This review was written by Eugene Kernes
Genre = Economics, Finance
“Investing isn’t a certainties game. Can’t be. Capital markets are far too complex. Instead, investing is a probabilities game.” – Ken Fisher, Introduction, Page xiv
“While there is no actual evidence of that, ever since, way too many investors believed beta reflects future risk, despite hearing and knowing that past performance isn’t indicative of future results.” – Ken Fisher, Bunk 19: Beta Measures Risk, Page 76
“History is one important tool for shaping forward-looking expectations. It should never be your sole guide, but history is a terrific debunkery tool helping you see the world just a bit more clearly.” – Ken Fisher, Part 5: History Lessons, Page 136
Investing is difficult, otherwise many would be investing and earning a lot. Even long time profession investors and advisors, make a lot of mistakes. Financial markets are really complicated, making investing based on probabilities rather than on certainty. Although the focus of the book debunking myths, which claim to be more certain than reality shows. The book’s lesson, is error reduction. By not following myths, the error rate can be reduced. Not completely, but less errors means a lot more successes. The way the myths are debunked is by challenging the myths, by checking the history and data of the myths. Questioning the myths, then testing and verifying claims made. For the myths presented, and the many myths not in the book, the reader and investors are asked to challenge them. To challenge not only the myths, but also the author’s own claims.
Although the arguments express complexity of the ideas, the claims from the myths are sometimes dismissed too eagerly. Dismissing potentially valuable lessons. Reducing the errors of the myths, can turn them into a better source of information.
This is not an introductory book. To get a lot of value out of reading the book, the reader needs to know a lot of the language, the jargon of finance and investing. As the book tries to be a guide on what to avoid in investing, the idea is to consider how the debunked myths influence the reader’s participation in financial markets.