It is important to keep educate yourself. Stephen Covey calls it Sharpen the saw.
To do this, I follow seminars and/or webinars, read books and blog posts from fellow DGI’s. This to gain new insights and of course learn something new. And because reading is FUN!
I read a lot of books, all kind of books. From biographies, management books to of course financial books. I really enjoy reading. This joy I hope to give to my kids! Reading books opens up a whole new life and you enrich yourself with new knowledge. What a great gift!
In my 2016 goals I wrote that I would read at least one book every quarter. And I will share my new knowledge with you, my readers. I will do this to keep the snowball of knowledge rolling.
Here is the sixth book review for Polliesdividend.
The Warren Buffetts Next Door – by Matthew Schifrin
A couple of weeks ago, I read the back of this book that got me curious about the book. It stated:
How 10 ordinary people consistently achieve extraordinary returns on their investments (and how you can, too). There are the famous investors whose names you know—Buffett, Bogle, Soros, Lynch, and Templeton. And then there are the Warren Buffetts next door, those successful investors you’ve never heard of—Rees, Krebs, Koza, Petainen, and Weyland. The Warren Buffetts Next Door describes how these “regular” people—tractor-trailer drivers, radio DJs, and college dropouts—utilize an armament of online information, tools, and resources to routinely outperform professional brokers and Wall Street’s Ivy League–educated investors.
Because it is always good to learn about the investing strategies of the great investors of our time, I picked up a copy and started reading the book: The Warren Buffetts Next Door: The World’s Greatest Investors You’ve Never Heard Of and What You Can Learn From Them.
This book provides ten – magazine style – case studies of successful investors. Schifrin details their personal stories, their trading philosophies and their investment strategies. These investors are just normal ordinary people and come from all walks of life. They could even live in your street. They have (or had) normal jobs, such a civil engineer, radio DJ and a truck driver. And that is just what is so appealing, that with some hard work and devotion, everyone can follow in the footsteps of Warren Buffett.
Schifrin found these people on the Internet, on the website of http://www.marketocracy.com. Their methods vary from technical trading and global macro-economic analysis to deep value investing. I did enjoy most of the stories and the investment strategies profiled in this book. However in most of the studies I did not read about investing with real money. The book is mostly written around the data from the website of Marketocracy. These people don’t use real money to invest, they are just paper-traders.
This book has nothing to do with Warren Buffett of his style of investing. In my opinion these people are not actual investors, their “success” is based entirely upon following imaginary portfolios. And that’s why I’m a bit disappointed about the book.
I read a great quote on the Internet that captures my disappointed in a great and funny way:
“I would not go to an air-guitarist for lessons on how to actually play the guitar. So why should I, or would I, want investment advice from one who has never actually committed a dollar of his own to the whims of the markets.”
Furthermore I read far too much links and recommendations to some investing sites. Did these companies helped to get this book printed?? It makes you wonder.
Okay, what do I take away from this book after I digested it?
- It is an easy and nice to read book. And I always love to read real life stories.
- It shows (at least on paper) that anyone can be a successful investor if they are willing to first invest time and educate themselves.
- It made me think more about adding the debt/equity ratio to my Pollie-code.
- Covered call writing can help to increase your portfolio profits.
- Technical analyses can help your decision-making (MA200-days & MA50 days).
- If you are looking for a book that teaches you how to invest, this book will not get the job done.
- When I picked up the book, based on the title, I had a different idea about what I was about to learn. I thought I was going to learn more about the strategies of the oracle of Omaha. Unfortunately there was no such thing. So if you want to invest like Buffett there are many more interesting and relevant options out there.
I found the book easy and nice to read. But it will not be high on my recommendation.
The Pollie-rating for this book is:
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Have you read this book? What do you think of the lessons from this book?