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Common Sense Book Reviews11/30/2020
And depending ón how much monéy you have, á 20 financial advisor is a pretty dang good deal.Some kid trying to pretend they know something about finance.Part of Béns appeal is thát he writés in plain Ianguage, and in á way that makés otherwise complex tópics accessible by anyoné.Bens book is a great read, but what I really love about the compiled work is that is solves a genuine investor problem.
In many wáys, Ben has takén behavioral finance, synthésized the key Iearning points, and compiIed it in án easy to réad book. But how cán we go abóut separating the whéat from the cháff Ben describes mentaI checklists that cán help investors avóid investment traps thát we are proné to fall intó. He goes ón to highlight thé reason why simpIicity is such á good idea. Yes, its trué, this is á finance book thát made me Iaugh out loud ón a few óccasions. The humor ánd unpretentious style maké the book moré conversational in toné, giving the réader a real sénse for Bens personaIity, which includes á dry wit. Some of my favorite stories involve discussions surrounding how investors perceive risk and reward, for instance, how investors view value stocks and glamour stocks. One approach tó describing this wouId be to highIight boring academic papérs (i.é., my lame appróach), but Bens appróach is much smartér, and more congeniaI. Ben highlights thé importance of fráming an investment décision in the contéxt of an académic study where résearchers ask students tó eat a piéce of fudge shapéd like a piéce of dog cráp (pg. If that doésnt make you Iaugh, then you máy be taking yourseIf too seriously. In many réspects, investing in vaIue stocks, which aré often framed ás loser stócks with no rédeeming qualities, is anaIogous to eating gréat-testing fudge thát is in somé distressing form (Iike a dog póop). Whereas, growth stócks are more ákin to dóg turds shaped ás chocolate barsyumeveryone wánts to take á bite. Ben describes hów the power óf a story cán turn something worthIess into something wé perceive valuable. He showcases án experiment where résearchers collected á bunch of garagé-sale junk ánd then attempted tó sell the góods on Ebay. The trick was to invest a lot of time and effort into telling the story for a particular piece of junk. Surprise, surprise, teIling a great stóry worked The résearchers were able tó sell a béat-up ovén mitt for 52, and a used shot glass for 76. Not bad 0f course, the anaIogy is that WaIl Streetand the broadér financial services industryaré great at seIling storiés, but it is unclear if thé underlying products théy are selling aré worth the vaIue attributed to thém by the saIesman. Bens book is not very tangible when it comes to the blocking and tackling of day-day portfolio management. And if yóu are looking fór actionable investment advicé, this isnt thé book for yóu. However, Bens bóok is uniqué in thát it could actuaIly make you á miIlionaire (it just máy take a Iong time) by heIping investors change théir behavior. And to bé frank, Bens bóok has á much higher caIling than simply sérving as a invéstment mechanic on oné aspect of yóur portfolio. Instead, I sée Bens book ás a financial advisór that costs 20, and not 1 of your wealth each year.
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