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The Little Book of Investing Like the Pros: Five Steps for Picking Stocks
As you have probably noticed, there are quite a few investing books out there. Many of them were written by some of the world's greatest investors. So, why should you read our book?
Stock investing is more prevalent than ever, whether directly or indirectly through brokerage accounts, exchange-traded funds, mutual funds, or retirement plans. Despite this, the vast majority of individual investors have no training on how to pick stocks. And, until now, there hasn't been a truly accessible, easy-to-understand resource available to help them. The Little Book of Investing Like the Pros was written to fill this void.
We believe the simplicity and accessibility of our stock picking framework is truly unique. Using real-world examples and actual Wall Street models used by the pros, we teach you how to pick stocks in a highly accessible, step-by-step manner. Our goal is straightforward—to impart the skills necessary for finding high-quality stocks while protecting your portfolio with risk management best practices.
Our practical approach is designed to help demystify the investing process, which can be intimidating. This training will help set you apart from others who are largely flying blind.
Pilots require extensive training before receiving a license. Doctors must graduate medical school, followed by a multi-year residency. Even those providing professional investment advice require certification. But, anyone can buy a stock without any training whatsoever. While buying stocks on a hunch and a prayer may not endanger your life, it can certainly put your finances at risk.
311 pages, Kindle Edition
Published February 13, 2020
126 people are currently reading
346 people want to read
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Displaying 1 - 11 of 11 reviews
April 9, 2020
This book does not belong on any 401-k, 403-b or 457 investor’s shelf. Normally I don’t spend time on negative reviews but this book convinced me that not only should regular investors NOT read this book but this series should be retired. The books by Jason Zweig, John Bogle and David Darst are the books in this series that investors should read.
I wouldn’t expect that stock pickers would evangelize passive asset allocation with periodic rebalancing but on page 8 the salesmanship begins— “Common sense dictates that a superior approach would target winners and seek to avoid losers to drive above-market returns.” Easy theoretically, but that’s like saying all you need to do is put the “ball in play” facing a 100-mph fastball. The likelihood of someone not in the finance industry achieving market-beating returns beyond chance can seriously harm the average investor. There is already so much data confirming how a passive buy-and-hold strategy earns superior returns compared to an active approach that I won’t belabor the point.
Ok, you may say people can have a philosophical disagreement about this, so how is the rest of the book?
From a thematic view it makes sense— Come up with ideas, try to identify your best ideas from your own knowledge, conduct financial due diligence by understanding how the business makes money and understand their competitors, conduct a value analysis of the business while understanding the macro level drivers impacting the business and industry ( while also understanding key terms like return on invested capital, free cash flow, etc) and then make your investment decision while managing your portfolio. That’s it (tongue-in-cheek)!! Maybe you slept in a Holiday Inn last night and feel confident enough to do it. I have an MBA and based on the sophisticated terminology, I doubt very many “average” investors could easily understand and implement this plan. Which by the way, if this was such a great plan, why would the authors sell a book for $24.95, when they could make billions from implementing it. Because any market-beating system that was public would be arbitraged away.
The authors use one good investment—Delphi Automotive— and use it as a template for the entire book. Sparse data to justify an entire book. I could get lucky and hit a 100-mph fastball too but I wouldn’t write a book about my hitting prowess. Finally, the prose is nearly impenetrable for the average investor. Here is one example on page 133:
“BCCS — ongoing migration of manufacturing base to best-cost regions, over 90% at time of IPO
Flexible workforce— ability to “flex” to market conditions, 70% variable cost structure and no UAW (United Automobile Workers Union)’
Lean savings— deep-seared continuous improvement culture driven by management and the board...
Emerging markets— penetration of high-margin products combined with leverage over OEMS.”
This is pure gobbledygook meant to speak to insiders, which makes sense because the authors spend several pages thanking finance industry names! No one without a finance background who was a general reader read this book and gave feedback (now that statement is something I would invest in!).
In conclusion, this is beyond worthless for the average investor. You will not gain insight that will allow you to be a successful long-term investor and hopefully Wiley will insist on having general feedback before putting books like this in the market, and it’s disappointing that Howard Marks (who is a thoughtful and insightful writer, whose books I own and enjoyed reading ) attested to the benefits of the book— he should know better!).
I wouldn’t expect that stock pickers would evangelize passive asset allocation with periodic rebalancing but on page 8 the salesmanship begins— “Common sense dictates that a superior approach would target winners and seek to avoid losers to drive above-market returns.” Easy theoretically, but that’s like saying all you need to do is put the “ball in play” facing a 100-mph fastball. The likelihood of someone not in the finance industry achieving market-beating returns beyond chance can seriously harm the average investor. There is already so much data confirming how a passive buy-and-hold strategy earns superior returns compared to an active approach that I won’t belabor the point.
Ok, you may say people can have a philosophical disagreement about this, so how is the rest of the book?
From a thematic view it makes sense— Come up with ideas, try to identify your best ideas from your own knowledge, conduct financial due diligence by understanding how the business makes money and understand their competitors, conduct a value analysis of the business while understanding the macro level drivers impacting the business and industry ( while also understanding key terms like return on invested capital, free cash flow, etc) and then make your investment decision while managing your portfolio. That’s it (tongue-in-cheek)!! Maybe you slept in a Holiday Inn last night and feel confident enough to do it. I have an MBA and based on the sophisticated terminology, I doubt very many “average” investors could easily understand and implement this plan. Which by the way, if this was such a great plan, why would the authors sell a book for $24.95, when they could make billions from implementing it. Because any market-beating system that was public would be arbitraged away.
The authors use one good investment—Delphi Automotive— and use it as a template for the entire book. Sparse data to justify an entire book. I could get lucky and hit a 100-mph fastball too but I wouldn’t write a book about my hitting prowess. Finally, the prose is nearly impenetrable for the average investor. Here is one example on page 133:
“BCCS — ongoing migration of manufacturing base to best-cost regions, over 90% at time of IPO
Flexible workforce— ability to “flex” to market conditions, 70% variable cost structure and no UAW (United Automobile Workers Union)’
Lean savings— deep-seared continuous improvement culture driven by management and the board...
Emerging markets— penetration of high-margin products combined with leverage over OEMS.”
This is pure gobbledygook meant to speak to insiders, which makes sense because the authors spend several pages thanking finance industry names! No one without a finance background who was a general reader read this book and gave feedback (now that statement is something I would invest in!).
In conclusion, this is beyond worthless for the average investor. You will not gain insight that will allow you to be a successful long-term investor and hopefully Wiley will insist on having general feedback before putting books like this in the market, and it’s disappointing that Howard Marks (who is a thoughtful and insightful writer, whose books I own and enjoyed reading ) attested to the benefits of the book— he should know better!).
March 8, 2023
Excellent book overall. Definitely not for someone who is just starting out in the markets, you definitely need a bit of experience in order to grasp what they are saying. Even then, it is a very meaty book that packs a LOT of information into a small book. However I appreciate that it focuses on method and teaching how to invest rather than what to invest in.
September 21, 2021
The Little Book of Investing Like the Pros by Joshua Pearl is quite possibly the most tedious investment book ever written. I had previously thought nothing would ever top the Morningstar Guide called The Five Rules for Successful Stock Investing by Pat Dorsey for sheer tedium. But the Little Book takes the crown. If anything is going to propel you to start looking at Stock Charts, the 50-day Simple Moving Average, and the MACD (pronounced MacDEE), these two books should. Unless, of course, you happen to be an Institutional Investor or Professional Money Manager. Then, the Little Book of Investing Like the Pros would be relevant. But for most so-called "Retail Investors," this book is going to be an extremely tough read. It took me over nine months to read and I had to force myself to finish it.
Now, just to be clear, I'm not saying it's a bad book. The investment approach presented by Mr. Pearl is certainly legit. But as mentioned above, it's geared for investment pros, not the small-time investor. And it's not that the subject is beyond the understanding of retail investors. Mr. Pearl does a fine job of explaining things. But I don't think very many, if any, retail investors would have the time, discipline, patience, or desire to follow the extremely time-consuming, complicated, and tedious process. There's a phrase that became popular a few years back called, "getting into the weeds." That's what this book does. If you thought Fundamental Analysis was tedious enough just looking at Financial Statements and Financial Metrics, wait till you read this book.
Now, just to be clear, I'm not saying it's a bad book. The investment approach presented by Mr. Pearl is certainly legit. But as mentioned above, it's geared for investment pros, not the small-time investor. And it's not that the subject is beyond the understanding of retail investors. Mr. Pearl does a fine job of explaining things. But I don't think very many, if any, retail investors would have the time, discipline, patience, or desire to follow the extremely time-consuming, complicated, and tedious process. There's a phrase that became popular a few years back called, "getting into the weeds." That's what this book does. If you thought Fundamental Analysis was tedious enough just looking at Financial Statements and Financial Metrics, wait till you read this book.
December 16, 2020
A fast-paced book that explains quite a bit of investment types, financial analysis methods, and varieties of investment due diligence.
It felt as if I listened to a session of two 4 credit MBA courses. Good book overall.
It felt as if I listened to a session of two 4 credit MBA courses. Good book overall.
April 7, 2021
This book describes how to pick stocks and go through the valuation process. For people that want to learn a framework in order to build an active portfolio. Quite a complete guide, it will require work to adopt the framework. Also to learn the methods described in the book, by example; Discounted cash flow analysis. The book offers the guidelines and examples. You have to figure out the rest.
Therefore the book is certainly not for everyone. For most people a passive investment approach is a better fit. The book should explain this and formulate its target audience.
Therefore the book is certainly not for everyone. For most people a passive investment approach is a better fit. The book should explain this and formulate its target audience.
January 19, 2025
I listened to the audio book and to be a bit critical I think this book isn’t designed for it. There are a lot of equations and calculations that is better understood when read than when listened to.
Having said that, the book takes one example stock of a company (Delphi automotive) and dissects the various financial and business scenarios. A decent take overall.
Having said that, the book takes one example stock of a company (Delphi automotive) and dissects the various financial and business scenarios. A decent take overall.
March 6, 2022
I believe its not for just started investors.. Full of completed words
December 22, 2022
Not my style of investing
June 9, 2023
Very concise, straightforward and helpful.
Highly recommend to people who are new to investing.
Highly recommend to people who are new to investing.
June 15, 2024
Good info. Annoying voice of reader.
October 16, 2023
A long case study about their Delphi Automotive investment actually.
Displaying 1 - 11 of 11 reviews