fight for your survival” Loeb advised to only invest in the strongest leadership stock in upwards trending markets. If the market trend is down, stay in cash. If you are unsure if the trend is up or down, stay in cash. “The way to build long-term returns is through preservation of capital and home runs.”
Loeb’s book came out at about the same time that Ben Graham’s Security Analysis was released and in some ways it is the antithesis of Graham’s teachings. Loeb is almost agitational when it comes to valuation multiples. Intrinsic values might exist, or they might not, but while waiting for the market to, at some time in the distant future, accommodate your view of this highly uncertain value the investment was exposed to the whims of the market. For Loeb this was an invitation for disaster. I think what Loeb is really arguing against is a buy-and-hold-strategy rather than a value strategy per se. Given his 1923 experience and the vindication he received in 1929/32 this is no wonder. I also think the approach is highly relevant today. The market has historically moved in 15 to 20 year-long valuation driven cycles. Right now we are in a phase where the secular trend is sideways, with violent cyclical swings. Hence the risk of not being fully invested in the stock market at all times is low. In a few years from now the market will have grown into its valuation and then the risk of not being fully invested will be high. Hence, today is not the time to be a buy-and-holder, but in a few years it might be.
For anyone who has read a more modern day text on trend following or trading, most of the advice Loeb gives will be very familiar. This is no surprise since this is one of the creeds for all the later books. Loeb searched for a combination of roughly 5 - often cyclical - companies at the time with leadership positions in their line of business, with strong corporate financials and where the trend of the stock and the trading volume was favourable. He only bought stocks where the potential was massive or else the risk was that the investment would turn sour. He wrote down the “single ruling reason” for his investment and reviewed the investments after they have been terminated. Further, Loeb cut losses short and rode his winners. He advised to understand the psychology of the crowd but try not to join it. Timeless advice.
In its original 1935 edition the book had 33 chapters of 3 to 4 pages each. In the later 1965 edition another 45 similar sized chapters consisting of miscellaneous articles was added. Given that the organization of the original book is non-existent the randomness of the topics in the added chapters doesn’t change the character of the book – the text is confusing, repetitive and un-organized. The reading experience is saved by Loeb’s passion, deep market insight and real life examples. There are plenty of nuggets here but you have to dig hard for them.
There are few other books where the author is as in sync with the market. Loeb isn’t handing us his insights on a plate but there is plenty there for those who are ready to do the work.
December 30, 2015
The stock market does not change from one era to one another. Sure, the actual stocks that people are trading on the exchanges change names, but the behavior of the market remains the same because human nature does not change. People will always have fear and greed. Loeb will also encourage us to consider that there is no such thing as a risk-free investment, including holding cash, although there are indeed time periods in which it would be ideal to hold cash as an investment choice. People who want above-average returns will have to take above-average risks. In general, people need to pay a lot more attention to their portfolio than they do in practice. Some people spend a lot more time worrying about what type of food to eat than they do on their retirement portfolio. The title of this book is splendid: investing is a matter of survival. If you can participate in the stock market in good times and bad, then one probably has a good measure of prudence and a good understanding of risk. When risks are high, it's best to turn to the sidelines. This is a wonderful book and it helps one to gain a better perspective that there is really nothing "truly new" with regard to the stock market.
December 10, 2017
Written in another time when high frequency trading and shadow banking hadn't been thought of and even they had of, the technology did not exist to apply them.
That said, the advice in this book is as valid today as it was the day it was penned. Never, but never take a loss of greater than 10% and get out before then if the signs are bad. There is nothing wrong with making say twenty trades on a stock that goes from $40 to $100 as opposed to sitting on it. This takes some doing as usually each re-entry is at higher price than the last price sold. This method is an insurance against a sharp downtrend and the price paid is the increase on re-entry.
Loeb was a truly great trader/investor and I like the story of the investor who loses just about all his money investing on the advice of Loeb's firm, E.F. Hutton. The investor writes to Loeb and asks him if he (Loeb) can recover his money. Loeb then trades his account for a relatively short time and recovers all the client's losses.
The writing and layout leave a little to be desired but this is more than offset by the content.
That said, the advice in this book is as valid today as it was the day it was penned. Never, but never take a loss of greater than 10% and get out before then if the signs are bad. There is nothing wrong with making say twenty trades on a stock that goes from $40 to $100 as opposed to sitting on it. This takes some doing as usually each re-entry is at higher price than the last price sold. This method is an insurance against a sharp downtrend and the price paid is the increase on re-entry.
Loeb was a truly great trader/investor and I like the story of the investor who loses just about all his money investing on the advice of Loeb's firm, E.F. Hutton. The investor writes to Loeb and asks him if he (Loeb) can recover his money. Loeb then trades his account for a relatively short time and recovers all the client's losses.
The writing and layout leave a little to be desired but this is more than offset by the content.
March 9, 2023
What a great and timeless book. The ideas outlined in here for how to profit in stocks aren't for everyone, but Loeb doesn't shy away from that. The foundations of his conclusions, however, are impossible to refute. Particularly in times where government has turned into an inflation machine, he astutely talks about something very few financial advisors would dare touch. In short, there are no investments can protect you from inflation (though some assets may dampen the sting), and the only way to truly protect yourself is to outrun it. I would imagine the rise of passive investing would have made this book fall out of favor the last 20 years just like Buffet was out of favor in the late 90's when everyone was getting rich on tech stocks and people were calling his approach passe. However, in the coming years, I suspect people will gravitate back to this book, as passive investing and over diversification are false safe havens, as the author astutely points out. Every investor should read this book, it's a wonderful refreshing perspective that cuts against the grain of some of the more "modern" techniques for investing that have somehow sold risky approaches as "safe". This book offers a timeless perspective.
September 6, 2017
Its as though this famous successful man himself didnt know the value of businesses and instead relied on other parameters.
There was nothing interesting I learnt from the book - -
Conceptually, it seemed dated.
There was nothing interesting I learnt from the book - -
Conceptually, it seemed dated.
January 13, 2022
Full of investment insights and food for thought. Great addition to the tool kit. Definitely a key read for anyone who is considering managing their own investments.
Don't expect formulas/methods. Just the author's thoughts and experience.
Don't expect formulas/methods. Just the author's thoughts and experience.
January 6, 2018
Read it
Spot on in many respects. I wish i had read it 30 years ago, sure could have helped. Read this book in small bits so as the lessons stick.
Spot on in many respects. I wish i had read it 30 years ago, sure could have helped. Read this book in small bits so as the lessons stick.
January 6, 2020
Enjoyed reading and it taught me a few common sense ideas on selling
December 17, 2021
Любимая книга Билла о Неил
June 1, 2018
Most of the author's tips and advice remain valid till this day, because even though financial technologies might have advanced greatly, investor psychology has not changed all that much. For me, the biggest takeaways come from the author's time-tested strategies of short-term trading and principled approach to cutting losses, although his viewpoints might have been somewhat biased by his background as a stockbroker. While I did come across several thought-provoking ideas, a large part of the book is filled with anecdotes and personal experiences that don't seem related to stock investing per se.
March 21, 2016
You'd need pretty big balls to follow this guy's method to the letter. Provides a useful way of looking at things though, and some really good insights on why most investors fail.
May 17, 2019
"....faith in knowing that what you sell or what service you render is the best you know how and continually serving people in any way that will benefit them without directly seeking their business."
Displaying 1 - 14 of 14 reviews