A medium-sized publisher has approached me to write a book on value investing.? I might do it, or I might not.? I also might try to do it with another publisher, or I might do it through Amazon.? I solicit advice from my readers on the prospect.
Anyway, I thought about what the book might look like, and to do so, I went through the entirety of my Value Investing category, and my page called Major Article List,? which described my best articles from my RealMoney days.
What you will see after this is less than a first draft of chapters.? I plan on categorizing it and simplifying, but here it is for now:
- Bonds
- Use of cash ? buybacks, dividends, strategic use, delay
- Valuation
- Cycles
- On being wrong ? planning for failure
- On financial companies
- Growth expectations
- Following leaders vs surfacing your own ideas; who are you playing with/against?
- Weighing vs Voting
- Use of free cash by management
- Avoid buggy whips
- Industry analysis and economic sensitivity
- Embrace trends, resist trends
- Take prudent risks
- Three year horizon
- Understand balance sheets; quality, anomalies
- Management incentives
- Discipline: tie your hands, do something, but don?t react; you are you own worst enemy
- Risks, not risk
- Markets are mostly, but not entirely efficient
- Margin of safety
- Diversify, but not too much
- Safe assets and Risk assets
- Avoid complexity; embrace complexity
- Sum of the parts
- Realistic expectations
- On shorting
- Ask the opposite question
- Rank your ideas
- No, macroeconomics *does* matter
This could be one, two or three books depending on me and the goals of the publisher.? As I read through my blog, I realized that I wrote a lot more about value investing at the beginning of this blog.? I think the crisis caused me to shift.
But as I went through what the book could look like, I got more excited about it — there is a lot of potential here to explain value investing in a comprehensive? way to readers.
PS — Any publisher contacts that you want to share are appreciated.? Thanks to those who have given me advice so far.
If you do write a book or two or three or four, please feel free to show how your world and life view affects your investment decisions. Too many times, big name professed Christians have the opportunity to show how their philosophy of life affects what they do, and they fail to do so effectively.
One reason that I am encouraging you in this way is that Christians themselves tend to look at investing the way that Christians used to look at politics. Except for the commendable ideals of being people who are honest and trustworthy, there is often a massive disconnect in the minds of Christians between the Bible and economics/investing.
The Truth affects every area of our lives. I do not expect people who are not believers to grasp that in its entirety. However, most Christians also have problems understanding that the Truth does truly affect every area of our lives.
My wife just mentioned to me today about our daughter taking a course in economics and investing. Perhaps your book will be used in the teaching of the course. If not for my child, for many others.
While most in our society do not have what it takes to buy and sell stocks, bonds, and the like, it does not have to be the case. I have learned a lot from you and appreciate your willingness to not hide from your internal belief system. Keep up that good work in your books!
I have a bookcase full of Value Investing books. I’m a sucker for them. Perhaps it’s hard to say something really new on the topic, but a few areas I feel are ripe for discussion, and which I suspect you have a lot to add:
1) Risk Management – beyond the standard “Margin of Safety”
2) When to sell. Frequently large gains happen after the stock has appreciated to the point where it is no longer attractive as a “value stock”. Nothing wrong with periodic ranking and replacing, but I would like to hear other ideas.
3) Value investing for those of us with limited time and funds. The fact that certain value metrics outperform on average is interesting, but most of us don’t have the resources to run a strategy that requires dozens of holdings.
4) Related to point two. general timing. Value investors consistently and tragically buy and sell too soon. I’d love to read a bit more about the applicability of momentum metrics to value investing.
I would love to read such a book, and would happily buy it.
I am really glad a publisher has approached you about this; however, I think that self-publishing is an idea worth exploring. You have a sizable following both on your blog and other social media outlets. This audience is, generally, a highly influential audience and a very close one to the topic being explored.
Secondly, I think that self-publishing through amazon is worth exploring because it would allow you to publish multiple books instead of one complete tome. Digital publishing is making the economics of short books work again, and being able to split a book into multiple shorter books allows readers to buy the content they need at more accessible price points. Sure, you might lose some sales from buyers who buy 1 out of 4 tomes instead of the full one, but I’d be willing to wager that lower price points increase likely hood of purchase for enough buyers at the margin to offset any cannibalization. New technology is allowing for 40-100p tomes to be distributed (both digitally and in hard-copy) at reasonable prices and margins and I think we should leverage that. There’s enough books out there that cover the basic content, focusing on your expertise and creating denser, meatier books would fill a niche that is relatively unfulfilled at the moment.
Finally, I just want to say that I’d love to see some content on value investing in multiple levels of the capital structure, a topic that doesn’t get much airtime outside of distressed debt literature. Best of luck!