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Sai Lầm Chết Người Trong Đầu Tư
Sai lầm chết người trong đầu tư: Những thương vụ tệ nhất của những nhà đầu tư đỉnh nhất soi rọi ánh sáng khai mở lên những bài học hổ thẹn của hơn một chục nhà đầu tư nổi tiếng nhất thế giới. Nghiên cứu và sao chép những chiến lược và hành vi của các nhà đầu tư thành công để tăng lợi nhuận là một con đường đã mòn cũ, nhưng tìm hiểu những ý tưởng điên rồ và những cơ hội bị bỏ lỡ đã không thể làm chệch đường sự nghiệp hiển hách của họ còn khiến ta vỡ vạc khôn ngoan.
Trong cuốn sách được nghiên cứu xuất sắc này, tìm hiểu chi tiết một tập hợp đa dạng các nhà đầu tư vượt ra ngoài những thành tựu nổi tiếng của họ cho thấy việc đầu tư là không dễ dàng – ngay cả với những người được trời phú cho tài năng xuất sắc và thời điểm đúng đắn không chê vào đâu được. Nếu bạn nghĩ là bạn biết những câu chuyện đằng sau những người khổng lồ đầu tư như Warren Buffett, Bill Ackman, Chris Sacca, Jack Bogle, Ben Graham, và John Maynard Keynes, xin kể tên vài người, những nghiên cứu độc đáo trong sách này sẽ bổ sung một góc nhìn mới và giàu sắc thái cho các tiểu sử quen thuộc của họ. Sau khi đọc cuốn sách này, bạn sẽ trở thành một nhà đầu tư khôn ngoan hơn khi biết:
• Tầm quan trọng của việc quản trị rủi ro và không bám giữ các khoản đầu tư
• Tại sao bạn cần đầu tư với những điểm mạnh của bạn, đồng thời nhớ rằng bạn không thông minh như bạn nghĩ
• Chấp nhận những khoản thua lỗ lớn trên hành trình là tối quan trọng để thành công vì bạn chỉ cần chiến thắng một lần thôi
• Xây dựng danh mục đầu tư hoàn hảo là việc vô ích
• Thất bại có thể là bước đi lớn nhất của bạn tiến tới thành tựu
Một trong những điều rút ra lớn nhất từ các câu chuyện cảnh báo này là mỗi sai lầm của bạn trao cho bạn món quà vô giá. Tất cả các nhà đầu tư ở đây đều hứng chịu những khoản thua lỗ tài chính lớn, nhưng không người nào bỏ cuộc. Thật ra, nhiều bộ kỹ năng và chiến lược được thực hành rộng rãi ngày nay chính là nhờ những thất bại thảm họa đó.
Dành cho mọi nhà đầu tư đang tìm cách đạt hết tiềm năng, giờ là lúc cho những Sai lầm chết người trong đầu tư.
Trong cuốn sách được nghiên cứu xuất sắc này, tìm hiểu chi tiết một tập hợp đa dạng các nhà đầu tư vượt ra ngoài những thành tựu nổi tiếng của họ cho thấy việc đầu tư là không dễ dàng – ngay cả với những người được trời phú cho tài năng xuất sắc và thời điểm đúng đắn không chê vào đâu được. Nếu bạn nghĩ là bạn biết những câu chuyện đằng sau những người khổng lồ đầu tư như Warren Buffett, Bill Ackman, Chris Sacca, Jack Bogle, Ben Graham, và John Maynard Keynes, xin kể tên vài người, những nghiên cứu độc đáo trong sách này sẽ bổ sung một góc nhìn mới và giàu sắc thái cho các tiểu sử quen thuộc của họ. Sau khi đọc cuốn sách này, bạn sẽ trở thành một nhà đầu tư khôn ngoan hơn khi biết:
• Tầm quan trọng của việc quản trị rủi ro và không bám giữ các khoản đầu tư
• Tại sao bạn cần đầu tư với những điểm mạnh của bạn, đồng thời nhớ rằng bạn không thông minh như bạn nghĩ
• Chấp nhận những khoản thua lỗ lớn trên hành trình là tối quan trọng để thành công vì bạn chỉ cần chiến thắng một lần thôi
• Xây dựng danh mục đầu tư hoàn hảo là việc vô ích
• Thất bại có thể là bước đi lớn nhất của bạn tiến tới thành tựu
Một trong những điều rút ra lớn nhất từ các câu chuyện cảnh báo này là mỗi sai lầm của bạn trao cho bạn món quà vô giá. Tất cả các nhà đầu tư ở đây đều hứng chịu những khoản thua lỗ tài chính lớn, nhưng không người nào bỏ cuộc. Thật ra, nhiều bộ kỹ năng và chiến lược được thực hành rộng rãi ngày nay chính là nhờ những thất bại thảm họa đó.
Dành cho mọi nhà đầu tư đang tìm cách đạt hết tiềm năng, giờ là lúc cho những Sai lầm chết người trong đầu tư.
328 pages, Paperback
First published January 1, 2018
380 people are currently reading
2033 people want to read
About the author
Michael Batnick
4 books34 followersAs Director of Research at Ritholtz Wealth Management, Michael Batnick, CFA reads research publications and stays on top the latest trends in the industry. Michael is a member of the investment committee and heads up the company’s internal research efforts. He spends most of his time developing and implementing risk management and portfolio strategies for the firm’s clients.
Michael is the author of Big Mistakes: The Best Investors and Their Worst Investments . He is also co-host of the Animal Spirits podcast.
Michael is the author of Big Mistakes: The Best Investors and Their Worst Investments . He is also co-host of the Animal Spirits podcast.
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Displaying 1 - 30 of 93 reviews
June 23, 2018
I am giving 1 star because I can't give zero stars. I wrote the review on twitter for which Michael Batnick blocked me, LOL. So i am just going to post the review here. It looks like most of the reviews here on amazon.com are engineered, paid for. So, let me give an honest review.
For an amateur who is first getting introduced into the stock markets, the book is great, but will be unrelatable. But for someone who's read variety of books like Liar's poker, Snowball, Charlie's Almanack, and other books, this one reads like a collection of blog posts. The only chapter that was pretty good - was the last one about himself, but that too isn't worth more than a blog post.
Charging 915 rupees for the kindle edition and 1900 for the paperback sounds like robbery - that too for this book. Money & Power by far one of the longest and the best of non-fiction finance books I've read sells at 570 rupees and 270 rupees respectively for paperback and kindle edition respectively.
This book would have been fine at 150-200 rupees for a kindle edition and 300 rupees tops for a paperback(if you ask me, i'd never have it published at all). It's a short read. It's everything available in Google. Reads like a bunch of blogposts that don't command any premium value coz all this information is available for free if you'd only search Google.
Except for the last chapter where he recounts his experience, book amounts to a rehash of everything that's come before, more like a so-so summary of other books in each chapters. It would have been great at least if he'd been honest about that, and in pricing it right.
All of the "wisdom" that this book supposedly offers have been told before in a better manner. Long story short, in the history of books in finance and trading, this book will be most irrelevant. You'd be better off listening to CHAT WITH TRADERS and reading MARKET WIZARDS series of books.
All said, I'd give 0 stars for this book, coz this book was a waste of money and a wee bit waste of time, because it was more like revising all that i read in other books for 4 hours. Yes, i finished this book in 4 hours.
Skip this book. Don't buy. This is too steeply priced for a cheaply written book with nothing new to offer.
For an amateur who is first getting introduced into the stock markets, the book is great, but will be unrelatable. But for someone who's read variety of books like Liar's poker, Snowball, Charlie's Almanack, and other books, this one reads like a collection of blog posts. The only chapter that was pretty good - was the last one about himself, but that too isn't worth more than a blog post.
Charging 915 rupees for the kindle edition and 1900 for the paperback sounds like robbery - that too for this book. Money & Power by far one of the longest and the best of non-fiction finance books I've read sells at 570 rupees and 270 rupees respectively for paperback and kindle edition respectively.
This book would have been fine at 150-200 rupees for a kindle edition and 300 rupees tops for a paperback(if you ask me, i'd never have it published at all). It's a short read. It's everything available in Google. Reads like a bunch of blogposts that don't command any premium value coz all this information is available for free if you'd only search Google.
Except for the last chapter where he recounts his experience, book amounts to a rehash of everything that's come before, more like a so-so summary of other books in each chapters. It would have been great at least if he'd been honest about that, and in pricing it right.
All of the "wisdom" that this book supposedly offers have been told before in a better manner. Long story short, in the history of books in finance and trading, this book will be most irrelevant. You'd be better off listening to CHAT WITH TRADERS and reading MARKET WIZARDS series of books.
All said, I'd give 0 stars for this book, coz this book was a waste of money and a wee bit waste of time, because it was more like revising all that i read in other books for 4 hours. Yes, i finished this book in 4 hours.
Skip this book. Don't buy. This is too steeply priced for a cheaply written book with nothing new to offer.
August 19, 2018
Not a good book. Its a hodgepodge of anecdotes that does not get analyzed thoroughly. Not a very deeply researched book, but a collection of previously published (ad naseum) stories. It is also not very well written, does not seem to have been edited well. The writing is completely butchered by thrown-together sentences without worrying how they follow each other or drive to a story, reminds me of a high school essay written the night before due date. Overall very disappointed with it, was hoping for so much more, would not recommend it to anyone.
September 15, 2022
سرمایه گذاری حتی برای بازیکنان حرفه ای نیز بازی خطرناکی است. اما با مطالعه خطاهای بزرگان سرمایه گذاری می توانیم به صورت رایگان درس های بزرگی یاد بگیریم. اگر مبتدی هستید و می خواهید وارد بازار سرمایه گذاری بشوید باید ابتدا به دوری از خطا و ضرر نکردن بیندیشید و سپس به برد فکر کنید. به دارایی تان وابسته نباشید تا احساساتی نظیر ترس، خشم و طمع بر شما غالب نشود و بتوانید بهترین تصمیم ها را بگیرید. به گفته وارن بافت سرمایه گذاران باید طوری عمل کنند که گویی در تمام دوران عمر خود فرصت 20 معامله را دارند. در این شرایط کاملا دقت کرده و سهم های خود را با احتیاط انتخاب می کنند.
June 21, 2018
Learn and grow from your mistakes.
The last Chapter is worth the cost on its own. A crushing and hopeful story about Michael Batnick's own mistakes which seem to encompass all those made by the other investors in the book. Reading that Chapter, I felt like I could and have made those mistakes in my most idle times...though I would never touch a 3x levered etf.
The last Chapter is worth the cost on its own. A crushing and hopeful story about Michael Batnick's own mistakes which seem to encompass all those made by the other investors in the book. Reading that Chapter, I felt like I could and have made those mistakes in my most idle times...though I would never touch a 3x levered etf.
August 1, 2021
John Kenneth Galbraith có câu "thiên tài là thị trường đang lên", chứng khoán tăng giá trong phần lớn thời gian. Hey! Ít ra là chúng đã tăng như thế trong lịch sử chứng khoán Hoa Kỳ. Từ những năm 1900s, chỉ số Trung bình Công nghiệp Dow Jones (DJIA) luôn ở mức tăng hai chữ số, cụ thể 47% qua các năm. Với hoàn cảnh thuận lợi như thế, xu hướng tự nhiên của các nhà đầu tư là cho rằng những lợi nhuận mà họ giành được là nhờ kỹ năng thay vì nhờ các điều kiện thị trường thuận lợi.
Humphrey Bancroft Neill, tác giả cuốn The Art of Contrary Thinking (tạm dịch: Nghệ thuật tư duy ngược), đã khái quát 1 cách hay nhất :"Đừng nhầm lẫn những bộ não với một thị trường đang tăng".
Ý tưởng chúng ta lẫn lộn giữa năng lực lựa chọn các cổ phiếu trên trung bình ở một thị trường nước đang lên nâng mọi con tàu lên theo phổ biến tới mức có một cái tên cho nó, thiên kiến quy kết (attribution bias), "Thiên kiến quy kết là để chỉ xu hướng người ta quy kết thành công của họ cho năng lực và thất bại của họ là vì những tác lực ngoại cảnh không may".
Một tài liệu nghiên cứu năm 2013 thấy rằng các thị trường đang tăng điểm khiến những nhà đầu tư cá nhân thực hiện giao dịch nhiều hơn. Lý do chúng ta giao dịch nhiều hơn trong một môi trường mà chúng ta lẽ ra nên giao dịch ít hơn là vì trong một thị trường đang tăng, chúng ta liên tục nhận được phản hồi tích cực, và chúng ta mắc câu những kích-thích-tố tự nhiên mà cơ thể chúng ta sản sinh ra.
Để tiếp tục cảm giác đó, chúng ta lại càng giao dịch nhiều hơn, nhanh hơn. Thật không may, người ta đã ghi nhận được rõ ràng là tốc độ quay vòng vốn và lợi nhuận tăng thêm có tương quan âm với nhau (Michael Patnick –trích trong sách).
Warren Buffett từng viết: "Việc đầu tư thành công trong cuộc đời không đòi hỏi một chỉ số IQ cao chót vót, tầm hiểu biết kinh doanh sâu sắc khác thường hay thông tin nội bộ. Những gì cần có là một khuôn khổ trí tuệ sáng suốt để đưa ra quyết định và khả năng khiến cho cảm xúc không phá hủy nền tảng đó . Bạn phải tự đưa ra kỷ luật cho cảm xúc."
Cuối cùng, với tất cả những lập luận và ví dụ kể trên nhấn mạnh tầm quan trọng của 2 điều là kỷ luật và kiểm soát cảm xúc . Việc có hiểu biết về những điều này là không đầy đủ mà cần 1 quá trình thực hành, vấp ngã và rút kinh nghiệm để tích lũy.
Best regards,
Humphrey Bancroft Neill, tác giả cuốn The Art of Contrary Thinking (tạm dịch: Nghệ thuật tư duy ngược), đã khái quát 1 cách hay nhất :"Đừng nhầm lẫn những bộ não với một thị trường đang tăng".
Ý tưởng chúng ta lẫn lộn giữa năng lực lựa chọn các cổ phiếu trên trung bình ở một thị trường nước đang lên nâng mọi con tàu lên theo phổ biến tới mức có một cái tên cho nó, thiên kiến quy kết (attribution bias), "Thiên kiến quy kết là để chỉ xu hướng người ta quy kết thành công của họ cho năng lực và thất bại của họ là vì những tác lực ngoại cảnh không may".
Một tài liệu nghiên cứu năm 2013 thấy rằng các thị trường đang tăng điểm khiến những nhà đầu tư cá nhân thực hiện giao dịch nhiều hơn. Lý do chúng ta giao dịch nhiều hơn trong một môi trường mà chúng ta lẽ ra nên giao dịch ít hơn là vì trong một thị trường đang tăng, chúng ta liên tục nhận được phản hồi tích cực, và chúng ta mắc câu những kích-thích-tố tự nhiên mà cơ thể chúng ta sản sinh ra.
Để tiếp tục cảm giác đó, chúng ta lại càng giao dịch nhiều hơn, nhanh hơn. Thật không may, người ta đã ghi nhận được rõ ràng là tốc độ quay vòng vốn và lợi nhuận tăng thêm có tương quan âm với nhau (Michael Patnick –trích trong sách).
Warren Buffett từng viết: "Việc đầu tư thành công trong cuộc đời không đòi hỏi một chỉ số IQ cao chót vót, tầm hiểu biết kinh doanh sâu sắc khác thường hay thông tin nội bộ. Những gì cần có là một khuôn khổ trí tuệ sáng suốt để đưa ra quyết định và khả năng khiến cho cảm xúc không phá hủy nền tảng đó . Bạn phải tự đưa ra kỷ luật cho cảm xúc."
Cuối cùng, với tất cả những lập luận và ví dụ kể trên nhấn mạnh tầm quan trọng của 2 điều là kỷ luật và kiểm soát cảm xúc . Việc có hiểu biết về những điều này là không đầy đủ mà cần 1 quá trình thực hành, vấp ngã và rút kinh nghiệm để tích lũy.
Best regards,
November 30, 2022
อ่านเพลินๆ ข้ามๆ ส่วนตัวเลขหรือศัพท์แสงไปเพราะไม่ได้อยากเข้าใจขนาดนั้น 555 ยังไงก็ตาม รู้สึกงงๆ กับการสรุปความของนักเขียน มึนๆ เล็กน้อยว่าที่เล่ามาจะบอกอะไรนะในบางบท เอาเป็นว่าอ่านเพื่อให้กำลังใจตัวเองว่าแพ้บ้างก็ได้ พลาดบ้างก็เท่ดี
June 16, 2018
The book is about the big mistakes committed by some of the all time big investors or personalities. It briefly touches upon these mistakes without going much into details.
I found the book to be another me too of kind in the investment category. Some of the mistakes such as Herbalife by Bill Ackman, Dexter Shoes by Warren Buffett or the bet on gold by John Paulson have been widely covered in media and in much details. Book just brushes through these mistakes. The conclusion that the author tries to bring out from the individual chapters is very basic & fairly familiar to someone who's been in industry for 3-5 years.
Overall didn't find any incremental value. Good for someone who's new to the investment world. Will help them to know about the investment gurus & the financial history of US market. One who's decently read can avoid it completely.
I found the book to be another me too of kind in the investment category. Some of the mistakes such as Herbalife by Bill Ackman, Dexter Shoes by Warren Buffett or the bet on gold by John Paulson have been widely covered in media and in much details. Book just brushes through these mistakes. The conclusion that the author tries to bring out from the individual chapters is very basic & fairly familiar to someone who's been in industry for 3-5 years.
Overall didn't find any incremental value. Good for someone who's new to the investment world. Will help them to know about the investment gurus & the financial history of US market. One who's decently read can avoid it completely.
June 6, 2018
Any investor or trader should read this. Many of the stories you’ve heard, but Mike adds something to each one of them. I loved this book and couldn’t put it down.
August 8, 2018
Written by a novice. If you're a reader in finance, you'd likely find it a drag with mistakes in the details of his stories. If you're a beginner, there are better books to read and you could perhaps skip this one. I picked it up because Wall street journal wrote about it (guess could be paid article - don't know) and I liked the topic/title in that it talks about mistakes. Don't judge a book by its cover - I guess!
September 6, 2020
possibly one of the most vacuous, insubstantial, and puerile books in the investing genre i’ve read — a genre that doesn’t have a high base rate of insightful literature to begin with. 0 stars but for being mercifully short for someone like me with a nigh-pathological need to finish books I start
April 22, 2020
This book is intriguing and a great set of summaries of the careers of the best investors of the last 300 years. However, Batnick takes an interesting perspective, choosing to highlight the failures of the best investors. In this, he shows they make mistakes like we do, and each story drives home a behavioral or investing point that we can apply ourselves. The final chapter is also a fun backstory to Michael, likely to be most interesting to listeners of the Animal Spirits Podcast.
The key insight, one that would help every individual investor, is a quote I'll use to summarize the book: "Successful investors construct portfolios that allow them to capture enough of the upside in a bull market without feeling as if they're getting left behind, and a portfolio that allows them to survive a bear market when everyone around them is losing their mind."
The key insight, one that would help every individual investor, is a quote I'll use to summarize the book: "Successful investors construct portfolios that allow them to capture enough of the upside in a bull market without feeling as if they're getting left behind, and a portfolio that allows them to survive a bear market when everyone around them is losing their mind."
July 16, 2018
Overall, everyone made mistakes, the best traders knew how to recover from their mistakes.
July 6, 2022
At 20 years old, without having taken any economics courses in college, he started at the bottom of the ladder, delivering securities and checks. After a month, he was promoted as an assistant to the bond department, and just six weeks later, with his advanced intellect, Graham was writing a daily market letter.
value investing is not a panacea. Cheap can get cheaper. Rich can get richer. Margins of safety can be miscalculated, and value can fail to materialize.
immune to the shortterm vicissitudes of the market
There are literally dozens of other companies which also have a quoted value less than their cash in bank…. This means that a great number of American businesses are quoted in liquidating value; that in the best recent judgment of Wall Street, these businesses are worth more dead than alive.
You'll never believe that a stock that falls 50% in a year might not necessarily be a bargain. You have to catch a few of these falling knives
“They said there are two sides to everything. But there is only one side to the stock market; and it's not the bull side or the bear side, but the right side.”
Paine Webber as a board boy, earning $6 a week. While he was learning about the market, young Livermore kept a journal, recording fictional trades. After 18 months of preparation, he visited a bucket shop, which were places where investors, mostly amateurs, could trade.
When our positions go against us, it's easy to hold on, but it's even easier to compound the problem by adding to the position. Adding to a losing position has been the downfall of many investors. “If you find yourself in a hole, stop digging.”
unlike Twain, had no problem cutting his losses.
The best way to avoid the catastrophic losses is to decide before you invest how much you're willing to lose, either in percentage or dollar terms. This way, your decisions will be driven by logic rather than fear
it doesn't just matter how smart you are, it matters how smart your competition is.
At one point, they had $1.25 trillion in open positions and they were levered 100:1. This leverage would lead to one of the largest disappearing acts of wealth the world has ever seen.
they calculated that their daily VAR, or value at risk (how much they could lose). It was the beginning of the end.
I rank this Bogle invention along with the invention of the wheel, the alphabet, Gutenberg printing, and wine and cheese
Michael Steinhardt is one of those people who was born to pick stocks. In his autobiography, No Bull, he talks about how his interest in stock investing began when he was 13 years old.
This isn't to say you should never venture outside your comfort zone, after all, if you never expand your horizons, you'll never learn. But if you are going to invest in areas that you're less familiar with, read the fine print, keep your investments small at first, and limit your losses to fight another day.
like bowling with bumpers in the gutters. He was throwing the ball as hard as he could, and it was working.
Don't confuse brains with a bull market!
Buffett certainly was aware of some of the business challenges Dexter faced, but as Alice Schroeder described in her wonderful biography, The Snowball, “Here he was a little outside his ‘circle of competence,’
Five years ago we had no thought of getting into shoes. Now we have 7,200 employees in that industry, and I sing “There's No Business Like Shoe Business” as I drive to work…. Finally, and of paramount importance, Harold and Peter can be sure that they will get to run their business – an activity they dearly love exactly as they did before the merger. At Berkshire, we do not tell .400 hitters how to swing.
Buffett and Munger made the mistake of not making sure the business had a moat and being too focused on what they thought was an attractive purchase price.”
Do you know more than the person on the other side of the trade? Do you know something that's not in the newspaper or on the Internet?
Know when you're wrong; use price levels, dollar loss levels, or percentage loss levels. Making decisions ahead of time, especially decisions that involve admitting defeat, can help conquer one of the biggest hurdles investors face
Daniel Kahneman say, “Ideas are part of who we are. They become like possessions.
Even when we're presented with evidence that disconfirms our previous views, straying far from our original feelings is too painful for most to bear.
By definition, activist investors are public, because once you acquire 5% of a company, you must file a 13D registration with the Security and Exchange Commission. Short positions, however, do not have to be disclosed
Herbalife, he contends, is a pyramid scheme. “Where your money's made is not serving smoothies. Where your money's made is having hundreds, or tens, or thousands of distributors around the globe who are working.”
No stone is left unturned. No cutlet is left uncooked, as Winston Churchill once said.
We simply want the truth to come out. If distributors knew the probability of making $95,000 a year – which is the millionaire team, as they call it— was a fraction of 1 percent, no one would ever sign up for this. And we simply exposed that fact. The company has done their best to try to keep that from the general public.
This is one of the dangerous things about shorting a stock; technically the upside is unlimited.
The key to successful investing, especially when you're a contrarian, is to have people agree with you later.
Ackman didn't need the money. If his investors were the only ones who knew about his position, he could easily have said we're wrong, covered his position, and moved on. But apparently he would rather preserve his reputation than his investor's capital.
Aside from the mental and emotional costs of watching a stock you short go against you, there is an actual financial cost to borrow the shares. You would think that at some point, regardless of how compelling the case against Herbalife is, his investors will scream uncle.
Cullen Roche said, “The stock market is the only market where things go on sale and all the customers run out of the store….”
The spread between investment returns and investor returns is known as the behavior gap
The market is notorious for forcing unforced errors.
Druckenmiller reportedly earned 30% a year for 30 years by throwing conventional wisdom in the trash can: The first thing I heard when I got in the business, not from my mentor, was bulls make money, bears make money, and pigs get slaughtered.
so he took his gains and went back to where his bread was buttered, global macro.
“But I overplayed my hand.”
He couldn't bear to see Quantum grinding its gears as a bunch of small‐potato upstarts were racking up huge returns.
emotional basketcase
There's an old adage in finance, “Concentrate to get rich, diversify to stay rich.”
If you put in tens or maybe even hundreds of hours into researching a company, the sunk cost is very real, and potentially very expensive. The more time you've spent coming to a conclusion, the harder it is to change your mind.
you're more likely to add to the position than you are to come to the conclusion that you missed something. If you loved the stock at $100, at $90 you're buying more, and at $80 you're thanking the market gods for this opportunity
Mike Pearson was certainly shareholder focused, but that is where he and Warren Buffett's similarities ended. Talking about Pearson, Buffett said, “If you're looking for a manager you want someone who is intelligent, energetic, and moral. But if they don't have the last one, you don't want them to have the first two.”
The cost of raising a child today is $233,610. 1 This is a 41% increase over the past 15 years, or 2.3% a year. 2 From gasoline to food to education and raising children, prices tend to rise over time. Staying ahead of inflation is why millions of Americans invest.
the purpose of investing is to defer current consumption for future benefit
This is the most addictive game on the planet because it's a game that never ends. The pieces are always zigging and zagging and by the time you think you've got things figured out, new rules are implemented. Where are interest rates today and where are they going tomorrow? How has the economy performed over the past 12 months and what will the next 12 look like? How are markets behaving? And not just stocks, but what about currencies and commodities and real estate and bonds?
How fast is the overall market growing and how fast are investors expecting Apple to grow? Even if we have clairvoyance on the most important driver of long‐term returns, earnings, it wouldn't be enough to ensure success. The missing ingredient, which cannot be modeled by all the PhDs in the world, is investor's moods and expectations.
John Maynard Keynes. He once said that: Professional investment may be likened to those newspaper competitions in which the competitors have to pick out the six prettiest faces from a hundred photographs…each competitor has to pick, not those faces which he himself finds prettiest, but those which he thinks likeliest to catch the fancy of the other competitors…
Keynes wrote several international best‐selling books, revolutionized institutional asset management, and practically built the global monetary system as we know it. He designed England's financing of World War II, and he was hugely influential in designing the Bretton Woods agreement, which established the postwar global monetary system. When Keynes died, the obituary in The Times read, “To find an economist of comparable influence, one would have to go back to Adam Smith.” 11 Keynes was so far ahead of his time that when John Kenneth Galbraith reviewed his seminal work, The General Theory of Employment, Interest and Money
If you can buy something for less than its intrinsic value, you give yourself a better chance over the long‐term than trying to outguess your competition over the short‐term.
our portfolios are marked to market every day
Keynes is incorrectly attributed to have said: “It is better to be roughly right than precisely wrong.”
Quit while you're ahead. All the best gamblers do. —Baltasar Gracian
we tend to attribute the success more to skill than we do to randomness.
he specialized in merger arbitrage. This strategy involves simultaneously buying and selling short the stocks of two merging companies. The trade is executed based on the likelihood that the deal will close. But merger arbitrage is a relatively boring slice of the hedge fund world, and this strategy is not what put John Paulson on the map.
The problem was that you can't short a house, so they had to figure out a different way to bet against the market. They learned about credit default swaps, insurance contracts that allow you to bet against the debt of companies. His first foray into shorting the housing market was purchasing credit default swaps on MBIA Inc., which insured mortgage bonds. For $500,000 a year, Paulson could purchase $100 million worth of insurance against the debt of MBIA Inc. 10 In 2005, he bought more credit default swaps, this time on two big lenders, Countrywide Financial and Washington Financial.
We're all overconfident to begin with, and huge gains make our feet levitate off the ground.
he wanted to buy something that could become even more valuable in an inflationary environment. The answer was gold. Gold has lost 30% since its high in 2011. The following year, the fund slipped another 14%, and it still hasn't recovered.
Imagine that you were physically exchanging stock certificates with Jim Simons of Renaissance Technologies every time you went to buy or sell a stock. This is who you're playing against. The idea that you will stumble upon riches by dumb luck alone is possible, but a little naive.
Munger lost 31.9% in 1973 (versus a negative 13.1% for the Dow Jones Industrial Average) and another 31.5% in 1974 (compared to a –23.1% for the Dow). Munger said: “We got drubbed by the 1973 to 1974 crash
Anything that compounds for a long time must decompound at some point in time.
You know Steve Jobs and his early partner Steve Wozniak, but the name Ronald Wayne likely means nothing to you. Wayne was the third founder of Apple, but the reason his name is erased from the history books is because in 1976 he sold his 10% stake in the company for $800. 4 Apple is currently worth north of $900 billion!
You can't hold a candle to the Taiwanese and the Koreans. I was like no dice man, let this guy go.” GoPro went public in 2014 at a valuation just below $3 billion. He didn't think they could beat Google, which was developing its own file‐sharing service, Drive. He went so far as to recommend that Dropbox pursue a different path. Lucky for Dropbox, they didn't take his advice. Sacca estimates his decision to not invest in Dropbox cost him “hundreds of millions of dollars.” 13 At close to a $10 billion valuation, Dropbox is one of the biggest misses of Sacca's career.
Harry Markowitz who practically invented modern portfolio theory
I've cut my winners short and let my losers run.
I was sending my résumé all over the place, but I should have done more. I wish I had the chutzpah to email strangers and walk into branches, but I didn't yet have the confidence to do that.
I would later find out that this cognitive bias is so common that there's a name for it; it's called “the illusion of control.”
Overtrading is probably the most common mistake that novice investors make, and I was no exception.
If you are ready to give up everything else and study the whole history and background of the market and all principal companies whose stocks are on the board as carefully as a medical student studies anatomy‐ if you can do all that and in addition you have the cool nerves of a gambler, the sixth sense of 2 a clairvoyant and the courage of a lion, you have a ghost of a chance.
A lot of people will credit their success to luck, but you can usually tell when they're full of it, when it's a thin veil of false humility shrouded on top of a giant ego.
value investing is not a panacea. Cheap can get cheaper. Rich can get richer. Margins of safety can be miscalculated, and value can fail to materialize.
immune to the shortterm vicissitudes of the market
There are literally dozens of other companies which also have a quoted value less than their cash in bank…. This means that a great number of American businesses are quoted in liquidating value; that in the best recent judgment of Wall Street, these businesses are worth more dead than alive.
You'll never believe that a stock that falls 50% in a year might not necessarily be a bargain. You have to catch a few of these falling knives
“They said there are two sides to everything. But there is only one side to the stock market; and it's not the bull side or the bear side, but the right side.”
Paine Webber as a board boy, earning $6 a week. While he was learning about the market, young Livermore kept a journal, recording fictional trades. After 18 months of preparation, he visited a bucket shop, which were places where investors, mostly amateurs, could trade.
When our positions go against us, it's easy to hold on, but it's even easier to compound the problem by adding to the position. Adding to a losing position has been the downfall of many investors. “If you find yourself in a hole, stop digging.”
unlike Twain, had no problem cutting his losses.
The best way to avoid the catastrophic losses is to decide before you invest how much you're willing to lose, either in percentage or dollar terms. This way, your decisions will be driven by logic rather than fear
it doesn't just matter how smart you are, it matters how smart your competition is.
At one point, they had $1.25 trillion in open positions and they were levered 100:1. This leverage would lead to one of the largest disappearing acts of wealth the world has ever seen.
they calculated that their daily VAR, or value at risk (how much they could lose). It was the beginning of the end.
I rank this Bogle invention along with the invention of the wheel, the alphabet, Gutenberg printing, and wine and cheese
Michael Steinhardt is one of those people who was born to pick stocks. In his autobiography, No Bull, he talks about how his interest in stock investing began when he was 13 years old.
This isn't to say you should never venture outside your comfort zone, after all, if you never expand your horizons, you'll never learn. But if you are going to invest in areas that you're less familiar with, read the fine print, keep your investments small at first, and limit your losses to fight another day.
like bowling with bumpers in the gutters. He was throwing the ball as hard as he could, and it was working.
Don't confuse brains with a bull market!
Buffett certainly was aware of some of the business challenges Dexter faced, but as Alice Schroeder described in her wonderful biography, The Snowball, “Here he was a little outside his ‘circle of competence,’
Five years ago we had no thought of getting into shoes. Now we have 7,200 employees in that industry, and I sing “There's No Business Like Shoe Business” as I drive to work…. Finally, and of paramount importance, Harold and Peter can be sure that they will get to run their business – an activity they dearly love exactly as they did before the merger. At Berkshire, we do not tell .400 hitters how to swing.
Buffett and Munger made the mistake of not making sure the business had a moat and being too focused on what they thought was an attractive purchase price.”
Do you know more than the person on the other side of the trade? Do you know something that's not in the newspaper or on the Internet?
Know when you're wrong; use price levels, dollar loss levels, or percentage loss levels. Making decisions ahead of time, especially decisions that involve admitting defeat, can help conquer one of the biggest hurdles investors face
Daniel Kahneman say, “Ideas are part of who we are. They become like possessions.
Even when we're presented with evidence that disconfirms our previous views, straying far from our original feelings is too painful for most to bear.
By definition, activist investors are public, because once you acquire 5% of a company, you must file a 13D registration with the Security and Exchange Commission. Short positions, however, do not have to be disclosed
Herbalife, he contends, is a pyramid scheme. “Where your money's made is not serving smoothies. Where your money's made is having hundreds, or tens, or thousands of distributors around the globe who are working.”
No stone is left unturned. No cutlet is left uncooked, as Winston Churchill once said.
We simply want the truth to come out. If distributors knew the probability of making $95,000 a year – which is the millionaire team, as they call it— was a fraction of 1 percent, no one would ever sign up for this. And we simply exposed that fact. The company has done their best to try to keep that from the general public.
This is one of the dangerous things about shorting a stock; technically the upside is unlimited.
The key to successful investing, especially when you're a contrarian, is to have people agree with you later.
Ackman didn't need the money. If his investors were the only ones who knew about his position, he could easily have said we're wrong, covered his position, and moved on. But apparently he would rather preserve his reputation than his investor's capital.
Aside from the mental and emotional costs of watching a stock you short go against you, there is an actual financial cost to borrow the shares. You would think that at some point, regardless of how compelling the case against Herbalife is, his investors will scream uncle.
Cullen Roche said, “The stock market is the only market where things go on sale and all the customers run out of the store….”
The spread between investment returns and investor returns is known as the behavior gap
The market is notorious for forcing unforced errors.
Druckenmiller reportedly earned 30% a year for 30 years by throwing conventional wisdom in the trash can: The first thing I heard when I got in the business, not from my mentor, was bulls make money, bears make money, and pigs get slaughtered.
so he took his gains and went back to where his bread was buttered, global macro.
“But I overplayed my hand.”
He couldn't bear to see Quantum grinding its gears as a bunch of small‐potato upstarts were racking up huge returns.
emotional basketcase
There's an old adage in finance, “Concentrate to get rich, diversify to stay rich.”
If you put in tens or maybe even hundreds of hours into researching a company, the sunk cost is very real, and potentially very expensive. The more time you've spent coming to a conclusion, the harder it is to change your mind.
you're more likely to add to the position than you are to come to the conclusion that you missed something. If you loved the stock at $100, at $90 you're buying more, and at $80 you're thanking the market gods for this opportunity
Mike Pearson was certainly shareholder focused, but that is where he and Warren Buffett's similarities ended. Talking about Pearson, Buffett said, “If you're looking for a manager you want someone who is intelligent, energetic, and moral. But if they don't have the last one, you don't want them to have the first two.”
The cost of raising a child today is $233,610. 1 This is a 41% increase over the past 15 years, or 2.3% a year. 2 From gasoline to food to education and raising children, prices tend to rise over time. Staying ahead of inflation is why millions of Americans invest.
the purpose of investing is to defer current consumption for future benefit
This is the most addictive game on the planet because it's a game that never ends. The pieces are always zigging and zagging and by the time you think you've got things figured out, new rules are implemented. Where are interest rates today and where are they going tomorrow? How has the economy performed over the past 12 months and what will the next 12 look like? How are markets behaving? And not just stocks, but what about currencies and commodities and real estate and bonds?
How fast is the overall market growing and how fast are investors expecting Apple to grow? Even if we have clairvoyance on the most important driver of long‐term returns, earnings, it wouldn't be enough to ensure success. The missing ingredient, which cannot be modeled by all the PhDs in the world, is investor's moods and expectations.
John Maynard Keynes. He once said that: Professional investment may be likened to those newspaper competitions in which the competitors have to pick out the six prettiest faces from a hundred photographs…each competitor has to pick, not those faces which he himself finds prettiest, but those which he thinks likeliest to catch the fancy of the other competitors…
Keynes wrote several international best‐selling books, revolutionized institutional asset management, and practically built the global monetary system as we know it. He designed England's financing of World War II, and he was hugely influential in designing the Bretton Woods agreement, which established the postwar global monetary system. When Keynes died, the obituary in The Times read, “To find an economist of comparable influence, one would have to go back to Adam Smith.” 11 Keynes was so far ahead of his time that when John Kenneth Galbraith reviewed his seminal work, The General Theory of Employment, Interest and Money
If you can buy something for less than its intrinsic value, you give yourself a better chance over the long‐term than trying to outguess your competition over the short‐term.
our portfolios are marked to market every day
Keynes is incorrectly attributed to have said: “It is better to be roughly right than precisely wrong.”
Quit while you're ahead. All the best gamblers do. —Baltasar Gracian
we tend to attribute the success more to skill than we do to randomness.
he specialized in merger arbitrage. This strategy involves simultaneously buying and selling short the stocks of two merging companies. The trade is executed based on the likelihood that the deal will close. But merger arbitrage is a relatively boring slice of the hedge fund world, and this strategy is not what put John Paulson on the map.
The problem was that you can't short a house, so they had to figure out a different way to bet against the market. They learned about credit default swaps, insurance contracts that allow you to bet against the debt of companies. His first foray into shorting the housing market was purchasing credit default swaps on MBIA Inc., which insured mortgage bonds. For $500,000 a year, Paulson could purchase $100 million worth of insurance against the debt of MBIA Inc. 10 In 2005, he bought more credit default swaps, this time on two big lenders, Countrywide Financial and Washington Financial.
We're all overconfident to begin with, and huge gains make our feet levitate off the ground.
he wanted to buy something that could become even more valuable in an inflationary environment. The answer was gold. Gold has lost 30% since its high in 2011. The following year, the fund slipped another 14%, and it still hasn't recovered.
Imagine that you were physically exchanging stock certificates with Jim Simons of Renaissance Technologies every time you went to buy or sell a stock. This is who you're playing against. The idea that you will stumble upon riches by dumb luck alone is possible, but a little naive.
Munger lost 31.9% in 1973 (versus a negative 13.1% for the Dow Jones Industrial Average) and another 31.5% in 1974 (compared to a –23.1% for the Dow). Munger said: “We got drubbed by the 1973 to 1974 crash
Anything that compounds for a long time must decompound at some point in time.
You know Steve Jobs and his early partner Steve Wozniak, but the name Ronald Wayne likely means nothing to you. Wayne was the third founder of Apple, but the reason his name is erased from the history books is because in 1976 he sold his 10% stake in the company for $800. 4 Apple is currently worth north of $900 billion!
You can't hold a candle to the Taiwanese and the Koreans. I was like no dice man, let this guy go.” GoPro went public in 2014 at a valuation just below $3 billion. He didn't think they could beat Google, which was developing its own file‐sharing service, Drive. He went so far as to recommend that Dropbox pursue a different path. Lucky for Dropbox, they didn't take his advice. Sacca estimates his decision to not invest in Dropbox cost him “hundreds of millions of dollars.” 13 At close to a $10 billion valuation, Dropbox is one of the biggest misses of Sacca's career.
Harry Markowitz who practically invented modern portfolio theory
I've cut my winners short and let my losers run.
I was sending my résumé all over the place, but I should have done more. I wish I had the chutzpah to email strangers and walk into branches, but I didn't yet have the confidence to do that.
I would later find out that this cognitive bias is so common that there's a name for it; it's called “the illusion of control.”
Overtrading is probably the most common mistake that novice investors make, and I was no exception.
If you are ready to give up everything else and study the whole history and background of the market and all principal companies whose stocks are on the board as carefully as a medical student studies anatomy‐ if you can do all that and in addition you have the cool nerves of a gambler, the sixth sense of 2 a clairvoyant and the courage of a lion, you have a ghost of a chance.
A lot of people will credit their success to luck, but you can usually tell when they're full of it, when it's a thin veil of false humility shrouded on top of a giant ego.
September 8, 2023
Its a nice and harmless investing book. Probably best for a student to read as it's not very detailed but gives a good sense of some key ideas
October 11, 2021
Basically, this book provides a high-level summary of key principles from past and present investing and trading heavyweights like Benjamin Graham, Jesse Livermore, Mark Twain, Jack Bogle, Warren Buffet, Bill Ackman and Stanley Druckenmiller, to name a few.
The book is relatively easy to read as the author gave a brief summary of their accomplishments as well as some of their most expensive mistakes. However, nothing is new in the book and you can probably get a clearer and better idea by reading and researching into the respective individuals, individually.
What makes this a great book is for people with absolutely little or no experience in investing and the stock market, this book is then a great start to expanding your knowledge in the world of finance. 2.5/5 rounding down.
The book is relatively easy to read as the author gave a brief summary of their accomplishments as well as some of their most expensive mistakes. However, nothing is new in the book and you can probably get a clearer and better idea by reading and researching into the respective individuals, individually.
What makes this a great book is for people with absolutely little or no experience in investing and the stock market, this book is then a great start to expanding your knowledge in the world of finance. 2.5/5 rounding down.
May 9, 2019
A superficial book, thin and still littered with blank pages.
The individual chapters read like and have the length a mere blog, written from the perspective of the author, with zero insights. No input from the person who actually committed the error, or even anything on what and how it happened. Just compiled from a bunch of 2nd hand sources.
Feels like a rip off. I'd say 1.5 stars, but I give 1 and this review to prevent you from wasting your money on this extremely overpriced 'book' (pamphlet).
Terribly disappointing. Avoid.
The individual chapters read like and have the length a mere blog, written from the perspective of the author, with zero insights. No input from the person who actually committed the error, or even anything on what and how it happened. Just compiled from a bunch of 2nd hand sources.
Feels like a rip off. I'd say 1.5 stars, but I give 1 and this review to prevent you from wasting your money on this extremely overpriced 'book' (pamphlet).
Terribly disappointing. Avoid.
August 21, 2018
Resourceful
Big Mistakes tells you what went wrong with the great investors like
1. Benjamin Graham
2. Samuel Clemens (Mark Twain
3. John Bogle
4. Charlie Munger
5. Warren Buffett
6. Bill Ackman
7. Jesse Livermore
and other 9 legendary investors. What went wrong with them set them again on the right path, well some of them were busted for once and for all.
This book tells you there deadly mistakes that wiped out their wealth in a flash which took months, years, decades to build.
There are 15 stories of 15 great investors (Actually, there are 16 stories), who are well known, popular in the entire history of the stock market, investing & trading phenomenon.
You will get to read about 15 mistakes that you should not be doing while investing or trading in the stock market, commodity market.
However, the author, again and again, says, that Mistake Family is a big tree. You surely will avoid this 15, but you will end up inventing another. Or it might happen that you won't be able to control your urge to correct the mistake, despite knowing that you're doing this thing wrong and you're going to suffer, like Mark Twain aka Samuel Clemens suffered.
The interesting thing about this book is that after reading a brief on their Investing, trading career, you will want to read other books on them, written by them. You will wish to read more about their style, their lives, their career, their thoughts.
There are some movies, documentaries too if you like watching movies.
I just ended up watching a documentary on Bill Ackman and Herbalife on Netflix.
Do read this book.
It's a good read.
Akshat Solanki
Big Mistakes tells you what went wrong with the great investors like
1. Benjamin Graham
2. Samuel Clemens (Mark Twain
3. John Bogle
4. Charlie Munger
5. Warren Buffett
6. Bill Ackman
7. Jesse Livermore
and other 9 legendary investors. What went wrong with them set them again on the right path, well some of them were busted for once and for all.
This book tells you there deadly mistakes that wiped out their wealth in a flash which took months, years, decades to build.
There are 15 stories of 15 great investors (Actually, there are 16 stories), who are well known, popular in the entire history of the stock market, investing & trading phenomenon.
You will get to read about 15 mistakes that you should not be doing while investing or trading in the stock market, commodity market.
However, the author, again and again, says, that Mistake Family is a big tree. You surely will avoid this 15, but you will end up inventing another. Or it might happen that you won't be able to control your urge to correct the mistake, despite knowing that you're doing this thing wrong and you're going to suffer, like Mark Twain aka Samuel Clemens suffered.
The interesting thing about this book is that after reading a brief on their Investing, trading career, you will want to read other books on them, written by them. You will wish to read more about their style, their lives, their career, their thoughts.
There are some movies, documentaries too if you like watching movies.
I just ended up watching a documentary on Bill Ackman and Herbalife on Netflix.
Do read this book.
It's a good read.
Akshat Solanki
April 18, 2022
Valuable lessons without the price tag.
Financial mistakes: we all make them. From overdue library fees to parking fines, our financial mishaps can be frustrating – but they rarely cost us hundreds of millions of dollars.
And as it turns out, even the world’s most eminent investors miscalculate and end up deep in the red. Whether it’s overconfidence or an underperforming economy, it turns out the people we hold to be financial wizards are still just people too.
Here, Michael Batnick takes a select few investors and runs us through their worst investments. What’s more, he shows that we’re in a privileged position – by learning from the best’s mistakes, we receive the benefit of their hard-won wisdom without the cost of heavy losses.
Investing is a dangerous game – even for the most talented players. But by studying the greats and their greatest blunders, we can benefit from their mistakes without the million-dollar price tags. If you’re an amateur, you should focus on avoiding unforced errors rather than shooting for big wins, and if you do win, stifling overconfidence is crucial. Above all, don’t become attached to your assets: emotions like fear, anger, envy and greed are your portfolio’s worst nightmare.
Actionable advice:
Exercise due diligence and don’t over-trade.
If you’re new to the world of stocks and shares, you should know that making too many trades is one of the most common errors. Like a true venture capitalist, you should exhaustively research every company you plan to invest in and don’t be afraid to walk away. Warren Buffett once suggested that investors should act like they are only permitted to make 20 trades in their entire career. This way, you exercise extreme caution and keep yourself focused on high-quality trades.
Financial mistakes: we all make them. From overdue library fees to parking fines, our financial mishaps can be frustrating – but they rarely cost us hundreds of millions of dollars.
And as it turns out, even the world’s most eminent investors miscalculate and end up deep in the red. Whether it’s overconfidence or an underperforming economy, it turns out the people we hold to be financial wizards are still just people too.
Here, Michael Batnick takes a select few investors and runs us through their worst investments. What’s more, he shows that we’re in a privileged position – by learning from the best’s mistakes, we receive the benefit of their hard-won wisdom without the cost of heavy losses.
Investing is a dangerous game – even for the most talented players. But by studying the greats and their greatest blunders, we can benefit from their mistakes without the million-dollar price tags. If you’re an amateur, you should focus on avoiding unforced errors rather than shooting for big wins, and if you do win, stifling overconfidence is crucial. Above all, don’t become attached to your assets: emotions like fear, anger, envy and greed are your portfolio’s worst nightmare.
Actionable advice:
Exercise due diligence and don’t over-trade.
If you’re new to the world of stocks and shares, you should know that making too many trades is one of the most common errors. Like a true venture capitalist, you should exhaustively research every company you plan to invest in and don’t be afraid to walk away. Warren Buffett once suggested that investors should act like they are only permitted to make 20 trades in their entire career. This way, you exercise extreme caution and keep yourself focused on high-quality trades.
March 30, 2025
I liked it, but I also sometimes listen to the Animal Spirits podcast so the author wasn't known to me. I have no idea why others have any problems with a possible format of collection of blog posts. Then go write a book yourself. Just because chapters are well-separated? I've read dozens of investing books yet this still managed to tell me stories that were new. I didn't enjoy the numerical examples much, as my imagination is wild enough to fathom big numbers (well, except when a fund manager gets paid billions per year and how much that is per second lol). I think the takeaway is that you can't avoid losses (let alone errors of omission) and the best you can do is regret minimization. It was nice to recap a mistake that I already knew, Buffet and that shoe company he used to buy for Berkshire stock, but in the end it turned out to matter little, he still got a record-breaking track record and all the billions he can dream of. So a few hiccups along the road are not the end of the world, even if they sometimes mean third or half of your porfolio, haha. It was also good to know that those 10- or 100- or more-baggers that are often brought up like examples of true compounders, like Amazon, periodically lost 50-90% as part of their journey. It's nice to be reminded of that when you plan to HODL these. In the end most mistakes seemed to be arising from a mismatch of investment horizons and goals, or trying to win big repeatedly (like that guy who won in the crisis but then decided to buy gold as an inflation hedge). Often this tells me too much activity is worse than missing a few trains. He is a CFA a works with/under(?) Nick Maggiulli at Ritholtz btw.
August 29, 2018
As Warren Buffett once said: "It's good to learn from your mistakes. It's better to learn from other people's mistakes." This is the motto of this book by Michael Batnick. Each chapter covers a famous investor (in most cases, investors with very successful careers) and goes on to list costly mistakes committed by each of them. The idea is great and there's definitely quite a lot of good content here.
The problem I found is that I hoped for some more insight in a few situations. It would be good if the author had been able to talk to some of the featured investors so that we could understand more about their thinking both at the time of the mistakes reported and also now with the benefit of hindsight. Without this, I commonly felt as if the chapters just weren't as detailed as they could be, which left me wanting more.
Even so, the book still managed to grab me and I couldn't help but to be humbled by the fact that many brilliant investors still got caught in apparently simple pitfalls at some point in their careers. Investing is as much (or even more) a psychological endeavor as a technical one and if there's one thing to learn from a book like this is that we should always strive to understand the biases that can affect our investments, otherwise we'll probably suffer for it.
The problem I found is that I hoped for some more insight in a few situations. It would be good if the author had been able to talk to some of the featured investors so that we could understand more about their thinking both at the time of the mistakes reported and also now with the benefit of hindsight. Without this, I commonly felt as if the chapters just weren't as detailed as they could be, which left me wanting more.
Even so, the book still managed to grab me and I couldn't help but to be humbled by the fact that many brilliant investors still got caught in apparently simple pitfalls at some point in their careers. Investing is as much (or even more) a psychological endeavor as a technical one and if there's one thing to learn from a book like this is that we should always strive to understand the biases that can affect our investments, otherwise we'll probably suffer for it.
July 21, 2018
Aside from the fascinating stories, and terrific writing, there are three elements of this book that other non-fiction authors should emulate. 1) It can be read out of order. Each chapter stands up on it's own as an incredible story. 2) It's brief. It seems like every book I pick up needs to be roughly 300 pages, regardless of whether or not there is worthwhile content to fill the space. 3) It's a unique angle on a familiar topic, things that really successful people have done. Rather than reading about wins, you're reading about instructive losses.
A nice primer on recognizing some of the pathways to investor ruin. Far from an obligatory investing self-help book, Big Mistakes recounts the circumstances of failure from investing legends with Midas reputations. These failures remind us that, for all of the technology out there, investing is a human endeavor. Michael does a nice job of making complicated concepts accessible. The real gift in the book is its organization around specific incidents and not a recitation of psychological biases. The reader benefits from this terrific organizational decision. Well worth the read for all levels of investors.
A nice primer on recognizing some of the pathways to investor ruin. Far from an obligatory investing self-help book, Big Mistakes recounts the circumstances of failure from investing legends with Midas reputations. These failures remind us that, for all of the technology out there, investing is a human endeavor. Michael does a nice job of making complicated concepts accessible. The real gift in the book is its organization around specific incidents and not a recitation of psychological biases. The reader benefits from this terrific organizational decision. Well worth the read for all levels of investors.
March 18, 2019
Investing is a dangerous game – even for the most talented players. But by studying the greats and their greatest blunders, we can benefit from their mistakes without the million-dollar price tags. If you’re an amateur, you should focus on avoiding unforced errors rather than shooting for big wins, and if you do win, stifling overconfidence is crucial. Above all, don’t become attached to your assets: emotions like fear, anger, envy and greed are your portfolio’s worst nightmare.
Actionable advice:
Exercise due diligence and don’t over-trade.
If you’re new to the world of stocks and shares, you should know that making too many trades is one of the most common errors. Like a true venture capitalist, you should exhaustively research every company you plan to invest in and don’t be afraid to walk away. Warren Buffett once suggested that investors should act like they are only permitted to make 20 trades in their entire career. This way, you exercise extreme caution and keep yourself focused on high-quality trades
Actionable advice:
Exercise due diligence and don’t over-trade.
If you’re new to the world of stocks and shares, you should know that making too many trades is one of the most common errors. Like a true venture capitalist, you should exhaustively research every company you plan to invest in and don’t be afraid to walk away. Warren Buffett once suggested that investors should act like they are only permitted to make 20 trades in their entire career. This way, you exercise extreme caution and keep yourself focused on high-quality trades
August 28, 2018
This was an interesting book but it was unforgivably poorly written/edited.
This following half-paragraph is directly quoted from the author's section ABOUT HIMSELF:
"I received a third legitimate opportunity, this time outside of finance. I didn't really care because I had gone two years without a job, and I just wanted to get on with my life. It was now two years without a job, and I just wanted to get on with my life"
Like seriously? The book was only 160 pages, and fully 1/5 of those were blank or chapter title pages. How much of a hurry were you in to get this out that you didn't even skim it after writing it?
And this was just the most glaringly obvious of many confusing gramitical choices - the fact that the frequency of non sequiturs increased with the page number left me thinking that this was written in 1 day, maybe less than that.
Safe to say I won't be buying another book published by Bloomberg. I feel like a right idiot for spending $24 on this.
This following half-paragraph is directly quoted from the author's section ABOUT HIMSELF:
"I received a third legitimate opportunity, this time outside of finance. I didn't really care because I had gone two years without a job, and I just wanted to get on with my life. It was now two years without a job, and I just wanted to get on with my life"
Like seriously? The book was only 160 pages, and fully 1/5 of those were blank or chapter title pages. How much of a hurry were you in to get this out that you didn't even skim it after writing it?
And this was just the most glaringly obvious of many confusing gramitical choices - the fact that the frequency of non sequiturs increased with the page number left me thinking that this was written in 1 day, maybe less than that.
Safe to say I won't be buying another book published by Bloomberg. I feel like a right idiot for spending $24 on this.
March 11, 2019
I should start by saying that I'm a huge fan of Batnick and the entire Ritholtz WM crew. They routinely provide thoughtful, interesting and often hilarious commentary on personal finance and investing through their various blogs. Michael, in my opinion, is rivaled only by his colleague Ben Carlson on the RWM blogger power rankings. So it was disappointing that Michael's book was sloppy and shallow. Most of the narratives have the depth of a Wikipedia article - an opening unrelated anecdote, transition to a couple of pages of background on the investor in question, and then a page or two tops on the "mistake" in question. What's more, the book is riddled with typos and grammatical errors. Any one of these chapters would be a subpar blog post from Michael; to see 15 of them strung together in a book is borderline shocking. The one exception - and the book's redeeming section - is Michael's personal narrative in the last chapter, which is poignant and moving.
July 22, 2018
I am a big fan of Mr. Batnick's blog - The Irrelevant Investor - and was eager to read this book. This is a very easy and quick read. It is well written. For those of you beginning your investing journey, you will most probably read and forget or unable to relate to the stories. My advice is, don't. Re-read every now and then. It may not be relatable now, but as you go through your investing journey/education, it will be.
For those with a bit more investing experience and have read many other books, this book is a collection you've read/heard before. It would have been a significantly better book if Mr. Batnick had interviewed the investors featured who are still around - have them provide more color to the mistakes described. I particularly enjoyed the last chapter, that for me is worth the price of the book.
For those with a bit more investing experience and have read many other books, this book is a collection you've read/heard before. It would have been a significantly better book if Mr. Batnick had interviewed the investors featured who are still around - have them provide more color to the mistakes described. I particularly enjoyed the last chapter, that for me is worth the price of the book.
August 18, 2018
I was actually going to give this book four stars until I read the last Chapter. Mike did a great job tying everything together at the end and incorporating the famous investors experiences, that he highlighted, into his own development as an investor.
This book is basically a compilation of stories about some of the world’s most famous investors (Buffet, Munger, Livermore, Twain, Ackman, etc) and then a brief analysis of what we can learn from their mistakes.
I wish that some of the stories had offered greater detail and that the analysis had been more detailed as well. In summary, I wish the book had been longer- I liked it that much! The original four stars would have been due to this brevity.....overall, well done!
This book is basically a compilation of stories about some of the world’s most famous investors (Buffet, Munger, Livermore, Twain, Ackman, etc) and then a brief analysis of what we can learn from their mistakes.
I wish that some of the stories had offered greater detail and that the analysis had been more detailed as well. In summary, I wish the book had been longer- I liked it that much! The original four stars would have been due to this brevity.....overall, well done!
October 20, 2022
The book is poorly written. It is artificially long. The "lessons" at the end of each chapter aren't clear and/or are superficial. The final chapter, written by Batnick about Batnick, is self serving and self-aggrandizing. I also cannot help but see Batnick, Josh Brown, and Ritholz hand this book out at the end of potential client meetings saying "Read this, it is hard to beat the market. Index with us".
That said, if you are able to look past all that, it is interesting and there are lessons to be learned and an excellent reminder that the best aren't infallible. It made me reflect on my own mistakes and served as a good reminder on others. And I did enjoy a book on mistakes, versus successes. As Charlie says...
That said, if you are able to look past all that, it is interesting and there are lessons to be learned and an excellent reminder that the best aren't infallible. It made me reflect on my own mistakes and served as a good reminder on others. And I did enjoy a book on mistakes, versus successes. As Charlie says...
August 24, 2018
A quick, enjoyable read. Batnick shows us that even the best investors have made mistakes (the only people who have delivered returns without drawdowns are those like Bernie Madoff...). Each chapter is a nice concise short read - that provides a well researched account of an investor that highlights where they have gone wrong, tying it together with aspects of psychology and behavioural economics that show why we are vulnerable to the same mistakes.
Obviously, if you want more detail that this is the wrong book - if you want to know more you will definitely need to do more research. But as a quick pickup for small breaks it is perfect.
Obviously, if you want more detail that this is the wrong book - if you want to know more you will definitely need to do more research. But as a quick pickup for small breaks it is perfect.
October 26, 2019
Good: anecdotes of a diverse menu of investors and their career failures. Gives you a good rundown/sparksnotes on the investors from days of tape reading to today, the convenience of tech co. incl Google, Amazon, so on. Language is easily readable, kind you'd find in Forbes or Huffington Post. not a technical book, though technical terms are casually thrown here and there. You'll learn more about emotional/psychological regulating as an investor, or for life in general, than analysis.
Bad: you can come up with this list of investors and research this info yourself via each investor's bio.. maybe others may disagree?
Bad: you can come up with this list of investors and research this info yourself via each investor's bio.. maybe others may disagree?
February 24, 2021
I picked up this book following one of the Mungerisms - "If you tell me where you are going to die, then I will just not go there", It is easy to prevent known mistakes rather than trying to be smart. And, perhaps this was the only book(at least I could just find one), which compiles investment mistakes of various big behemoths. The book is well researched and has a good collection of mistakes, however, to get the most value with this book, the reader should be ready to combine the reading with her own research as it does not go deep in to the context of each mistake and hence derive her own learnings/conclusions. However, this positively results in a shorter book(~160 pages).
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