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The Ulysses Contract: How to never worry about the share market again
Avoid share market traps and create a watertight plan for long-term investment success. Most of us know the Greek myth of Ulysses. He made a pact with his ship's crew ordering them to block their ears with wax and tie him to the mast of the ship while they steered past an island inhabited by mythological creatures called Sirens. This story inspired the term ‘ Ulysses Contract’ , which is a commitment device that helps us to build and maintain good habits and decisions despite future temptations. In The Ulysses Contract, Michael Kemp uses the Ulysses analogy to warn of the 'sirens' that tempt investors to part with their money and demonstrates how to put in place a successful investment plan that embodies discipline, consistency and patience. Written with masterful storytelling that expertly explains complex investment concepts, you will learn how to: • avoid get-rich-quick temptations – think cryptocurrency and day trading • learn from the lessons of history – it’ s NOT different this time • develop a long term, low-risk investing strategy. Armed with this knowledge you will become empowered to make sound investment decisions and obtain your own slice of financial freedom.
334 pages, Paperback
Published January 24, 2023
48 people are currently reading
335 people want to read
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Displaying 1 - 30 of 42 reviews
August 3, 2024
Good book, but nothing new that I haven't read in other books such as psychology of money. If you are new to this topic, then give it a try.
Avoid certainty..
Seek opposing views..
Don't listen to crowd, stay tight..
No one can predict the future (economy, tech, stock market), not even the experts..
You can never time the market..
Don't look for patterns in price or volume charts..
Fundamental analysis is not easy, requires deep expertise..
Passive Funds over active funds..
Few investors are capable of determining the true economic merit of new technology..
Resist the urge to day trade..
Don't confuse success in a bull market for skill..
Being average for above average time..strategic mediocrity..
Being a bit above average (skill) can give you a big advantage to win at investing (Tennis analogy)..
Patience, discipline, rationality, focus, delayed gratification..
Avoid certainty..
Seek opposing views..
Don't listen to crowd, stay tight..
No one can predict the future (economy, tech, stock market), not even the experts..
You can never time the market..
Don't look for patterns in price or volume charts..
Fundamental analysis is not easy, requires deep expertise..
Passive Funds over active funds..
Few investors are capable of determining the true economic merit of new technology..
Resist the urge to day trade..
Don't confuse success in a bull market for skill..
Being average for above average time..strategic mediocrity..
Being a bit above average (skill) can give you a big advantage to win at investing (Tennis analogy)..
Patience, discipline, rationality, focus, delayed gratification..
April 15, 2024
The Barefoot Investor book… of investing. I like the personality in the book. Good practical tips
March 30, 2023
He convinced me
I wish I had read this 30 years ago. Hopefully it's not too late to build a decent sized farm.
I wish I had read this 30 years ago. Hopefully it's not too late to build a decent sized farm.
November 9, 2023
4.5*. Great writing style, a mix of finance and personal philosophy
March 5, 2025
Buy shares, and when the market goes down, buy more shares
This entire review has been hidden because of spoilers.
January 30, 2026
Focus on discipline, patience and consistency. Spend less than you make, invest in low cost options and put it into a low tax environment. Enjoyed parts 2-5.
Successful investing is more reliant on personal qualities than it is on intellectual ones, and at the top of the list are discipline, consistency and patience. I will show you how to put in place an investment plan that embodies these personal qualities, even if you don’t feel that you currently possess them.
You need to understand where your investment limitations lie and then how to work within them.
A Ulysses Contract is a freely made decision that is designed and intended to bind oneself to a specific action in the future. Put another way, it’s basically a promise you make now that will stop you doing something stupid later on.
Hedonic treadmill - we think we will be happier when we get X. But we get X, then we want something else. Henry David Thoreau: ‘That man is richest whose pleasures are the cheapest’. John Stuart Mill: ‘Men do not desire to be rich, but to be richer than other men.’
Captain Cook found that the Indigenous Australians weren’t dissatisfied (like the Europeans were) because material inequality simply didn’t exist.
Humans evolved this way, because scarcity was the norm. People died if they didn’t sense the constant need for more. In today’s modern societies, this desire is directed towards materialism.
We also have a desire for acceptance. We chase others expressions of admiration, regardless of how brief.
Outlines a list of siren songs that we are exposed to as investors: when it comes to recognising our deficiencies we are deficient, cognitive biases like confirmation bias, availability bias, fear of loss causing you to sell in bad times (or in preparation for them - people want to have no market exposure when the next crash hits), relying on ‘experts’ market forecasts.
What drives share market prices? An obvious long-term driver is earnings growth, which will be erratic over time, but it will also be relentless. To harvest its riches, you simply need to get on board, and stay on board.
Volatility is unavoidable in the Stockmarket. There will be times when it plummets by 20, 30, 40 or even 50%. But as a long term wealth compounding machine, it has no peer. When you get nervous you need to sit on your hands.
We dont know what controls share prices in the short term: George Charles Sheldon in ‘Psychology of the Stock Market’ (1912): ‘however important some single factor in the situation may appear to you, it is not going to control the movement of price regardless of everything else’. The forces that move the stock market are in comprehensibly numerous and complex. They can’t be distilled to one simple causal relationship.
Investing is the art of making definitive calls in an uncertain world.
Keynes: ‘felt no shame at being found still owning a share when the bottom of the market comes.’
For me this is the essence of market timing: I can’t pick tops, but it is easy to identify when investors are in a state of panic in the wake of a crash. The best time to invest is beyond that, when a sense of total despondence is reached.
Rather than seek out buying opportunities at lower prices, people choose to avoid the stock market altogether. In the wake of a crash they are experiencing anxiety, despair and financial pain. They believe that, by getting out of the market and staying out, their pain will go away.
Buffett said: I have never met a man who could forecast the market. I am not in the business of predicting general stock market or business fluctuations. If you think I can do this, or think it’s essential to an investment program, you should not be in the partnership.’
Buffett: ‘I’ve beer been a good judge of the markets. I try to evaluate specific businesses. If I could evaluate a few specific businesses every year halfway correctly, I’d look at it as a successful year. I’ve never made any money heading which way the market’s going.’
There’s a natural force in investing in stocks, well documented by Edgar Lawrence Smith. Because most companies retain a proportion of their profits and reinvest these profits back into their businesses, then there is a tendency for company share prices to rise over time.
Apophenia is a desire to seek patterns in random information.
It is difficult for fund managers to develop skill because the environment is not sufficiently consistent. It is an environment characterised by chaos.
To outperform you need an edge. For investors to gain an edge, through information. Two broad ways: speed or process.
In order to play your best game of poker you need to strip away the emotion and focus on the facts you have, and work with those. You cannot think critically if your emotions are clouding your thinking, because then you’re not led by logic - Alex O’Brien.
Buffett’s developed a method of investing that provides him with a slight but measurable edge over all the average punters. His method delivers him a modicum of consistency among all that randomness. He has moved himself away from the pure chance end of the spectrum. He doesn’t always get it right, but he’s been playing for a long time now, and over that time his edge has delivered him a meaningful reward.
Djokovic went from winning 49% of points and being ranked 100+ to winning 55% of points and being ranked #1. Over a game with a lot of points, the outcome tend to favour the odds.
You have to have an edge, behave consistently and be patient.
Process:
Buffett thinks of himself as owning a piece of a business, not trying to determine what the stock will do over the next year or two. Graham: ‘investment is most intelligent when it is most business-like’.
Buffett knew the businesses, their markets and their competitors intimately. Many of the Berkshire CEOs believed Buffett could step in as CEO at short notice. Do you understand the businesses that well? Read the ‘the Security I Like Best’ article written by Buffett at 21. He was ready to act when the opportunity arose.
Buffett believes it is more important for an investor to possess the correct temperament than superior intelligence. Buffett has five distinct personality traits: patience, rationality, discipline, focus and ability to delay gratification.
Buffett’s technique is opportunistic. Relies on being supremely patient and waiting for the right opportunity. [Patience to wait for the right opportunity/to buy well, and patience to wait and let time arbitrage work]
Buffett was a genius. He said at his peak he could read five books per day. He was given the 400-page manuscript by Robert Miles at lunch, and called with detailed changes the next morning. He could focus, uninterrupted for hours.
A student asked Buffett when he was taking a class at Columbia how one could best prepare for a career in investing: Buffett told
the class to read 500 pages a day because knowledge builds over time - it was like compound interest. He added that few people could do it.
Most people don’t prefer to read dry annual reports and trade journals after dinner. Most people prefer things that are easy. It’s why charting, technical analysis, investing chat sites, hot tips and gut feel are the way that most people invest. These techniques appeal to the more typical human traits of pattern-seeking, ease and social confirmation.
Valuation is not as important to Buffett: the valuation only makes sense when it is obvious. So obvious you do not need two decimal places. Value investing is not the appropriate and detail application of a valuation formula.
Conclusion on Buffett: ‘if you think you can make a study of Buffett and emulate his success, then you are on a fool’s errand. Not only is it unlikely that you possess his innate skills, but I also question whether his skills are as relevant as they once were. That’s not to say exploring his methodology is a waste of time. His personal traits of patience, rationality, discipline, focus and ability to delay gratification are still relevant to investing. When they will deliver the outsized returns that
They once did is an entirely different matter. However, what the adoption of these principles will do, is enhance the chance of you becoming a safe, rational and capable investor.
Simons:
Also looks at famed mathematician and successful trader, Jim Simons. Buffett makes a couple of trades a year. Simon’s’ fund can make hundreds of thousands of trades per day. Quants leverage computers because algorithms are unemotional and can consume huge amounts of data. All manner of information is explored. Only when tradable correlations are demonstrated is the information used. Often the relevance isn’t clear, but that isn’t an issue for a quant. They seek profitable trades, not to explore cause and effect. Quants are indifferent to the markets they trade.
‘Losing an illusion makes you wiser than finding a truth.’ - Karl Ludwig Borne.
This book has warned you of the siren songs that will seduce you away from sound investment principles and behaviour, and that might even lure you onto the rocks of financial destruction.
The Stockmarket has recovered strongly from every crisis that’s ever been thrown at it. And that list includes recessions, fuel crises, two world wars and two pandemics.
You need to accept the unavoidable reality that there will be years when your portfolio drops significantly in value.
But the good news is, the Stockmarket has a disproportionately high number of up years. Despite the falls, the prevailing direction will be up. Since 1900 the Stockmarket has had 97 years when it has risen (81%) but has only had 23 down years. Not even world class poker players enjoy such attractive odds! It means that the longer you play, the more likely you are to succeed.
The All Ords has returned 21 fold return since 1987. Despite the market experience its biggest one day collapse in history, the world’s worst financial crisis for 80 years, the most profound pandemic in a century from which no part of the globe was spared.
If you ever suffer from a dose of the stock market wobbles then take a big step back, a big deep breath and get some perspective. This is the reality of investing in the Stockmarket. There will be ups. There will be downs. Keep the faith. Over time the rewards will be profound.
It’s common for people to extrapolate the current experience. Alway consider mean reversion. Peoples’ future view is often overly influenced by what is happening right now.
How can you identify when the most extreme level has been reached and that things are about to turn? You don’t know. But you can identify when things are way, way out of whack with historical norms. Timing is never going to be so precise that you can pick the turn. Only plain dumb luck will deliver that sort of precision.
Most of the time, assets aren’t at extreme levels. Things are difficult to call then. They could go either way. It means that, most of the time, the concept of mean reversion can’t be applied. The problem with extremes is that, while they present opportunity, few people have the patience to wait for them to come along. Even fewer people have the confidence to act on them when they do.
History is a grounder. It’s an anchor. It’s a last to tie yourself to.
Patience in investing is essential “since the values [of shares] are so little constant and the rumours so little founded on truth. He who knows how to endure blows without being terrified by the misfortune resembles the lion who answers the thunder with a roar, and is unlike the hind who, stunned by the thunder, tries to flee. It is certain that he who does not give up hope will win, and will secure money adequate for the operations that he envisaged at the start. Owing to the vicissitudes, many people make themselves ridiculous because some speculators are guided by dreams, other by prophecies, these by delusions, those by moods and innumerable men by chimeras.” - Joseph de la Vega.
These words written in 1688 are still applicable today because they describe human behaviour.
It’s possible to outperform most professional fund managers simply by investing in broad-based index funds that charge ultra-low fees.
Thinking like an owner, that the staff work for me helped me care more about the long-term productive performance of my companies and less about their fluctuating share prices.
A few basic principles for successful investing. The first thing to understand is that the most important inputs to becoming a successful investor aren’t intellectual ones. They are ones of personal character: discipline, consistency, patience. These are difficult to action. With the right plan you can overcome each of these human frailties. That plan is one built on an unrelenting commitment to a soundly executed financial Ulysses contract. As outlined by Munger: 1) spend less than you make, 2) always be saving something, 3) put it into a tax-deferred account (lowest tax environment possible). For you, and nearly everyone else, this plan is as good as it gets. I know it isn’t sexy, but investing was never mean to be sexy. You just need to commit and then stay the course.
It is discipline more so than Buffett-style investing acumen that allowed me to reach my destination.
Every month I saved a set amount. Every month I invested it in stocks. I ignored all the ups and downs of the stock market over that 30-year plan. I didn’t waver from my plan.
Successful investing is more reliant on personal qualities than it is on intellectual ones, and at the top of the list are discipline, consistency and patience. I will show you how to put in place an investment plan that embodies these personal qualities, even if you don’t feel that you currently possess them.
You need to understand where your investment limitations lie and then how to work within them.
A Ulysses Contract is a freely made decision that is designed and intended to bind oneself to a specific action in the future. Put another way, it’s basically a promise you make now that will stop you doing something stupid later on.
Hedonic treadmill - we think we will be happier when we get X. But we get X, then we want something else. Henry David Thoreau: ‘That man is richest whose pleasures are the cheapest’. John Stuart Mill: ‘Men do not desire to be rich, but to be richer than other men.’
Captain Cook found that the Indigenous Australians weren’t dissatisfied (like the Europeans were) because material inequality simply didn’t exist.
Humans evolved this way, because scarcity was the norm. People died if they didn’t sense the constant need for more. In today’s modern societies, this desire is directed towards materialism.
We also have a desire for acceptance. We chase others expressions of admiration, regardless of how brief.
Outlines a list of siren songs that we are exposed to as investors: when it comes to recognising our deficiencies we are deficient, cognitive biases like confirmation bias, availability bias, fear of loss causing you to sell in bad times (or in preparation for them - people want to have no market exposure when the next crash hits), relying on ‘experts’ market forecasts.
What drives share market prices? An obvious long-term driver is earnings growth, which will be erratic over time, but it will also be relentless. To harvest its riches, you simply need to get on board, and stay on board.
Volatility is unavoidable in the Stockmarket. There will be times when it plummets by 20, 30, 40 or even 50%. But as a long term wealth compounding machine, it has no peer. When you get nervous you need to sit on your hands.
We dont know what controls share prices in the short term: George Charles Sheldon in ‘Psychology of the Stock Market’ (1912): ‘however important some single factor in the situation may appear to you, it is not going to control the movement of price regardless of everything else’. The forces that move the stock market are in comprehensibly numerous and complex. They can’t be distilled to one simple causal relationship.
Investing is the art of making definitive calls in an uncertain world.
Keynes: ‘felt no shame at being found still owning a share when the bottom of the market comes.’
For me this is the essence of market timing: I can’t pick tops, but it is easy to identify when investors are in a state of panic in the wake of a crash. The best time to invest is beyond that, when a sense of total despondence is reached.
Rather than seek out buying opportunities at lower prices, people choose to avoid the stock market altogether. In the wake of a crash they are experiencing anxiety, despair and financial pain. They believe that, by getting out of the market and staying out, their pain will go away.
Buffett said: I have never met a man who could forecast the market. I am not in the business of predicting general stock market or business fluctuations. If you think I can do this, or think it’s essential to an investment program, you should not be in the partnership.’
Buffett: ‘I’ve beer been a good judge of the markets. I try to evaluate specific businesses. If I could evaluate a few specific businesses every year halfway correctly, I’d look at it as a successful year. I’ve never made any money heading which way the market’s going.’
There’s a natural force in investing in stocks, well documented by Edgar Lawrence Smith. Because most companies retain a proportion of their profits and reinvest these profits back into their businesses, then there is a tendency for company share prices to rise over time.
Apophenia is a desire to seek patterns in random information.
It is difficult for fund managers to develop skill because the environment is not sufficiently consistent. It is an environment characterised by chaos.
To outperform you need an edge. For investors to gain an edge, through information. Two broad ways: speed or process.
In order to play your best game of poker you need to strip away the emotion and focus on the facts you have, and work with those. You cannot think critically if your emotions are clouding your thinking, because then you’re not led by logic - Alex O’Brien.
Buffett’s developed a method of investing that provides him with a slight but measurable edge over all the average punters. His method delivers him a modicum of consistency among all that randomness. He has moved himself away from the pure chance end of the spectrum. He doesn’t always get it right, but he’s been playing for a long time now, and over that time his edge has delivered him a meaningful reward.
Djokovic went from winning 49% of points and being ranked 100+ to winning 55% of points and being ranked #1. Over a game with a lot of points, the outcome tend to favour the odds.
You have to have an edge, behave consistently and be patient.
Process:
Buffett thinks of himself as owning a piece of a business, not trying to determine what the stock will do over the next year or two. Graham: ‘investment is most intelligent when it is most business-like’.
Buffett knew the businesses, their markets and their competitors intimately. Many of the Berkshire CEOs believed Buffett could step in as CEO at short notice. Do you understand the businesses that well? Read the ‘the Security I Like Best’ article written by Buffett at 21. He was ready to act when the opportunity arose.
Buffett believes it is more important for an investor to possess the correct temperament than superior intelligence. Buffett has five distinct personality traits: patience, rationality, discipline, focus and ability to delay gratification.
Buffett’s technique is opportunistic. Relies on being supremely patient and waiting for the right opportunity. [Patience to wait for the right opportunity/to buy well, and patience to wait and let time arbitrage work]
Buffett was a genius. He said at his peak he could read five books per day. He was given the 400-page manuscript by Robert Miles at lunch, and called with detailed changes the next morning. He could focus, uninterrupted for hours.
A student asked Buffett when he was taking a class at Columbia how one could best prepare for a career in investing: Buffett told
the class to read 500 pages a day because knowledge builds over time - it was like compound interest. He added that few people could do it.
Most people don’t prefer to read dry annual reports and trade journals after dinner. Most people prefer things that are easy. It’s why charting, technical analysis, investing chat sites, hot tips and gut feel are the way that most people invest. These techniques appeal to the more typical human traits of pattern-seeking, ease and social confirmation.
Valuation is not as important to Buffett: the valuation only makes sense when it is obvious. So obvious you do not need two decimal places. Value investing is not the appropriate and detail application of a valuation formula.
Conclusion on Buffett: ‘if you think you can make a study of Buffett and emulate his success, then you are on a fool’s errand. Not only is it unlikely that you possess his innate skills, but I also question whether his skills are as relevant as they once were. That’s not to say exploring his methodology is a waste of time. His personal traits of patience, rationality, discipline, focus and ability to delay gratification are still relevant to investing. When they will deliver the outsized returns that
They once did is an entirely different matter. However, what the adoption of these principles will do, is enhance the chance of you becoming a safe, rational and capable investor.
Simons:
Also looks at famed mathematician and successful trader, Jim Simons. Buffett makes a couple of trades a year. Simon’s’ fund can make hundreds of thousands of trades per day. Quants leverage computers because algorithms are unemotional and can consume huge amounts of data. All manner of information is explored. Only when tradable correlations are demonstrated is the information used. Often the relevance isn’t clear, but that isn’t an issue for a quant. They seek profitable trades, not to explore cause and effect. Quants are indifferent to the markets they trade.
‘Losing an illusion makes you wiser than finding a truth.’ - Karl Ludwig Borne.
This book has warned you of the siren songs that will seduce you away from sound investment principles and behaviour, and that might even lure you onto the rocks of financial destruction.
The Stockmarket has recovered strongly from every crisis that’s ever been thrown at it. And that list includes recessions, fuel crises, two world wars and two pandemics.
You need to accept the unavoidable reality that there will be years when your portfolio drops significantly in value.
But the good news is, the Stockmarket has a disproportionately high number of up years. Despite the falls, the prevailing direction will be up. Since 1900 the Stockmarket has had 97 years when it has risen (81%) but has only had 23 down years. Not even world class poker players enjoy such attractive odds! It means that the longer you play, the more likely you are to succeed.
The All Ords has returned 21 fold return since 1987. Despite the market experience its biggest one day collapse in history, the world’s worst financial crisis for 80 years, the most profound pandemic in a century from which no part of the globe was spared.
If you ever suffer from a dose of the stock market wobbles then take a big step back, a big deep breath and get some perspective. This is the reality of investing in the Stockmarket. There will be ups. There will be downs. Keep the faith. Over time the rewards will be profound.
It’s common for people to extrapolate the current experience. Alway consider mean reversion. Peoples’ future view is often overly influenced by what is happening right now.
How can you identify when the most extreme level has been reached and that things are about to turn? You don’t know. But you can identify when things are way, way out of whack with historical norms. Timing is never going to be so precise that you can pick the turn. Only plain dumb luck will deliver that sort of precision.
Most of the time, assets aren’t at extreme levels. Things are difficult to call then. They could go either way. It means that, most of the time, the concept of mean reversion can’t be applied. The problem with extremes is that, while they present opportunity, few people have the patience to wait for them to come along. Even fewer people have the confidence to act on them when they do.
History is a grounder. It’s an anchor. It’s a last to tie yourself to.
Patience in investing is essential “since the values [of shares] are so little constant and the rumours so little founded on truth. He who knows how to endure blows without being terrified by the misfortune resembles the lion who answers the thunder with a roar, and is unlike the hind who, stunned by the thunder, tries to flee. It is certain that he who does not give up hope will win, and will secure money adequate for the operations that he envisaged at the start. Owing to the vicissitudes, many people make themselves ridiculous because some speculators are guided by dreams, other by prophecies, these by delusions, those by moods and innumerable men by chimeras.” - Joseph de la Vega.
These words written in 1688 are still applicable today because they describe human behaviour.
It’s possible to outperform most professional fund managers simply by investing in broad-based index funds that charge ultra-low fees.
Thinking like an owner, that the staff work for me helped me care more about the long-term productive performance of my companies and less about their fluctuating share prices.
A few basic principles for successful investing. The first thing to understand is that the most important inputs to becoming a successful investor aren’t intellectual ones. They are ones of personal character: discipline, consistency, patience. These are difficult to action. With the right plan you can overcome each of these human frailties. That plan is one built on an unrelenting commitment to a soundly executed financial Ulysses contract. As outlined by Munger: 1) spend less than you make, 2) always be saving something, 3) put it into a tax-deferred account (lowest tax environment possible). For you, and nearly everyone else, this plan is as good as it gets. I know it isn’t sexy, but investing was never mean to be sexy. You just need to commit and then stay the course.
It is discipline more so than Buffett-style investing acumen that allowed me to reach my destination.
Every month I saved a set amount. Every month I invested it in stocks. I ignored all the ups and downs of the stock market over that 30-year plan. I didn’t waver from my plan.
March 31, 2023
Great read, easy to understand for a non-finance person, but factual enough for experts. Proves that simplicity is always the best option. A really enjoyable book
March 7, 2024
Reading this as a 21 year old me made me take a deep breath and stop overthinking. It makes the share market much easier to understand.
April 24, 2023
I read this on the recommendation of Scott Pape the Barefoot Investor. It reasons out why passive investing in low cost index funds will out perform active management by yourself or a fund manager. The prior sentence sums up the book, if you can accept that and follow that, no need to read any further.
Kemp draws on a lot of the thinkers and investors I am familiar with (Warren Buffet, Charlie Munger, Nassim Taleb, JK Galbraith, Daniel Kahnaman etc) and some who I am not (John Bogle, Annie Duke, Jim Simon, etc). A lot quoted I have already read and I found this book was as much about moral philosophy as it was about finance. Slow and steady with financially conservative values wins the race (or grows the farm), rather than getting rich quick with speculative investments that buy low and sell high. Kemp goes through common active management strategies and demonstrates how they are unlikely to work one by one. If it were that easy, everyone would do it.
The metaphor that underlies the book is Ulysses strapping himself to the mast so he cannot respond to the seductive songs of the Sirens. That take away message for me was do little to nothing with the money you invest. You work hard to gain knowledge of how to do nothing. The knowledge gained is to stop you acting against your own interests. I am not that smart that I can outsmart the wisdom of crowds. In saying that I use a small part to my portfolio to follow Nassim Taleb’s philosophy of barbelling, selecting stocks that have little downside and potentially big up sides. It is fun to watch them go up and (mainly) down and if they fail they will not take the farm with them. Those are our entertainment stocks (Lithium, Marijuana, and Medical Technology).
Kemp draws on a lot of the thinkers and investors I am familiar with (Warren Buffet, Charlie Munger, Nassim Taleb, JK Galbraith, Daniel Kahnaman etc) and some who I am not (John Bogle, Annie Duke, Jim Simon, etc). A lot quoted I have already read and I found this book was as much about moral philosophy as it was about finance. Slow and steady with financially conservative values wins the race (or grows the farm), rather than getting rich quick with speculative investments that buy low and sell high. Kemp goes through common active management strategies and demonstrates how they are unlikely to work one by one. If it were that easy, everyone would do it.
The metaphor that underlies the book is Ulysses strapping himself to the mast so he cannot respond to the seductive songs of the Sirens. That take away message for me was do little to nothing with the money you invest. You work hard to gain knowledge of how to do nothing. The knowledge gained is to stop you acting against your own interests. I am not that smart that I can outsmart the wisdom of crowds. In saying that I use a small part to my portfolio to follow Nassim Taleb’s philosophy of barbelling, selecting stocks that have little downside and potentially big up sides. It is fun to watch them go up and (mainly) down and if they fail they will not take the farm with them. Those are our entertainment stocks (Lithium, Marijuana, and Medical Technology).
August 13, 2023
I hold this title as the best investing book based on long-term evidence.
As a reader and listener strongly practiced in the scientific method, by dent of education and profession, this writing cuts to the bone of what works in investing.
The author is a reader of history and convincingly uses examples from the earliest times of public share markets (1600s), as well as more modern cases, to draw conclusions on the use of primarily long-term index equity investing as the essential, and rational, choice of investing for the 99.99% of us, and more importantly, elucidates the various folies that are attempted by the young and inexperienced under the almost inevitable false belief that they can achieve alpha (reproducibly).
He separates all the noisy irrelevant chaff in the finance world from the little truly important wheat. It's a book to keep your feet on the ground and your head focused on the few things that matter as a personal investor - and the great things that can be achieved over a life-time of investing, if only just with beta and the wonder of compounding.
Michael Kemp (along with Vince Scully) are the mature, wise heads of finance in Australia. They are the voices that speak the closest to truth that you might hear in an unnecessarily busy and turbulent finance media. I'd love to meet Michael; the kind of mentor you can only dream of.
Thank-you for this.
As a reader and listener strongly practiced in the scientific method, by dent of education and profession, this writing cuts to the bone of what works in investing.
The author is a reader of history and convincingly uses examples from the earliest times of public share markets (1600s), as well as more modern cases, to draw conclusions on the use of primarily long-term index equity investing as the essential, and rational, choice of investing for the 99.99% of us, and more importantly, elucidates the various folies that are attempted by the young and inexperienced under the almost inevitable false belief that they can achieve alpha (reproducibly).
He separates all the noisy irrelevant chaff in the finance world from the little truly important wheat. It's a book to keep your feet on the ground and your head focused on the few things that matter as a personal investor - and the great things that can be achieved over a life-time of investing, if only just with beta and the wonder of compounding.
Michael Kemp (along with Vince Scully) are the mature, wise heads of finance in Australia. They are the voices that speak the closest to truth that you might hear in an unnecessarily busy and turbulent finance media. I'd love to meet Michael; the kind of mentor you can only dream of.
Thank-you for this.
March 13, 2025
WEALTH ISNT AN ABSOLUTE, ITS RELATIVE TO DESIRE.
WB is an opportunistic stockpicker rather than a market timer - very similar though!
Outperformers dont necessarily operate in the FM business, preferring to harness their skills for their own benefit.
When the underlying motive of purchase is mere speculative greed, human nature desires to conceal this unlovely impulse behind a screen of apparent logic and good sense (Ben Graham).
The spirit of gaming, once it has seized a subject, is uncurable.
What ails the truth is that it is mainly uncomfortable, and often dull.
An investment edge becomes redundant over time, so requires modification.
If you are a non-materialistic person then you have a head start as an investor. Delayed gratification is easier.
From 1988-2008 Renaissance Technologies did 60% pa (39% after fees). They said they are right 50.75% of the time.
The classic recipe for beating the market requires patience to wait for opportunities which may be spaced years apart.
The ability to confidently nail an intrinsic value on a stock allows skilled investors to ignore all the market noise, price gyrations and ill-considered commentary so prevalent in the market.
WB is an opportunistic stockpicker rather than a market timer - very similar though!
Outperformers dont necessarily operate in the FM business, preferring to harness their skills for their own benefit.
When the underlying motive of purchase is mere speculative greed, human nature desires to conceal this unlovely impulse behind a screen of apparent logic and good sense (Ben Graham).
The spirit of gaming, once it has seized a subject, is uncurable.
What ails the truth is that it is mainly uncomfortable, and often dull.
An investment edge becomes redundant over time, so requires modification.
If you are a non-materialistic person then you have a head start as an investor. Delayed gratification is easier.
From 1988-2008 Renaissance Technologies did 60% pa (39% after fees). They said they are right 50.75% of the time.
The classic recipe for beating the market requires patience to wait for opportunities which may be spaced years apart.
The ability to confidently nail an intrinsic value on a stock allows skilled investors to ignore all the market noise, price gyrations and ill-considered commentary so prevalent in the market.
This entire review has been hidden because of spoilers.
April 11, 2023
I bought this book because it was recommended by Scott Pape.
Having read it, I think this is a good next book for those who have followed the Barefoot steps and want a greater understanding of investing in that same mindset.
Kemp writes well in an easy to read, conversational style. He is incredibly knowledgeable and I especially enjoyed the anecdotes from his own career and investment experience.
I have been investing and reading about investing for over 20 years, and Kemp and I probably have read all the same books and admire the same investors. So for me there was nothing truly new here. However, for those who are not economics nerds (and don’t want to delve directly into Benjamin Graham and Bogle), or are new to investing, this is a great book that aggregates all of the economic and historical information a reader might need to become a decent investor.
I also think the very Barefoot-style “check your purpose for stockpiling the money” and other practical comments in the later chapters are incredibly helpful generally.
Having read it, I think this is a good next book for those who have followed the Barefoot steps and want a greater understanding of investing in that same mindset.
Kemp writes well in an easy to read, conversational style. He is incredibly knowledgeable and I especially enjoyed the anecdotes from his own career and investment experience.
I have been investing and reading about investing for over 20 years, and Kemp and I probably have read all the same books and admire the same investors. So for me there was nothing truly new here. However, for those who are not economics nerds (and don’t want to delve directly into Benjamin Graham and Bogle), or are new to investing, this is a great book that aggregates all of the economic and historical information a reader might need to become a decent investor.
I also think the very Barefoot-style “check your purpose for stockpiling the money” and other practical comments in the later chapters are incredibly helpful generally.
This entire review has been hidden because of spoilers.
April 20, 2023
"The Ulysses Contract" by Michael Kemp is a straightforward and easy-to-read book that provides sound investment advice with a no-nonsense approach. Kemp's book dispels common myths about investing and offers practical tips on how to create a solid investment strategy for the long term. The book's title comes from the Greek myth of Ulysses, who had himself tied to his ship's mast to resist the call of the Sirens, and Kemp uses this analogy to encourage readers to stick to their investment plan despite market fluctuations. Overall, "The Ulysses Contract" is an excellent resource for novice investors who want to build a strong investment portfolio and avoid common pitfalls.
August 19, 2025
I cannot recommend The Ulysses Contract highly enough! This wasn’t the first book I’ve read on investing, but after finishing it, I truly wish it had been. Even for more knowledgeable readers, it offers immense value.
Michael presents his message in a way that is both simple and timeless, while carefully covering every relevant topic to support it. The writing is clear, engaging, and grounded in wisdom that feels as applicable today as it will for future generations.
For me personally, this book has been life-changing. It’s the kind of work that deserves to be preserved, shared, and revisited — a true investment classic worth framing for generations to come.
Michael presents his message in a way that is both simple and timeless, while carefully covering every relevant topic to support it. The writing is clear, engaging, and grounded in wisdom that feels as applicable today as it will for future generations.
For me personally, this book has been life-changing. It’s the kind of work that deserves to be preserved, shared, and revisited — a true investment classic worth framing for generations to come.
January 17, 2024
Though first few chapters were boring. Final message is fabulous on investing. Investing doesn’t need Intelligence or edge - it’s all about discipline, consistency and patience. What I like this in book is Michael has showed us that even from 17th century we have been making same mistakes we have done before. So tie yourself to mast and don’t get bothered by all the usual pitfalls. He has said the same thing which John Boggle said in his book “The little book of common sense investing”. But what I like is this book is in Australian context. Thanks Michael for such great book.
September 15, 2023
Reads like a conversation with your favourite uncle who happens to be an investment guru. Easy to understand - key thoughts are repeated throughout so the reader really gets it, but author never speaks down to you - always invites you to think through the principles with him. Rich source of fact not just opinion. Genuinely moved me from feeling too uninformed to invest in shares all the way to investing a bit every month.
April 9, 2023
A straightforward look at investing (you'd obviously want to be interested in that as core subject matter) that is thoroughly - and insightfully - researched. If like me your partner rolls her (or him/they) eyes when you suggest you've some joint homework as a result of reading I think you might be on a good path :)
August 13, 2023
This is a very succinct, on-message book. It's the type of realistic, logical and often boring advice that you know makes sense, but sometimes takes a while to sink in and accept. My only criticism would be it could have fleshed out the later sections a bit , and provided more hands on data, examples and tools to make you feel as though the book had a bit more utility for the price.
August 15, 2023
Straightforward financial wisdom. If you're already well versed in the virtues of index funds, there isn't anything really new in here in terms of principles, but the history of bubbles and crashes, and the efforts required for non-chance investing makes interesting reading. A good refresher for those already convinced, and probably pretty confronting for anyone who isn't.
February 25, 2024
A must read for new investors
The book can be best described in one word - Eye Opening!
Can go a long way in helping one discriminate between fact and fiction, in the field of investing. Michael Kemp helps you see through the noise, keep your head straight and recommends ways to financial independence that is both practical and simple.
The book can be best described in one word - Eye Opening!
Can go a long way in helping one discriminate between fact and fiction, in the field of investing. Michael Kemp helps you see through the noise, keep your head straight and recommends ways to financial independence that is both practical and simple.
April 27, 2024
I had high hopes for this book after seeing the reviews but unfortunately found it very underwhelming. It is essentially a collection of anecdotes that give examples of when active investing strategies have failed. If you know what an ETF is then you’ll likely find that this book doesn’t offer anything of value. If you’re completely new to investing then it may be a worthwhile read.
April 25, 2023
Very good, very Bogle-esque. It’s littered with interesting anecdotes and historical examples, which makes it easy to read. I thought the first part could have been shorter (the negative, siren song bits) and the second part longer (the positive, farm building bits).
June 18, 2023
Great practical advice to get out of your own way. Few people want to be immersed in managing finances and this book advocates for a simple, proven approach that requires little energy to build a platform for future success.
December 31, 2023
Well-researched and well-written summary of the author’s lifelong views on investing, with interesting historical background as to why he’s eventually landed on a much simpler approach to investing than he previously had.
January 3, 2024
A must read for everyone if you want financial freedom. An easy read, with some great scenarios that apply the concepts to real life. A real emphasis on psychology too! I read this book and I felt like it was Dan talking- it’s very much a regular topic in our household!
January 12, 2024
A great book from a veteran of finance. Even better for an aussie reader as the author uses a lot of examples from his homeland.
I wish I had read this book earlier. However it is never too late for a course correction and this book guides the reader on the right path.
I wish I had read this book earlier. However it is never too late for a course correction and this book guides the reader on the right path.
August 12, 2024
An excellent book that teaches you about investment/investing and what it is not. I wish I had read this book in my time when I had started earning. I strongly recommend all parents to get their kids to read this book to develop financial acumen
October 28, 2024
Maybe the author's writing style didn't resonate with me, or maybe it's because a lot of the content in the book has now been covered extensively elsewhere, which may not have been the case when it was written, but I really didn't enjoy reading this one and a lot of it felt unnecessary.
December 18, 2025
Fantastic book - highly recommend for anyone wanting to shut out the noise and just focussing on dollar cost averaging their way into the equities market.
Simple but effective philosophy- which is really where the beauty is.
Buffet piece will have me reading 500 pages a day in no time!!
Simple but effective philosophy- which is really where the beauty is.
Buffet piece will have me reading 500 pages a day in no time!!
April 21, 2023
Smart, realistic investment advice for everyone
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