Book review: “Why are we so clueless about the stock market?”

The book’s title does little justice to convey the usefulness of this sound and informative read. If you are a relatively new investors lacking formal financial or accounting studies this book will serve you well by covering and clearly explaining essential financial investment topics. Even the more experienced could benefit with a refresher on investment concepts simply forgot or just never fully understood their importance.

Mauriusz Skonieczny succinctly provides short examples of the economic impact of capital allocation decisions such as expanding the business, reinvesting in the business, share buybacks, debt reduction, or the distribution of dividends. The book also covers concepts such as identifying economic moats, margin of safety, stock valuation, discounting future cash flows all with easily understandable examples. Many other concepts covered such as when to sell, company analysis, capital structure, diversification, investing in IPOs, analyzing an investment, real estate versus stocks along with other nuggets of useful ideas for anyone.

This book with only 150 pages makes a perfect read for those that want an understanding of the qualitative and quantitative investment finance topics useful for all serious or soon to be serious investor.

I receive no compensation for writing this review


Carrigaline said...

I see that Paul Sonkin has been buying ELST and has now boosted his ownership of the company to 25%. This buying would explain the price being bumped up from the low 30 cents to high 40 cents. With 25% of the company, I imagine that Sonkin has enough control to push forward whatever measures he see fit to enhance shareholder value. With over $2 million of cash on hand, what do you reckon are the most likely options that Sonkin could pursue?

I'm asking this, because my main worry is that if he pushes for the cash to be distributed as a dividend, most of us will be taking a taxation hit.

ShadowStock said...

Hello, I don’t believe Mr Sonkin is an activist investor and his position in ELST is just as a passive shareholder. But it doesn’t hurt to see P Sonkin still believing there is value in holding the shares of ELST. Hummingbird appears to be more of a highly diversified portfolio built on the tradition of Graham and Dodd.