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A Zebra in Lion Country: Ralph Wanger's Investment Survival Guide
The renowned, iconoclastic head of the Acorn Fund shares his profit-maximizing, risk-minimizing investment advice in a book as irreverent as it is smart.
When "USA Today" asked a group of prominent professional portfolio managers whom they would choose to manage their personal wealth, the person most often cited was Ralph Wanger (Warren Buffett came in second). Hailed by both "Newsweek" and "U.S. News & World Report" as the "dean" of small-cap investing, Ralph Wanger explains the principles of investing in small, rapidly growing companies whose stocks will yield well-above-average returns.
Investors are like zebras in lion country: They must settle for meager pickings by sticking in the middle of the herd, or seek richer rewards at the outer edge, where hungry lions lurk. Wanger shows investors -- whether they are investing in mutual funds or buying stocks on their own -- how to achieve the right balance of safety and risk to survive and prosper in the investment jungle. Destined to become a classic in the field of investing, "A Zebra in Lion Country" is as entertaining as it is instructive.
252 pages, Hardcover
First published April 21, 1997
33 people are currently reading
1053 people want to read
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Displaying 1 - 20 of 20 reviews
June 12, 2021
There are dozens of books on Value investing/stock selection, and most of them rejig the same few tenets over and over again. This book stands out by managing to offer some interesting insights that other books don't cover
1) Unlike other books, Wanger doesn't beat up the poor MF managers, and realizes that if 90% of the market is controlled by MF money, it follows that most of them will underperform the broader index
2) He's realistic about retail/individual investors (ala you and me) having the patience, diligence and access to resources (to companies/to markets/macro economic data) to claim to beat professionals, and establishes that while a few individuals may possess the ability to beat pros, most of us are better sticking to either a Index fund or choose a well known professional.
The book is peppered with some dry humor from time to time, and is a breezy read. Id mark it among the top book ive read in the Value investing space.
1) Unlike other books, Wanger doesn't beat up the poor MF managers, and realizes that if 90% of the market is controlled by MF money, it follows that most of them will underperform the broader index
2) He's realistic about retail/individual investors (ala you and me) having the patience, diligence and access to resources (to companies/to markets/macro economic data) to claim to beat professionals, and establishes that while a few individuals may possess the ability to beat pros, most of us are better sticking to either a Index fund or choose a well known professional.
The book is peppered with some dry humor from time to time, and is a breezy read. Id mark it among the top book ive read in the Value investing space.
July 20, 2019
The book is well organized.
Ralph knows how market works, so we get the best advice from the right person.
I think it the best book that discusses investing in small caps.
Ralph knows how market works, so we get the best advice from the right person.
I think it the best book that discusses investing in small caps.
January 31, 2022
Typically, small-cap stocks are the ones that are considered risky as well as rewarding in the stock market. I, too, have some of the small-cap stocks (like Globus Spirits) in my portfolio that have turned out to be giving 400-500% returns.
So, Ralph Wanger, who made his fortune through small-cap stocks, has shared some important points while picking up supplies. Many small-cap stocks become cheap (price to earnings) in the bear market, and one can load them up.
There are three points to remember while picking any company: 1) Growth Potential 2) Fundamentals 3) Financial.
Apart from this, Wanger also cites some studies against the timing of the market. He says only 5% days give most of the returns.
He has some laws for long-term investors too:
1. Compound Interest
2. Reversion to Mean
3. Options have values
4. Some financial schemes are Ponzi schemes
5. Every bad idea starts from a good idea.
So, the book is okayish and gives general information about the how-to of small-cap investing. Read, only if you are not much into finance and are a beginner.
So, Ralph Wanger, who made his fortune through small-cap stocks, has shared some important points while picking up supplies. Many small-cap stocks become cheap (price to earnings) in the bear market, and one can load them up.
There are three points to remember while picking any company: 1) Growth Potential 2) Fundamentals 3) Financial.
Apart from this, Wanger also cites some studies against the timing of the market. He says only 5% days give most of the returns.
He has some laws for long-term investors too:
1. Compound Interest
2. Reversion to Mean
3. Options have values
4. Some financial schemes are Ponzi schemes
5. Every bad idea starts from a good idea.
So, the book is okayish and gives general information about the how-to of small-cap investing. Read, only if you are not much into finance and are a beginner.
August 21, 2018
When portfolio managers in the US some years ago voted on who they would prefer to manage their own money Warren Buffett only came second. Top ranked was the dean of small cap investing, Ralph Wanger, who was also the first to receive Morningstar’s Fund Manager’s Liftetime Acheivement Award. When Wanger in 2005 deservedly threw in the towel after 33 years of portfolio management his benchmark could show a commanding 12 per cent annual return. Wanger did even better and achieved 16 per cent - no doubt a huge accomplishment over such a long period. However, I would expect that at least part of the reason Wanger championed the above poll was that he seems to be a very likable person. Wanger is a GARP-investor in small cap stocks. In this book he openly shares how he pulled off his remarkable success.
Small caps constitute a huge investment universe. Wanger’s method to narrow the playing field and make it practical was to use long term themes. At any one time he had located half a dozen of social, technical or economic trends to guide him to fertile grounds. Since the competition is so fierce between asset managers with short term horizon and trading costs are high, Wanger chose to focus on an investment horizon of 4 to 5 years or even longer. Predicting the fortunes for a company that long into the future is a highly uncertain venture and thus the themes acted as long lasting tail winds that in Wanger’s mind decreased the risk for negative estimation errors. Guided by the themes Wanger and his co-workers created a list of roughly 600 stocks that they could consider owning and that they monitored weekly for outlier movements in share price or consensus earnings. The criteria’s for a stock to also end up in the portfolio was threefold; growth potential, financial strength and fundamental value. The company should have credible sales and profit growth, preferably through an entrepreneurial management dominating a boring but profitable niche market. A low debt level for the type of business the company was in, an understandable business model and conservative accounting practices gave Wanger the confidence that the company could withstand inevitable tougher times. Further, to end up in the portfolio Wanger wanted the stock to be cheap both in relation to the replacement value of assets and to EPS two years out in time. For each holding an investment case was written. He wasn’t a market timer but if he couldn’t find enough stocks to satisfy his investment criteria cash would accumulate as a residual. By sticking to his strategy of themes and strict investment criteria Wanger argues he got the strength to stay out of the latest investment fads and it also made it possible to screen out much of the noise that brokers and media constantly produce. During the second part of his career Wanter went from investing in US small caps to invest globally. He argued that by not using the same short term horizon as the in-the- rumour-mill-loop-locals “their edge washes out over time”. Even well informed rumours can cause over- and under reactions that could be taken advantage off by the long term investor.
Apart from using a co-writer Wanger had a quarter of a century of lively and humorous investment letters to fall back on when writing this book. Apparently there were investors in his fund who stated that the main reason for them to place money with Wanger was to receive these letters! Understandably then this witty book is a pleasure to read. When the book was published the stock market had had 15 years of continuous bull market (even if it didn’t always feel that way at the time) and now and then even the level headed Wanger feels a bit “90’s” compared to the current “cult of anti-equities”. The rein of buy-and-hold is strong and the discussion on risk management is short.
“If you want to stand out from the pack, you have to stand outside the pack”. Wanger was indeed a zebra who ventured further out in lion country than most and what spectacular results the walkabout gave.
Small caps constitute a huge investment universe. Wanger’s method to narrow the playing field and make it practical was to use long term themes. At any one time he had located half a dozen of social, technical or economic trends to guide him to fertile grounds. Since the competition is so fierce between asset managers with short term horizon and trading costs are high, Wanger chose to focus on an investment horizon of 4 to 5 years or even longer. Predicting the fortunes for a company that long into the future is a highly uncertain venture and thus the themes acted as long lasting tail winds that in Wanger’s mind decreased the risk for negative estimation errors. Guided by the themes Wanger and his co-workers created a list of roughly 600 stocks that they could consider owning and that they monitored weekly for outlier movements in share price or consensus earnings. The criteria’s for a stock to also end up in the portfolio was threefold; growth potential, financial strength and fundamental value. The company should have credible sales and profit growth, preferably through an entrepreneurial management dominating a boring but profitable niche market. A low debt level for the type of business the company was in, an understandable business model and conservative accounting practices gave Wanger the confidence that the company could withstand inevitable tougher times. Further, to end up in the portfolio Wanger wanted the stock to be cheap both in relation to the replacement value of assets and to EPS two years out in time. For each holding an investment case was written. He wasn’t a market timer but if he couldn’t find enough stocks to satisfy his investment criteria cash would accumulate as a residual. By sticking to his strategy of themes and strict investment criteria Wanger argues he got the strength to stay out of the latest investment fads and it also made it possible to screen out much of the noise that brokers and media constantly produce. During the second part of his career Wanter went from investing in US small caps to invest globally. He argued that by not using the same short term horizon as the in-the- rumour-mill-loop-locals “their edge washes out over time”. Even well informed rumours can cause over- and under reactions that could be taken advantage off by the long term investor.
Apart from using a co-writer Wanger had a quarter of a century of lively and humorous investment letters to fall back on when writing this book. Apparently there were investors in his fund who stated that the main reason for them to place money with Wanger was to receive these letters! Understandably then this witty book is a pleasure to read. When the book was published the stock market had had 15 years of continuous bull market (even if it didn’t always feel that way at the time) and now and then even the level headed Wanger feels a bit “90’s” compared to the current “cult of anti-equities”. The rein of buy-and-hold is strong and the discussion on risk management is short.
“If you want to stand out from the pack, you have to stand outside the pack”. Wanger was indeed a zebra who ventured further out in lion country than most and what spectacular results the walkabout gave.
January 27, 2008
One of the most interesting parts is where he goes over the journal he kept during October 1987 market crash.
September 30, 2016
A wonderful book, by someone I really respect in the industry. I learned a lot from his matter of fact approach to investing and believe this a worthwhile read for anyone starting in the business.
December 26, 2024
Most professional moneymen huddle in the center of the herd. I guess it's to be expected. After all, those responsible for most institutional portfolios have gone to the same colleges and taken the same MBA courses. Once they become money managers at banks, mutual funds, insurance companies, and investment consulting firms, they read the same publications, get fed the same information and opinions on their PCs, talk to the same analysts and institutional salesmen, and attend the same investment conferences, put on by the major brokerage houses. They lunch together, compare notes, and reinforce one another's convictions. They wear the same suspenders or Ferragamo pumps, and switch from Perrier to red wine within the same month. No wonder they end up with nearly identical portfolios, and that the results of those portfolios cluster around the average.
I received a copy of this book from my uncle a few years ago and finally decided to read it after I realized that it would benefit me at my new job to continue to expand my understanding of financial markets. Ralph Wanger is the figurehead of the Acorn mutual funds which invest in small cap companies both domestically and internationally. His writing style is candid and humorous while certainly conveying relevant insights into both small cap investing and investing more broadly. The book has become somewhat outdated in time, but it is a testament to Wanger's insights that even with the passage of time there are still many noteworthy pieces of information to gather from his writing. Worth the read for any serious investment professional.
I received a copy of this book from my uncle a few years ago and finally decided to read it after I realized that it would benefit me at my new job to continue to expand my understanding of financial markets. Ralph Wanger is the figurehead of the Acorn mutual funds which invest in small cap companies both domestically and internationally. His writing style is candid and humorous while certainly conveying relevant insights into both small cap investing and investing more broadly. The book has become somewhat outdated in time, but it is a testament to Wanger's insights that even with the passage of time there are still many noteworthy pieces of information to gather from his writing. Worth the read for any serious investment professional.
June 4, 2023
Not well known today, but Wanger at one point topped a survey of other fund managers who were asked who they would want to run their personal money (Buffett came second). He ran the Acorn Fund in small caps for >25 years. Follows a GARP approach and likes there to be some structural trend supporting the company's growth over time as well as an owner0-operator. Small, but not micro, establised and proven managment, sound balance sheet, strong competitive position. Some of his ideas are a bit quirky, and the book doesn't seem to be structured or flow very well, but had some great sections on the perils of market timing, being contrarian, avoid cutting the flowers and rely on compounding, importance of having conviction in your approach
Buy when others are waiting for a better entry point: it's cheap because others think it will get cheaper. Buy when no one wants them.
Buy when others are waiting for a better entry point: it's cheap because others think it will get cheaper. Buy when no one wants them.
August 24, 2019
One of the best book recommended for anyone who is invested or wants to invest in small caps. Ralph wanger is a Dean of small cap investing and while reading the book it felt like was interacting with the best mind. The analogy drawn between Zebra and Fund manager is very interesting. Some of insight he has shared about past bear market is a gold mine of information. A book written in 1996 is as valuable in 2019.
January 1, 2021
Pretty average read. Lots of theory but not any practical examples of stock analysis. I would suggest read Peter Lynch’s Beating the Street that has much more pointers to look at while analysing any company/stock. Unfortunately this one lacked any useful new information that will really help in the analysis.
January 25, 2025
nice little book with some real values;
key insights learnt:
1. value of a stock is its market value + all options
2. capturing values from downstream of technology - when technology booms, what are the underlying facts of things? gpt -> more builders -> more software -> increased cloud cost, more telemetry data
key insights learnt:
1. value of a stock is its market value + all options
2. capturing values from downstream of technology - when technology booms, what are the underlying facts of things? gpt -> more builders -> more software -> increased cloud cost, more telemetry data
June 14, 2018
Great book. Read it in high school, re-read it now. An investment checklist, laid right out. Hard to outperform doing the same thing as everyone else. In the world of investments, as Ralph points out, it's the zebras that survive.
July 13, 2025
solid value investing guidebook, especially using analogies to illustrate points. personally I found it interesting to note his analysis of the market at the time and how certain very broad predictions of the future have or haven't played out.
August 21, 2017
Good book learn about small cap investing
February 28, 2018
Brilliant book. Will read again in few months. Very lucidly written and number of practical suggestions for investment management.
April 27, 2018
Easy read, but one of the best investment books I’ve ever picked up. Along the lines of Lynch, Marks, and Fisher.
July 22, 2018
One of the best books on Investing!
April 10, 2020
I read this book a very long time ago but recall it being an excellent investment a book with many common sense principles.
January 4, 2017
A book to be re read periodically
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Displaying 1 - 20 of 20 reviews