New book; Investor's Manifesto" by William Bernstein

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singletond
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New book; Investor's Manifesto" by William Bernstein

Post by singletond »

I liked his book "Intelligent Asset Allocator". Anyone read his new book, and have an opinion?

dave
larryswedroe
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Investor Manifesto

Post by larryswedroe »

If Bill Bernstein writes it, its worth reading. No exception here. Even if you have read his other books.
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singletond
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bernstein book

Post by singletond »

In reply to : "If Bill Bernstein writes it, its worth reading. No exception here. Even if you have read his other books."

I wonder if he's as good as the author of that "What wall street doesn't ..." book?
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Taylor Larimore
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Investor's Manifesto" by William Bernstein--A Gem

Post by Taylor Larimore »

singletond wrote:I liked his book "Intelligent Asset Allocator". Anyone read his new book, and have an opinion?

dave
Hi Dave:

I read the Bill's book and liked it very much. I took valuable excerpts from the book for our Collection of Investment Gems. Read these excerpts and then decide if you want to buy the book.

The Investor's Manifesto--A Gem
"Simplicity is the master key to financial success." -- Jack Bogle
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grap0013
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Re: New book; Investor's Manifesto" by William Bernstei

Post by grap0013 »

singletond wrote:I liked his book "Intelligent Asset Allocator". Anyone read his new book, and have an opinion?

dave
I liked "Intelligent Asset Allocator" and I read Investor's Manifesto in a day. Great read!!
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lj3jim
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Post by lj3jim »

I have the book and thought it was great. I don't know how much would be new for you, though, given that you've already read The Intelligent Asset Allocator. I've heard that Investor's Manifesto is a more concise version of Berstein's other books. I tried reading "Four Pillars" before Investor's Manifesto was released. I didn't make it through Four Pillars. Investor's Manifesto was just right for me.

Regards, Jim
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Post by Beagler »

Like Larry's books, if he writes one, it's worth reading. I've got the complete set of both authors' books, and frequently refer back to them. Dr. Bill's writing style is very entertaining. Larry's book The Only Guide To Winning Investment Strategy You'll Ever Need: Index Funds and Beyond--The Way Smart Money Creates Wealth Today is one that I frequently re-read passages, and his bond book is the best layman's bond book I've read.
“The only place where success come before work is in the dictionary.” Abraham Lincoln. This post does not provide advice for specific individual situations and should not be construed as doing so.
Levett
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Post by Levett »

Larry's right IMHO.

The book is crisp, clear, and portable.

It would be a great gift to someone who wants to get a handle on a lot of the essentials of investing. Bob U.

P.S. I wonder if Bill had any input on the zany cover ("Armageddon" being a somewhat overused word these days :lol: )
There are some things that count that can't be counted, and some things that can be counted that don't count.
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VictoriaF
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Re: bernstein book

Post by VictoriaF »

singletond wrote:In reply to : "If Bill Bernstein writes it, its worth reading. No exception here. Even if you have read his other books."

I wonder if he's as good as the author of that "What wall street doesn't ..." book?
singletond,

larryswedroe who replied to you is the famous Larry Swedrow. You may want to check out his books too.

Victoria
Inventor of the Bogleheads Secret Handshake | Winner of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)
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wbond
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Re: bernstein book

Post by wbond »

VictoriaF wrote:
singletond wrote:In reply to : "If Bill Bernstein writes it, its worth reading. No exception here. Even if you have read his other books."

I wonder if he's as good as the author of that "What wall street doesn't ..." book?
singletond,

larryswedroe who replied to you is the famous Larry Swedrow. You may want to check out his books too.

Victoria
Victoria,

I think he might be one step ahead of you.
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bobcat2
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Post by bobcat2 »

Here is what Bill Bernstein himself had to say about these books at the Bogleheads Annual Meeting last year.
When I come to these meetings, I meet all these people who read all books written by me, Rick Ferri, and Larry Swedroe. By all means, you do not need to read us all; you can stop at one. We are all saying the same thing, and after one book the learning curve is rather shallow.
Solid advice and opinion that is straight from the horse's mouth.

BobK
In finance risk is defined as uncertainty that is consequential (nontrivial). | The two main methods of dealing with financial risk are the matching of assets to goals & diversifying.
conundrum
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Post by conundrum »

I read Dr. Bernstein's new book (as well as his other books) and felt that it was definitely a great read. I always seem to find a couple of new pearls in each of his books. I would also strongly agree with the recommendations for Larry Swedroe's books. ( In particular, am looking forward to Larry's new book coming out in May).

Good luck and happy reading

Drum :sharebeer
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DaleMaley
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Post by DaleMaley »

Here is a copy of my book review on Amazon.com:
47 of 47 people found the following review helpful:
Excellent short investment primer, November 22, 2009
By Dale C. Maley "Index Fund Investor" (Fairbury, IL United States) - See all my reviews

A little background on myself since it affects my review. I have read over 200 books on investing. My conclusion is that investing in a diversified portfolio of low cost index funds is the way to build and maintain wealth. I am a member of the Internet Forum Bogleheads dot Org, whose members are disciples of Jack Bogle's passive investing strategies. William Bernstein occasionally posts on this forum. I am also the author of the book Index Mutual Funds: How to Simplify Your Financial Life and Beat the Pros. I am also a contributing author to the Bogleheads 2nd book on investing titled The Bogleheads Guide to Retirement Planning. I recently met Bill Bernstein at the Boglehead's 8th annual convention in Fort Worth in October 2009. I heard Bernstein answer questions and give a 20 minute lecture on the four lessons he learned from the Crash of 2008.

I have enjoyed Bernstein's previous books, and I really like his Retirement Calculator from Hell story posted on his Efficient Frontier web site. I looked forward to reading the Investor's Manifesto.

Bernstein correctly points out that every few years we experience a Bear Market in stocks, but nobody knows when to predict when the next one will begin. If you examine history from WWII, you will find we have experienced about 13 Bear Markets in 65 years.....or roughly a Bear Market about every 5 years. Bernstein's solution to the dilemma of not knowing when the next Bear Market will begin is to hold a diversified portfolio of low cost index funds, including both stocks and bonds. Bernstein's recommendation is not new with regards to holding a portfolio of both stocks and bonds. Benjamin Graham back in his 1934 book Security Analysis recommended roughly a 50:50 split between stocks and bonds.

At first, I was a little surprised that Bernstein said the field of finance (and investing) is a relatively small one compared to other fields. He said the number of major ideas is small compared to medicine, engineering, or the social sciences. After I thought about it, I realized Bernstein is right. A while back I was doing research for a short story on investing. My research showed very few major ideas and most of them were just within the last 20 years or so. For example, it took until 1994 for William Bengen (engineer turned financial advisor) to study past stock market returns and conclude that retirees should not withdraw more than an inflation adjusted 4% of their initial portfolio during retirement. Up until that point, many people suggested you could withdraw 10% annually, the historic return of the stock market. In 1998, the famous Trinity Study was published with findings similar to Bengen's. Fama and French's 3-factor study identifying small value stocks as giving the highest returns was published in 1992. Monte Carlo analysis of retirement withdrawals did not start until 1997.

In recent years, the financial planning profession has started to recommend SPIA's (single premium immediate annuities) for retirement. There are pros and cons of SPIA's including giving up control of your money to an insurance company for 20 or 30 years. In most states, there is a State Insurance Guaranty Association which is a group of insurance companies which are supposed to pitch in and maintain annuity payments to policy holders if the issuing insurance company goes bankrupt. As the Sub-Prime Crash of 2008 pointed out, many insurance companies (think AIG) participated in the mortgage security shenanigans and almost went bankrupt. Because of the risk of insurance company bankruptcy, Bernstein is recommending avoiding SPIA's. He speculates that maybe the Federal Government will issue SPIA's in the future.

Bernstein correctly points out that the best annuity you can buy....is to wait until age 70 to start drawing Social Security.

Bernstein also correctly points out that very few people can be their own financial advisors. To be your own effective financial advisor, you have the following four traits: 1) interested in investing, 2) math skills, 3) knowledge of history, 4) understand and control your own behavioral finance tendencies.

Bernstein believes the Gordon equation should be used to predict the future returns of stocks. When the book was written, the Gordon equation predicted future stock market returns of 4-8% in inflation adjusted terms.

Bernstein says Markowitz's mean variance optimization is a great teaching tool, but it should never actually be used in the real world of investing.

Bernstein also recommends not investing in the countries with the fastest growing economies. Most studies have found an inverse relationship between economic growth rate and stock market returns.

In regards to asset allocation, Bernstein suggests the starting point of the Rule of 100 (100 minus your age is your suggested stock allocation). Jack Bogle calls this rule "your age in bonds".

Bernstein cites Benjamin Graham's 1934 classic The Intelligent Investor with regards to asset allocation. Graham recommended a 50:50 stock to bond allocation..."We have suggested as a fundamental guiding rule that the investor should never have less than 25% or more than 75% of his funds in common stocks, with a converse inverse range of between 75% and 25% in bonds. There is an implication here that the standard division should be an equal one, or 50-50 between the two major investment mediums."

Bernstein is ok with tilting your portfolio towards small-value per the Fama-French 3-factor study, but correctly points out it might take 20-30 years for small cap value to show its out-performance.

In this book, Bernstein recommends including your Social Security and pension as a bond in your asset allocation. When I recently heard Bernstein speak, he said it was much simpler not to include these two items in your asset allocation. In my experience, there is no harm at figuring your asset allocation both ways (with and without SS and pensions).

Bernstein also generally agrees with the current financial planning industry rule of thumb of not withdrawing more than an inflation adjusted 4% of your retirement portfolio. His modification is...2% SWR is bulletproof, 3% ok, 4% you are taking some risk, and 5% you are destined to eating Alpo.

Bernstein believes in the role of behavioral finance impacting investor's decisions. He includes some reference to behavioral finance issues in this book. Separately, I have heard him recommend reading Jason Zweig's book Your Money and Your Brain. I have read Zweig's book, but would instead recommend Pompian's book Behavioral Finance and Wealth Management.

I found Bernstein's story about Venice in the 1300-1500 period very interesting. Venice forced wealthy people to buy government bonds yielding 5%. A secondary market arose where these bonds traded anywhere from 20% to 90% of face value, depending on the condition of the country. Given the U.S. huge deficits, maybe our Federal Government will institute the same law as Venice did.

All-in-all an easy read which covers the basics of investing very well. This book is shorter than most, so hopefully more people will actually read the book. I think Bernstein accomplished his objective of making a shorter and simpler book that more people will read and understand. I'm going to buy a copy for my son to read.
Most investors, both institutional and individual, will find that the best way to own common stocks is through an index fund that charges minimal fees. – Warren Buffett
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VictoriaF
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Re: bernstein book

Post by VictoriaF »

wbond wrote:
VictoriaF wrote:
singletond wrote:In reply to : "If Bill Bernstein writes it, its worth reading. No exception here. Even if you have read his other books."

I wonder if he's as good as the author of that "What wall street doesn't ..." book?
singletond,

larryswedroe who replied to you is the famous Larry Swedrow. You may want to check out his books too.

Victoria
Victoria,

I think he might be one step ahead of you.
Oops :oops:
Victoria
Inventor of the Bogleheads Secret Handshake | Winner of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)
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dkdoy
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Post by dkdoy »

Well worth your time, also agree anything by Larry Swedroe is a great read.
conundrum
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Post by conundrum »

Dale, thanks for the great review. I have already read the book but your review made me want to read it again :wink:

Drum
Beagler
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Post by Beagler »

bobcat2 wrote:Here is what Bill Bernstein himself had to say about these books at the Bogleheads Annual Meeting last year.
When I come to these meetings, I meet all these people who read all books written by me, Rick Ferri, and Larry Swedroe. By all means, you do not need to read us all; you can stop at one. We are all saying the same thing, and after one book the learning curve is rather shallow.
Solid advice and opinion that is straight from the horse's mouth.

BobK
There are worse hobbies than reading all of Larry's and Dr. Bill's books. :)
“The only place where success come before work is in the dictionary.” Abraham Lincoln. This post does not provide advice for specific individual situations and should not be construed as doing so.
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