Reading this book was so comfortable, I felt like I was sitting across my living room, chatting with its author, Charles Payne.
I love talking with Charles, because he consumes volumes of information daily, yet manages to condense it into simplified concepts that just make sense. Add in his enthusiasm for investing and you come away with a sense that you have just spoken to someone who knows what he is talking about.
His book gave me the same exact feeling. And I think that whether you are an investment pro, managing other people’s money, or an individual investor minding your own store, you will benefit from Charles’ common-sense investment advice.
In this book, he shows investors how to become ‘good’ investors. He doesn’t promise that you will be running a hedge fund on Wall Street next year, nor does he attempt to show you how ‘the rich’ invest. He’s been in this field long enough to know that the rich and you and I don’t exactly have the same goals in mind, so our investing strategies would naturally be different. The rich want to preserve what they have, and we want to get some of it!
His first concept is not new, but one that stymies many individuals, who often don’t know where to find good companies in which to invest. It’s one that former Fidelity money manager Peter Lynch, made famous. Buy what you know, or as Charles says, “be aware of the world in which you live”. Simply put, that means think about all of the firms you do business with and/or admire. Many of them will be publicly-traded companies—perhaps businesses with fabulous investment prospects. At the minimum, they may be a starting point for investigating a potential profitable investment.
Next, Charles emphasizes what most successful investors know to be true: investing is a long-term prospect. He encourages investors to ignore much of the media noise surrounding the investment world and instead, employ time-tested strategies that truly work: Setting realistic profit goals and holding periods, learning self-discipline to avoid the emotions that will surely sabotage those goals, and doing your homework.
And not to fear, he makes doing that homework a much more manageable task than I have seen in dozens of investment books.
First, he discusses the various US stock exchanges and what ‘going public’ actually means to a company. Next, Charles gives technical analysis its due as a useful tool, when combined with the long-term investor’s friend, fundamental analysis. Taken together, he suggests that investors use the fundamental indicators to determine ‘what’ to buy and the technical parameters to tell you ‘when’ to buy.
He then tackles financial statements and charting, with an often comical, but well-done explanation of these essential tools. He doesn’t just labor on monotonously about this ratio or the intricacies of that chart. Instead, he provides real-world examples—as well as worksheets—to give you a good start on your analysis.
I found his chapter on ‘Watching the Tape’ particularly interesting, as he provides substantial advice on differentiating ‘real’ versus ‘fake’ news to help you determine whether or not you should be concerned enough to sell an investment, or enticed enough to purchase one.
To wrap up, Charles offers readers a diverse selection of Web sites, newspapers and magazines that will assist you in designing your own ‘command center’ to monitor your holdings.
After reading this book, I think you’ll agree that it would be difficult to find an easier, yet more comprehensive manual outlining what it takes to be a successful investor in today’s volatile markets.
