Review: Full of Bull by Stephen McClellan (FT Press 2010)
Monday, October 5, 2009 at 5:46PM4 Stars
Full of Bull is a great read for individual investors. Stephen McClellan makes a great case about why you shouldn’t drink Wall Street’s Kool-Aid. And Kool-Aid is exactly what Wall Street sells. Learning how the Street works is a vital lesson you must understand to protect your wealth.
Although this book is not targeted to professionals, the book reinforced my long-held views that analysts’ freshly issued opinions should be taken advantage of.
On page 98, McClellan makes the following comment: “Take time off during a bear market. To preserve your capital, stand back and reduce or eliminate your exposure to stock for a while.” This tactic seems inconsistent with the following statements:
• From Shelby Davies: “It is in a bear market you make most of your money, you just don’t realize it yet.”
• From Warren Buffet: “Be greedy when others are fearful.”
I posted a comment on the author’s blog about this inconsistency. The author responded:
I appreciate your interest in my blogs and my book. Yes, my strategy to avoid Bear Markets is contrary to that other advice. My foremost strategy is to protect your capital. It requires a 100% gain to off-set a 50% loss. I would rather miss the bulk of the 50% loss, even if it means I might miss a subsequent 50% rise. The Buffet strategy is for professionals. Individuals need to be more careful.
I think this is a very sensible recommendation for non-professionals.
I highly recommend this book and I will read it again if I start to lose my senses in the next bull market.
Reader Comments (2)
Michael,
Thanks for sharing the review. No-nonsense, fact-based advice is the only counsel which should be followed if you're serious about gaining wealth through investing.
I'm not trading now but am keeping tabs on the market. I've used IBD's CANSLIM strategy with success in the past. I've also devoured any works on Jesse Livermore, chief among them ''Remin of a Stock Operator.' It's about sifting through the street's BS to get at the facts, knowing that you will be wrong a large % of the time, studying, and continuing with enthusiasm.
Ryan,
Exactly! Continue studying with enthusiasm and passion. The markets are fascinating. You should read my article about Sandbox (trading or investing). The earlier you start the more knowledge compounding you get. Start early!
Michael