Mr. Green doesn’t choose sides. He simply reports on the views of investors who say the secret to success is buying good companies at relatively inexpensive prices, as well as on others who say it is OK to pay a premium if a company has substantial growth prospects.
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But he does hammer home certain lessons he heard from the people he interviewed:
Don’t get in your own way. Don’t be emotional about your investments, and don’t chase fads.
If you don’t understand what a company does or don’t understand an investment opportunity you are being offered, stay away.
Keep enough cash on hand so you can weather the inevitable downturns without being forced to sell your holdings at a loss. And, he writes: “To achieve resilience, it’s imperative to reduce or eliminate debt, avoid leverage and beware of excessive expenses.”
Throughout the book he underscores the central premise that originality is overrated when it comes to investing. You don’t need to come up with your own unique approach. You can simply copy ideas that have worked for others.
“The overarching purpose of this book,” Mr. Green writes, “is to share what I would call ideas worth cloning.”
Throughout, Mr. Green points out lessons that can also be applied to your personal life.
“Both in markets and life, the goal isn’t to embrace risk or eschew it, but to bear it intelligently while never forgetting the possibility of an unpleasant outcome,” he writes. He adds later on: “Nothing is more essential than our capacity to survive the most difficult times not only financially but emotionally.”
As much as I like the book, there are a few things I wish Mr. Green had done differently.
Yes, these are successful men — and just about everyone mentioned in the book is male — but his appreciation of them can sometimes veer into fawning. Howard Marks of Oaktree Capital Management is described as a “philosopher-king of finance,” and Joel Greenblatt, “a giant among giants,” has “a beguiling manner and warm smile.”