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Wealth Forever: The
Analytics of Stock Markets Chunsheng Zhou and |
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Text covers
all aspects of the stock markets, including the basic tools that will enable
the reader to understand the stock market basics, the history of the stock
market performance in the US and overseas, the various ways to value stocks
and assess their risk, and more. Softcover, hardcover listed in approval
week 2003-51.
The authors seek to answer many questions about the stock market: Why invest in stocks, how to invest in stocks, how to value stocks, how to change the risk profile of portfolios, how to analyze the results of stock investing, and how to minimize estate taxes and maximize control, even after death. All aspects of the stock market are covered, including the basic tools that will enable the reader to understand the stock market basics, the history of stock market performance in the US and overseas, the various ways to value stocks and to assess their risk, and the various methods that have been proposed to capitalize on the inefficiencies of the stock market, be they temporary or permanent. The book also deals with the derivative markets for stocks. |
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Customer Review at http://www.amazon.com
The book, Wealth Forever, is a landmark achievement that will greatly benefit all investors who read and apply its lessons. If you only read one book about stock market investing in your life, make it this one. Wealth Forever is a one volume encyclopedia of historical data, equity market theories, and common sense about investing that will teach you about any fact or idea you need to know while giving you the framework to apply the learning to your own investments. The book is rigorous while remaining accessible. If you can understand simple algebraic equations, you can comprehend everything within its pages. The book's many detailed footnotes will also lead you to other books and articles that display more on the same subject. While each subject has to be highly condensed to get the essential points across, the authors did a marvelous job of being sure that important material was included. For instance, the discussions of the Capital Asset Pricing Model are preceded by stating the assumptions behind the model. Most people simply apply the model without realizing that its assumptions differ from the real world by a large degree. In my consulting, I often work with the chief financial officers and treasurers for major companies. If you read this book, your understanding of the equity markets will exceed all but the most knowledgeable of those professionals. The reason I make that point is that there is a constant outpouring of new research testing theories about the equity markets. Most people simply apply what they learned in graduate school, and much of that information has now been disproved by more recent studies of the financial markets. Yet most people do not take the time to keep up-to-date. I hope that this book will be universally adopted by corporate executives, professional and individual investors and by corporate finance students at both the undergraduate and graduate levels. I only found two aspects of the book to be less than outstanding. First, a lot of the material in the first few chapters could probably have been better placed after chapter 10. It seems to be placing the cart before the horse to talk about opening brokerage accounts and how to read technical charts before describing the approach one should take with investing. Second, the book needed a little better proofreading. The obvious errors that remain undercut the book's credibility. Although I did not check out all of the equations in detail, those did seem correct. Some of them, however, are annoyingly chopped up in the printing. It's as though the equations were typed in one software format, and that format didn't work well for the typesetting. In the text, Peter Lynch is described as Peter Finch in one place, and Procter & Gamble is consistently spelled as "Proctor & Gamble." The time focus of the book's narrative about the markets veers back and forth between 1999 and 2003 in the text. Some of the material about 1999 is written as though the book ended there. One of my favorite aspects of the book is that one set of evidence is used to help the reader understand all of the evidence. For example, there's a lengthy section looking at the apparent undervaluation of United Technologies that shows how one can assess such a subject, as well as the limitations of various stock valuation methods. Similarly, stock-trading strategies and their results are compared to index fund results so that readers can get a sense of the cost of information and trading compared to the benefits that can be achieved. I came away, once again, confirmed in my view that index funds are a wonderful solution for almost all investors. I was also reminded that we need to remain vigilant in being sure that our knowledge of important subjects is up-to-date. I hope the authors will bring out new editions of this book every five years or so.
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Essential Reference Guide for Equity Market
Investors, December 8, 2003 