Investment Policy: How to Win the Loser's Game

by Charles D. Ellis

Offers advice for the clients of professional investment managers in becoming actively involved in the administration of investment funds and adds a new chapter with advice for individual investors

Genres: Finance, Nonfiction, Business, Economics, Personal Finance, Money, Buisness

94 pages, Paperback

First published September 1, 1985

About the author

Charles “Charley” D. Ellis is an American investment consultant. In 1972, Ellis founded Greenwich Associates, an international strategy consulting firm focused on financial institutions. Ellis is known for his philosophy of passive investing through index funds, as detailed in his book Winning the Loser’s Game.

Reviews

[Eric · Rating 1 out of 5]

Obviously the author was a successful investor. However, this book is a load of crap. He is a paid shill for Vanguard, American Funds, and T. Rowe Price (he does disclose in the book). His mantra is that active asset management doesn't work and the best funds are the cheapest. Being an investment professional, I have yet to find any of the "cheap" funds from Vanguard anywhere near the top 25% in performance. His incessant harping on indexing as the only way to invest doesn't answer the question of which indices to choose, when to sell one index and buy another, or how to allocate between the 6 asset classes. He is just like the government regulators who think that all investment professionals are constantly screwing the public because we charge for our services and cant predict the futures. I don't have a clue on how to do many things in this world so I guess I am being screwed because I hire others to build decks, reside my house, or replace my driveway. Using the author's logic, I should be able to learn these things on my own and am stupid for paying others to do things I don't want to do.

On a positive note, I did pass the course the book was tied to so now I have the ability to be a discretionary portfolio manager. I suppose the author would now warn you to watch out for me!

[Steven · Rating 4 out of 5]

For me personally, there was nothing new in this book that I haven't already read elsewhere. So while I didn't particularly enjoy it, I would recommend it for the average person who has a retirement account and needs to learn some basics. It contains some very basic and prudent investing advice. The basic premise is to invest properly, you must act like an amateur tennis player and make less mistakes. Professionals win points with their skill - amateurs lost fewer points than their opponents.

What does this means in practical terms? Mainly, get involved. You must take charge of your investments and your future. Keep a close eye on fees (low cost ETF's are a great option). Third, invest for the long term. Fourth, write down you strategy on paper because we're humans and we have this weird tendency to pull money out of investments and buy them, both at the worst times. Having a written game plan can help you stay on track. Good stuff and a good book for anyone wanting to develop a deeper understanding of investing and take charge of their retirement and financial future.

[Mark · Rating 2 out of 5]

A short book with lots of difficult vocabulary about investing that concentrates too much on institutional investors especially through the beginning of the book. Ellis highlights a few central themes at the beginning about risk, returns, and portfolios with similarities to the points of Bernstein and Malkiel, but he explains in doing so how your investment manager should be watched. Ellis notes investment managers who happen to do very well, should be doing so within the predetermined risk tolerance of the investment, otherwise they eventually will do very poorly. He reiterates this regression to the mean phenomenon, suggesting that one chooses competent stocks and investors that have recently done poorly like Bernstein. He appears to think very little of bonds, especially for those who are investing longer than 20 years, even noting people at retirement probably don’t risk enough, and thoroughly shows how inflation has a profound affect on shrinking investments. Most of the knowledge is geared to more serious investors and profession investment management like college trusts, but there are enough interesting points to make it worthwhile, especially near the end of the book. Much of it agrees with the other index oriented books of Bernstein and Malkiel highlighted earlier.

[Ryan · Rating 2 out of 5]

Basically the same message as A Random Walk Down Wall Street except for the writing style is more boring. I recommend Malkiel's book, it's more entertaining and will teach you the same lesson

[InvestingByTheBooks.com · Rating 5 out of 5]

This is one of the books that actually changed the world - well the investment world at least. Starting in the 1950’s, Harry Markowitz and others in academia developed what later became modern portfolio theory (MPT). The thing was that the investment industry didn’t really pick up on these novelties. That is, not until the first edition of this book in 1985 and the paper Determinants of Portfolio Performance the following year by Brinson et. al. After that the investment business was changed for ever. Mr Ellis, the most influential investment writer of the age, was for 30 years not only the managing partner of Greenwich Associated investment advisors to a huge number of financial organizations but also found time to teach at Harvard and Yale and to sit on a number of endowment boards.

The real gem in this book is the concept of the loser’s game. Ellis offers the analogy of tennis and concludes that this sport could actually be two different types of games. Tennis played by amateurs is a loser’s game as the outcome is determined by the mistakes of the loser. Professional tennis players make very few mistakes so it’s a winner’s game where the outcome is determined by the winner’s initiatives. Professionals win points, amateurs lose points. Investments have according to Ellis turned into a loser’s game. Most professional investment managers are extremely skilled and combined they have enough capital to almost become the market. This then makes it extremely hard for any one of them to regularly beat the market.

In a loser’s game the one that makes the least strategic mistakes win. In Ellis analysis too many in the investment business focus on the nearly impossible task of beating the market but too few investment managers try to understand the needs of their clients. The conclusion is that focus should shift to setting up a clearly written investment policy with an asset allocation that truly caters to those needs. Asset mix is what counts and market timing, stock selection and changes in portfolio strategy should be downplayed.

Despite its importance this is a very short book. It’s also a very likable book where you clearly feel that the author wants to help his readers to make better decisions. The concept of the loser’s game is presented early and the consequences of this then follow when it comes to portfolio building, risk management, policy setting, performance measurement etc. All this in less than a hundred pages (which might be the reason for the impact in the investment industry).

To be honest the book feels quite a bit dated. MPT has dominated the investment arena for the last decades and its critics are getting louder. Two large stock market crashes the last ten years has not helped to boost the popularity of static asset mixes that is periodically rebalanced. Putting the area of behavioural finance aside and the challenge it post to modern portfolio theory, I think the most serious critique of Ellis conclusions is that they miss the time varying nature of expected returns of the different asset classes. Very few of the clients Ellis discusses really have 50 years long time horizons. For the next 5 to 10 years the expected returns of the equity market, of bonds of commodities etc. will due to the current valuation, the amount of overcrowding and the economic environment be vastly different from the long run averages.

This was very innovative work for its time. It’s not anymore, but I would still recommend the book to anyone who wants to understand how the investment business got to where it is today. The thoughts in this book should be part of any market participant’s tool box but the industry also has to move on from this – I’m not sure everybody in it has.

[Jayson Cabrera · Rating 4 out of 5]

Recently, I have been wondering about the deeper insights into investing to see what is beyond trend readings and the rising or falling slopes of stock price graphs. More like, how to understand the market rather than understanding which possible company has potential.

I decided to pick up this book as I knew completely nothing and desired to learn the absolute basics, so I googled something along the lines of, 'books for stock market beginners' and this book arose.

Although it exceeded my expectations, I gave it 4/5 stars instead of 5/5 for exactly that reason. It exceeded my expectations. I thought the book was going to tell me about the bare basics of the market, explain the intricacies of things like what are index funds, mutual funds, ETF's, and the differences between them. But I think they expected the reader to already know that. Even though the author didn't define basic terms, he for sure still had really good points that I never thought of and will stick in my mind.

Maybe its my lack of common knowledge, but I also believe that one book cannot contain all the information you need. I think I have to read more books by different authors about the same topic.

[Vikash Anand · Rating 4 out of 5]

Winning the Losers Game by Charles D. Ellis is a good book to understand the intricacies in the field of investment. Reading Winning the Loser’s Game significantly improved my understanding of the field of investment. In this article, I am summarizing the major learnings form this book.

In a winner’s game, the outcome is determined by the correct actions of the winner. In a loser’s game, the outcome is determined by the mistakes made by the loser. It’s like professional tennis is a winner’s game. The outcome is determined by the actions of the winner. Amateur tennis is a loser’s game. The outcome is determined by the actions of the losers, who defeat himself.

In order to improve the probability of being a successful investor, it’s important to understand the economics of investment profession. The Fund Manager may be making money for themselves, rather than making money for you. The brokerage firms may be charging outrageous commissions, but it may not be felt as the charges appear small/miniscule in percentage terms but if it is carefully analyzed over a period of time it becomes significant. It’s important to minimize the mistakes/big mistakes as it can result into permanent loss of capital. Without understanding the intricacies of the investment field, it will be difficult to minimize mistakes.

And the best way to minimize the mistakes or play Winners Game rather than Winning the Losers Game is to do passive investment i.e. index investing. It results into Win-Win Game for everybody.

If the taxes, commissions and fees are taken in account, most investment managers are not beating the market, the market is beating them. It’s very difficult to consistently beat the market. This is the scenario in USA, in India things may be currently different. But with the flow of very large funds, it might be the case in India in distant future of 15-20 years.

But still if one wants to beat the market through active investment through mutual fund, it’s important to understand that the size may become enemy of performance in the field of investment. Large funds require more and awesome ideas of investment. Large funds compete to win by investing in large companies that are heavily researched and efficiently priced. Smaller funds have a distinct advantage in the performance, choosing among less heavily researched and less efficiently priced securities. Consistently outperforming the market over a longer and longer period of time in a highly efficient market like USA is extremely difficult even for a professionally acclaimed Fund Manager.

But still if one wants to beat the market by building our own portfolio by directly selecting stocks, as the market of India may not be that highly efficiently priced as compared to USA. There may be lots of opportunities to invest. But to spot the opportunity and have confidence & conviction to invest significantly it’s important to understand the quality/competitive advantage of the business, the capability of the management. The lack of understanding tends to make us too cautious in bear market and too confident in bull markets. Knowledge and understanding of the business is crucial. The winner and losers will be decided by the estimates of future dividends and earnings. It will vary from investor to investor depending upon the understanding & judgement. It will fluctuate due to changes in expectations for long term economic & industry growth, cyclical fluctuations in demand, prices, taxes, discoveries & inventions, competition at home & abroad, and so forth. The longer the future period over which estimates of earnings and dividends are taking into account, the greater the uncertainty that needs to be taken into account. As the holding period over which an investor owns an investment lengthens, the importance of the discount factor decreases if it goes as estimated, and the importance of corporate earnings & paid dividends increases.

The mistakes & risks that need to be minimized are various;

Investing in a stock at too high price

Interest Rate risk if it goes more than anticipated

Business Risk if the company blunders i.e. make wrong acquisitions & mergers, hampering the earnings & profitability of the business

Failure risk of the business, a business may fail completely & file bankruptcy

Warren Buffet rightly said that the field of investment is simple, but it’s not easy. Taking into account all the estimates, minimizing the mistakes & risks is definitely not easy. It requires lots of judgment to improve the probability of being successful in the field of investment.

[Jason Born · Rating 3 out of 5]

Simple is usually best. In this case, the simplification takes away from real world issues that clients can have regarding their allocation and actual needs for money at inopportune times in the market. But there are worse books.

[Corey Benov · Rating 5 out of 5]

Should have read this book years ago. Not exactly up to date but that doesn’t matter when it comes to principles preached in this book.

[Vincent · Rating 4 out of 5]

I should have read this book years ago. Instead, for the last decade or so I’ve relied on two separate investment advisors who fit all the characteristics the the author describes and made the mistakes he points out (e.g. getting into “hot funds” then selling at a low point). And both made more money from my account than I have.

I think his advice for a long term portfolio is good, but I’d like to have seen more discussion on how to get to it short of putting all your money into “an index fund “.

[Thomas Margot · Rating 2 out of 5]

Same book as all the other popular investment books but obnoxiously repetitive and so dreadfully boring. 200 pages of "Buy index funds". Not bad advice but others do it better.

[Nick McDonald · Rating 4 out of 5]

Kind of repetitive but very helpful for me! Katie and Polly would love.

[Aaron · Rating 4 out of 5]

decent book. satisfying that he says a lot of the things that I say to clients.

like all self-investing books - they trash on the industry but at least he does say some help from an RIA/IAR can be a good thing. He's suggesting fee for service - which if you can handle your own temperament and not freak out can be a good thing. But many can't and need the ongoing handholding I do.

of the self-investment books I think he does a better job at being realistic toward the help I'd provide - so many just trash everything about advisors.

some of his math and analysis is pretty simplistic, but that probably goes toward the audience.

good book for anyone wanting to learn more.

[Tom · Rating 3 out of 5]

I agree with much of the premise of the book, but it suffered from several flaws in my opinion. There was far too much repetition during the first two-thirds of the book. The basic premise that individual investors should stick to index funds due to the pitfalls of active management was made very clear in the opening chapters, then repeated over and over again for the first 20 chapters without much new commentary/data/reasoning. I also disagree with the premise to keep 100% of your investments in stocks even if you are near/in retirement due to the risk/return timeline of your heirs who you may pass money on to. He did partially backtrack towards the end on this suggestion but did far too little in describing the role bonds can play in a diversified portfolio. Lastly, the book seemed to turn into several random directions towards the end: becoming a general personal finance book at times, speaking on better ways for companies to set up a 401k, even discussing an extremely esoteric trust structure that the Kennedy family used to save on taxes.

The book did have a few high points for me, most notably when discussing the impact of fees from active management. The author included the same charts that I have seen elsewhere about the impact on returns over time of even a 1% fee of total assets paid for active management. These are certainly helpful for those who have not come across this concept before. However, his discussion of that 1% fee in relation to the expected market return of an index fund and the expected "alpha" that active management may or may not generate, rather than thinking about active management fees of "just 1% of assets", was illuminating to me.

[Roy · Rating 2 out of 5]

Readers who are already familiar with the works of Burton G. Malkiel and William J. Bernstein will most likely find nothing new in this book, which can pretty much be summed up in one sentence: Buy index funds/ETFs and invest for the long term. With that said, the book does a good job of explaining why most ordinary investors should not aim to maximize investment returns, but rather to lower costs and curb excessive risk taking. To that end, buying and holding low-cost index funds or ETFs is the best and least complicated option for long-term minded investors. In other words, he argues since the overwhelming majority of everyday folks are at a huge disadvantage against institutional investors and professionals equipped with advanced economic models, first-hand company research, and other exclusive resources, they should forget about earning market-beating returns and simply diversify their investment among several index funds.

However, the book is mostly about the guiding principles of long-term investing, but doesn't provide enough details as to which index funds to buy, when to sell one and buy another, and how to allocate one's money among asset classes.

[Hong · Rating 3 out of 5]

SUMMARY
Individual investors should invest in equity-based index funds around the globe, have a time-horizon of decades and follow explicit, well-thought policies. T-bills, bonds, real estate, commodities and mutual funds are poor investments compared to equities.

REVIEW
Too much on why mutual fund sucks and why it is important to diversify. "it is more rewarding to study investment history than to study the present", I wish to find a detailed discussion on the great depression, the high interest rate era in 1980s, etc.

Although 95% of this book doesn't give me anything new, I do find a few gems scattered across the pages.

[Karen · Rating 4 out of 5]

This book provides a lot of background information on how the stock markets work (and how it is the Loser's Game). It provides a lot of strategies that you've probably heard before, such as:
- magic of compounding
- diversify your investments
- you can't outplay the professionals, so go with index funds or, better yet, ETFs
- play the long game, timing the market is just too difficult

Recommended if you want to learn more about investing.

[Mark Thomas · Rating 4 out of 5]

Excellent book about investing. Very accessible to those who may not be monetary experts. Clear cut, concise and easy to follow instruction on how to invest in ways that minimize risk, keep expenses lower and to yield returns that can meet the individual investors needs.

Recommended to me by a friend. A good suggestion...that I'll pass along to you.

[being Cristina · Rating 4 out of 5]

Plenty of straightforward advice, practical and actionable. This is a good book for beginners as they can really save time and energy when they apply the wisdom from this book.

[Brian · Rating 4 out of 5]

Good, but long way of saying: Pick low-cost index funds over other mutual funds to guarantee you're in the top 12.5% of all mutual funds.

[Sjors · Rating 3 out of 5]

Pretty solid book about investing. Not as much analysis as I would have liked to see but pretty solid. Excellent point made about the (unreasonably) high fees of actively managed investment funds. At 1% of AUM and a typical 7% annual return, the fees are actually consuming 14% of the total gains at zero risk to the fund manager. Also interesting points made on how timing the market and stock picking are essentially hopeless endeavors. Author advocates strongly for passive broad Index funds to surf the great wave of historical outperformance, and to never waver. In my views, index funds do definitely have a place at the core of an investment portfolio, but should by no means be the only tool in the box.

Oh, and I liked the distinction between the winner's game and the loser's game. Let me quote here at length:

"Dr. Simon Ramo, a scientist and one of the founders of TRW Inc., identified the crucial difference between a winner’s game and a loser’s game in an excellent book on game strategy, Extraordinary Tennis for the Ordinary Tennis Player. Over many years, Ramo observed that tennis is not one game but two: one played by professionals and a very few gifted amateurs, the other played by all the rest of us.

Although players in both games use the same equipment, dress, rules, and scoring, and both conform to the same etiquette and customs, they play two very different games. After extensive statistical analysis, Ramo summed it up this way: Professionals win points; amateurs lose points.

In expert tennis, the ultimate outcome is determined by the actions of the winner. Professional tennis players hit the ball hard with laserlike precision through long and often exciting rallies until one player is able to drive the ball just out of reach or force the other player to make an error. These splendid players seldom make mistakes.

Amateur tennis, Ramo found, is almost entirely different. Amateurs seldom beat their opponents. Instead, they beat themselves. The actual outcome is determined by the loser. Here’s how: brilliant shots, long and exciting rallies, and seemingly miraculous recoveries are few and far between. The ball is all too often hit into the net or out of bounds, and double faults at service are not uncommon. Rather than try to add power to our serve or hit closer to the line to win, we should concentrate on consistently getting the ball back so the other player has every opportunity to make mistakes. The victor in this game of tennis gets a higher score because the opponent is losing even more points."

[Alberto · Rating 3 out of 5]

Básicamente este libro lo que hace es recomendar a los inversores en productos financieros a seguir una postura de inversión pasiva invirtiendo en ETFs (Exchange Traded Funds) o Fondos Indexados. Estos fondos no hacen más que replicar cualquier índice de la elección del inversor (Eurostoxx, S&P, Nikkei, Renta Fija, materias primas...). El autor anima al inversor a crear una cartera bien estructurada y diversificada de ETFs de manera que se cubra la totalidad de la economía mundial y dejarla fluctuar en base a una clara política de inversión a Largo Plazo. El autor defiende que (a la larga) esta estrategia es MUCHO más rentable que una estrategia de inversión Activa. En una estrategia de inversión activa, los consultores financieros intentan batir al mercado comprando y vendiendo títulos activamente, sin embargo, raramente lo consiguen. El autor justifica este razonamiento en que (1) el mercado es tan complejo y hay tantos profesionales con tantos recursos y tan bien informados, que es MUY difícil (casi imposible) estar en el cuartil más alto del mercado de forma permanente. Además, las comisiones aplicadas por este tipo de fondos son mucho más altas que las de las ETFs. Si además sumamos la fiscalidad negativa de los fondos y el dinero que nos cobran los asesores activos.... el resultado es que el modelo inversión PASIVA es MUCHO más rentable A LARGO PLAZO (y mucho más tranquilo) que la gestión ACTIVA.
Para conseguir este objetivo hay que aguantar los vaivenes del mercado que tendrá épocas de grandes crisis, pero que en el LARGO PLAZO siempre acaban mitigándose con posteriores subidas. Es MUY importante tener paciencia y sangre fría para aguantar las posiciones en las épocas de crisis.

RESUMEN DE CHAT GPT

Autor: Charles D. Ellis
Publicado: 1975 (con varias ediciones revisadas)
Género: Finanzas / Inversión / Estrategia de inversión
________________________________________
Idea principal
“Winning the Loser’s Game” es un clásico de la inversión que desmitifica la búsqueda de superar al mercado.
Ellis sostiene que para la mayoría de los inversores ganar como profesional activo es extremadamente difícil porque competir directamente contra expertos y grandes instituciones es como jugar “el juego del perdedor”: las probabilidades están en contra.
En cambio, la estrategia más efectiva consiste en adoptar un enfoque disciplinado, pasivo y de largo plazo, aprovechando la eficiencia del mercado y minimizando errores.
________________________________________
1. El juego del perdedor vs. el juego del ganador
• Juego del perdedor: intentar vencer al mercado mediante movimientos frecuentes, predicciones o selección de acciones individuales.
o La mayoría de los inversores individuales y profesionales fracasan en este enfoque.
o Genera altos costos de transacción, errores emocionales y pérdidas.
• Juego del ganador: enfocarse en estrategias simples, consistentes y de largo plazo, como fondos indexados y diversificación.
o El objetivo no es superar al mercado todos los años, sino evitar errores costosos y participar en el crecimiento global de la economía.
________________________________________
2. El costo de los errores
Ellis explica que los errores de juicio, las decisiones emocionales y los costos de transacción son los principales responsables de los malos resultados de los inversores.
Reducir estos errores, en lugar de intentar batir al mercado, es la estrategia más segura para generar riqueza a largo plazo.
________________________________________
3. La importancia de la paciencia y la disciplina
Invertir con éxito requiere un enfoque a largo plazo y disciplina constante:
• Mantener la calma durante caídas del mercado.
• Evitar decisiones impulsivas basadas en rumores o emociones.
• No dejarse seducir por modas financieras o estrategias complicadas.
“Ganar el juego del perdedor significa no perder más de lo que el mercado te da.”
________________________________________
4. Diversificación inteligente
Para reducir riesgos, Ellis enfatiza la diversificación de activos:
• Acciones de diferentes sectores y países.
• Bonos y otros instrumentos de renta fija.
• Fondos indexados que replican el mercado en su conjunto.
Diversificar no garantiza ganancias rápidas, pero protege contra caídas importantes y estabiliza resultados a largo plazo.
________________________________________
5. Fondos indexados y costos bajos
El autor populariza la idea de que los fondos indexados son la mejor herramienta para la mayoría de los inversores:
• Replican el desempeño del mercado general.
• Minimiza costos de gestión y comisiones.
• Evita la necesidad de elegir acciones ganadoras individualmente.
Ellis demuestra que la consistencia y la eficiencia de costos superan la búsqueda de “gangas” o estrategias activas sofisticadas.
________________________________________
6. Psicología del inversor
El libro enfatiza que las emociones son el mayor enemigo del inversor:
• El miedo provoca ventas apresuradas.
• La codicia induce a tomar riesgos excesivos.
• La paciencia y la disciplina son más valiosas que el conocimiento técnico avanzado.
________________________________________
7. Estrategia de éxito
Para “ganar el juego del perdedor”, Ellis propone cinco principios clave:
1. Adoptar un enfoque pasivo y a largo plazo.
2. Diversificar inteligentemente para reducir riesgos.
3. Minimizar costos de transacción y comisiones.
4. Evitar errores emocionales, manteniendo disciplina y paciencia.
5. Invertir en lo que conoces y entiendes, priorizando simplicidad sobre complejidad.
________________________________________
Lecciones principales
1. La mayoría de los intentos de superar al mercado terminan en fracaso.
2. La efectividad radica en no perder dinero y seguir el crecimiento del mercado.
3. La diversificación y los fondos indexados son herramientas esenciales.
4. La disciplina emocional es más importante que la inteligencia financiera.
5. Mantener estrategias simples y consistentes produce mejores resultados a largo plazo.
________________________________________
Mensaje final
“Invertir exitosamente no consiste en ganar cada año, sino en perder menos que el mercado y aprovechar su crecimiento a largo plazo.”
Charles D. Ellis enseña que la clave del éxito financiero está en la disciplina, la paciencia y la simplicidad, no en perseguir ganancias rápidas o intentar superar constantemente a otros inversores.
El verdadero inversor ganador aprende a jugar estratégicamente el “juego del perdedor” para lograr resultados consistentes y sostenibles.

[Matias · Rating 4 out of 5]

Un buen libro de inversión que te viene a decir que no te pases de listo y quieras ganar más que el mercado, sino que te conformes con los fondos indexados. En mi experiencia como inversor tengo que decir que es un buen consejo que seguí durante varios años que resultaron ser muy buenos.
Otro de los conceptos que explica es el de asignación de activos. Viene a ser que no te tienes que romper la cabeza en cuándo entrar o salir del mercado o en elegir tal o cual fondo, sino que te tienes que romper la cabeza en decidir en qué vas a invertir tus ahorros en función de los riesgos que conllevan, por ejemplo acciones, bonos, deuda pública etc... Y dependiendo de tu horizonte temporal puedes ponderar más o menos los diferentes productos.
Otro detalle que me gustó del libro es el paralelismo que hace con los deportes, cita el golf y el tenis, en el sentido que el jugador profesional juega 'a ganar' y el que mejor juega 'a ganar' es el que gana, mientras que en el deporte aficionado se juega a 'no perder' y el que mejor juega 'a no perder' es el que gana.
Tengo que decir que esto es totalmente cierto en el campo del ajedrez y ojalá que lo hubiera entendido así hace 20 o 30 años.

En resumen un buen libro que da buenos consejos más fáciles de decir que de seguir, como siempre pasa en la vida.

[Kes · Rating 4 out of 5]

Full of brief chapters that clearly set out principles for investing. Briefly:

- focus on index funds
- switching your financial manager incurs transactional costs (but if you're using active management, look for the hidden costs)
- at the end of the day, time in market is more important.

There's a lot of stress on market efficiency:

The problem is not that investment research is not done well. The problem is that research is done so very well by so many. Research analysts at major brokerage firms share their information and evaluations almost instantly through global networks with thousands of professional investors who strive to act quickly in anticipation of how others will soon act. As a result, it is very hard to gain and sustain a repetitive useful advantage over all the other investors on stock selection or price discovery.

It's a good introduction for someone who wants to start investing.

[Gary]

The 'Winner's Game' seems to be that of selling 300-page books extolling the virtues of passive investing in index funds - something that could be much more simply (but less profitably) explained in a short article.
For over 30 years now, I have found an extremely reliable heuristic to gauge the quality of others' thinking: it correlates highly with their skepticism about the theory of man-made global warming. This guy unfortunately fails that test.
On this theme, I'd also be interested in his views on pandemics, lockdowns and hastily developed coronavirus vaccines - another very reliable rule-of-thumb.
He also makes that classic mistake - much loved by amateur social historians - of comparing life expectancy today with that of a century prior, without factoring in the substantial increase due to the massive decline in child mortality over the period.
Would you trust someone like this with investment advice?

[Nikos Korexenidis · Rating 4 out of 5]

The original idea was very interesting about seeing the investing as a loser's game when the best thing that you can do is to not lose money! This also applies to other areas (social, health etc). Similar idea has Taleb with "Via negativa" : if you want something avoid the opposite .

The book also has lot of interesting stuff to apply in your investing and i totally recommend it .

My only objection about this book is the author's obsession about index funds which according to this book is the only way. After ten years in investing i stronly believe for the small investor, who knows what he is doing , stock picking is a very viable and profitable option if he aims at long term and value investing.

[Yk Chia · Rating 3 out of 5]

It was a straightforward book promoting index investing. The author is a clear supporter of the efficent market theory and he argues the best way is for individuals to put their money in index fund and let the market allocate their money.

"As an investor, it is more rewarding to study investment history than to study the present market activity"—

two big factors dominate reality for investors: corporate profits (and the dividends they provide) and the price/earnings (P/E) ratio at which these earnings are capitalized"

"So we should keep reminding ourselves that a falling stock market is the necessary first step to our buying low"

[Peter Livingstone · Rating 5 out of 5]

One of the best, most succinct books for the individual investor I've read.

Short and to the point, this is one of the best books I've read for the individual investor. It doesn't go into much detail of specific asset classes, but has a great, high level, evidence based approach to one's overall investment approach. It's probably good to revisit once every few years as one's situation evolves. It may also be good for financial advisers to bridge the gap with clients. Additionally, the high level theme can apply to many of life's endeavors.

[Abdullah Cemil Akcam · Rating 5 out of 5]

A must-read short book by an insightful and experienced professional. The iterating idea throughout the book is that investors, particularly individual investors, should and must invest in index funds which makes it a balanced portfolio in terms of risk and expected returns in the long run. Central theme: Don't play the losers game of active investing, don't try to outsmart/beat the market and go with indexing. Not an exciting book for those who want to get rich quickly but a wise guide for those seeking a comfortable retirement .

[E · Rating 4 out of 5]

Don't try to beat the market. Stick to indexing.

Bam--that's it. The whole book, more or less. Of course, I already invested this way before reading the book, so I'm not sure what I learned. Perhaps that people my age don't really need to own any bonds. In any case, invest for the long term, even beyond your death (if you want something for your children). And long-term investing means not getting caught up in the ups and downs of the hours or the days or even the months or years. And that means indexing.