Book: Excess Returns
Author: Frederik Vanhaverbeke
Key takeaways: I reckon that people with little investing background will appreciate this book much more than I did, as it covers an awful lot of ground (which probably took years of work), and doesn’t appear to have a singular focus or any one specific takeaway. I did find some interesting insights, esp. its aggregation of records of various market players and their comments on certain topics. All in all, read this book to know of the territory of investing, but don’t expect to come away with many incisive insights.
Efficient Market Hypothesis: This was one of the best parts of the book, and in a way, it expounds on Buffett’s ‘Graham and Doddsville’ speech, and shows that the market outperformance is clustered in certain specific areas such as Value Investors following Graham’s original approach, Value Investors following Buffett’s improvised approach, Turtle Traders, Tiger Clubs and so on. All of which goes to say that successful investing has certain tenets that can be learned, and success if not a mere case of luck, as luck will not result in these clusters, but rather in a wide variety of investors.
Why Investors Herd Together?: Investing and trading is vague and complex, and because often people have no definite guide on how to proceed in the markets, herding behavior is prevalent among participants. This is why it is very important for one to have a set investing compass (in terms of philosophy) that will lead them through the confusion.
It had some interesting comments on IPOs and Turnarounds, which I have added under this page, as I thought it’d make more sense to look it all together there.
There’s much much more in this book, but I believe I have read almost all of it someplace else and haven’t bothered to repeat it here.
Prasad Capital 