Book reviews: Five easy reads

These new books couldn’t disagree more about investing.



From the November 2007 issue of the magazine.


1. The LittLe Book of Common Sense Investing by John Bogle ($23.99, Wiley)

Fortune magazine named Bogle as one of the four investment giants of the 20th century,
which seems only fitting since Bogle practically invented the modern index fund. In this book, the father of index investing explains why he thinks his invention is still the best strategy for most investors.

Our take: Bogle’s message can be repetitive, but he presents a powerful case for indexing. If you’re tired of paying high fees for belowaverage performance, you’ll love his book.

2. The Sleuth Investor by Avner Mandelman ($29.95, McGrawHill)

That indexing stuff is for wimps, roars Mandelman, a money manager who thinks of himself as
Sam Spade with an MBA. According to Mandelman, you make money by acting like a private eye and ferreting out information no one else has.

Our take: If you don’t have a day job, Mandelman’s approach makes sense. For most investors, it doesn’t. If inside information were that easy to get, wouldn’t more mutual funds beat the market?

3. Crash Proof: How to Profit from the Coming Economic Collapse by Peter D. Schiff ($33.99, Wiley)

Now don’t go thinking any happy thoughts there. The U.S. is headed for disaster because of its freespending ways, according to this book. So build your bunker and load up on gold and nonU. S. stocks, says Schiff.

Our take: Schiff exaggerates the negatives. By all means, hold a globally diversified portfolio—but don’t ignore U.S. companies.

4. Grande Expectations: a Year in the Life of Starbucks’ Stock by Karen Blumenthal ($30, Crown Business)

If you want to understand how the market works, this book may be just your cup of halfskim frappuccino. It follows Starbucks shares over a year to illustrate the forces that cause a stock to soar or dive.

Our take: If you’re a novice investor, this book is an entertaining way to see how the market evaluates not just Starbucks, but any stock.

5. The Aleph Blog by David J. Merkel (, free)

We’ve become addicted to this blog for its intelligent takes on the stock market and corporate finance. Merkel makes his living as an investment analyst in the U.S., but he writes this blog specifically for small investors.

Our take: We like Merkel’s explanations of why he’s buying or selling specific stocks. Even more, we like his emphasis on controlling your risk, because whether you’re an indexer or an active investor, managing risk is the key to success.

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