“Buy low, sell high. Diversify, diversify, diversify. Share buybacks are good. Use stop-losses. Re-balance your portfolio to manage risk. Backtesting is bad. This stock is low/high risk.”
Wall Street is full of financial truisms that many investors accept at face value. But is it even possible to implement some of these ideals in the real world? How big a gap is there between these ‘sensible truths’ and what actually occurs in your managed investment portfolio? How much of the ‘common sense approach’ is mere ignorance and how much is deception stemming from ulterior motives? This book takes a critical look at the most cherished beliefs on Wall Street and analyzes whether the financial advice you get is mere rhetoric and which tips are actually practical steps to protect your investment. This book does not claim to have all the answers, but what it does do is encourage readers to challenge the common sense approach and to examine the stock market from a unique perspective. While readers may not always agree with the author’s point of view, the goal is to inspire investors into thinking for themselves and not credulously assuming that Wall Street has your best interests at heart.
This book of 27,000 words is a compilation of articles and blog postings written by the author for such sites as Portfolio-Café and Seeking Alpha. The author is an equity model builder at Portfolio Café and has written for various financial websites. His next short-term goal is to create a new type of strategy fund for small retail investors that will bypass typical Wall Street channels while offering transparency, total control, no management or performance fees, and sophisticated quantitative strategies tailored to the average investor. He is curious as to Wall Street’s response.
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