This is a wonderful book with a collection of investment advice from business superstars and investment gurus. For what they are worth, they serve as good stories and great food for thought as we are always interested in hearing what the Fortune 500 CEOs, personal finance and investment heavyweights have to say about accumulating great wealth and their individual investment strategies and experiences. Having said that, I don't think it is a useful book to pick up to learn about investment (maybe that is not the author's intentions anyways), particularly for beginners.
First of all, we are reading about personal investment strategies and experiences from different people which may not be applicable to you. I would have to say some of the people interviewed for investment advices have their own agendas. For instance, I noticed various instances where a CEO of a mutual fund company will highly recommend investing in mutual funds as the way to go, or a CEO saying investing a whole lot into his own company's shares and never sold a single share as the reason for his great wealth. Well, I am not here to judge whether their investment advices are sound or not, but just to warn readers not to simply follow their investment advices just because they are CEOs, chairman, founders of billion dollar investment companies. There is a piece of advice offered by a CEO not to invest in individual stock since you will never know enough about that particular stock to comfortably invest in it. He recommends buying baskets of stocks (mutual fund) and as you guess it, he is the founder of a big mutual fund company. So, please take every piece of advice as investment stories not investment advices that you have to follow.
However, there is a common useful theme revolving each of their individual investment strategies and experiences which I will summarized as below:
1) Invest in management. Management is the most important factor to whether you should invest in a company (or bail out). A great management can turnaround a dying company whereas a thriving promising company in the best sector could easily be killed by lousy management decisions
2) Always diversify your investments. Never put all eggs in one basket, meaning, never just put all your investment money in a single stock, single mutual fund, single ETF, single sector, single industry or single anything! Always diversify and spread the risks.
3) Think about the worse possible downside risks to your potential investment (and see if you can handle the loss) before imagining about its potential upside rewards. If you have done so, I am pretty sure you will heed the advice of #2 above. I have heard countless stories and hot stock tips of how things are different now, it is a sure thing to invest with unlimited upside potential, well, they all seem very attractive til you considered their possible downside risks.
4) Be a contrarian. Bet against mass phychology. More often than you would think, you will come out as a winner. When everyone is rushing madly into a single sector, a single industry, a single stock, flashing daily news and continuous media coverage about certain something, dash the opposite direction please! Unloved, forgotten, boring sectors are where you could find hidden gems
Dow Jones are at its all-time high, with mad money investing in U.S. equities painting a rosy image that economy is healthy and growing where dollars are in fact crumbling and losing gains against major currencies and gold prices making a very strong comeback. As a contrarian thinker, have you thought of investing in foreign currency, precious commodities like gold/silver as a hedge against U.S. economy and potential profits? With everyone rushing to buy oil/natural gas stocks, may be we could invest in alternative energy sources like uranium to build nuclear power plants that are much cleaner, cheaper and more efficient to generate electricity than coal/natural gas. Just some food for thought...
Best of luck to your investment future!