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Rating: 
Summary: A valuable overview of the investment landscape...
Review: Contrary to what some may think, there is a secret to good investing, and Glassman does a good job of explaining it. It's an open secret, to be sure, but one most so-called investors ignore: generating cash (for example, through day trading and other high-turnover practices) does not lead to the accumulation of wealth. Only through a disciplined approach to investing, involving (1) the accumulation of quality stocks, mutual funds, and/or other preferred financial assets, and (2) patience that allows time to let these investments work for you, will it be possible to achieve your financial goals. Following the heady, market-drive craze of the late 1990s, it's a secret that even the most seasoned investor would do well to reconsider.No question, it's the new or inexperienced investor who has the most to gain from a read of this book. For one thing, Glassman's review of the many investment vehicles available today provides, in one readily accessible volume, the information needed to make intelligent decisions regarding asset allocation. And the explanations that attend the presentation are written in language that even the novice will understand. If you've already made your millions and view playing the market as a pastime, this book is not for you. But if you believe that there must be a better way to select from among the many investment theories touted and to identify, and invest in, preferred investment vehicles appropriate to your age and temperament, purchase of The Secret Code of the Superior Investor may well be among the best investments you could make.
Rating: 
Summary: Don't waste your money on this one.
Review: I found this book a waste of my time.
Rating: 
Summary: Refresher for Superior Investors
Review: I sorely missed James Glassman's column when he took a break from writing for the Washington Post. Now that his column has resumed every Sunday, its like an old friend has moved back to town. Do the math exercise. Pick any prior Dow closing price and compound the Dow by 10-11% per year historical average annual return and you'll find when the Dow will be at 36,000. Or pick another return figure you like and see when Dow 36,000 occurs. Whenever that happens, Glassman's prior book will be "rediscovered" by the financial media and he'll be praised as having incredible vision. How did he know? But by then it may be too late to invest to achieve decent returns. And I trust at that point he'll say so. One of the key messages in Secret Code is don't be fooled by the title. Glassman demonstrates that all of the information you need to make rational, informed decisions is quite public via the web and other information resources. Glassman is a teacher and interpreter. He references the sacred texts (Graham, Buffet, Siegel) but doesn't dwell on them. Instead he will sit and discuss this information with you in a straightforward manner. Each chapter is about a newspaper or web page column length, great for short bursts of reading. If you want to be manic or listen to people shouting turn on CNBC or Jim Cramer. The heart of the Secret Code is that it's quite straightforward. Look at how a company achieves returns on invested capital, assets, and equity. Watch out for too much debt. Spend a little time with the financial statements. Are they growing their top line business? Don't look at earnings too much. A lot of earnings games are possible (My god will they beat (or miss) by a penny!) Instead focus mostly on the cash flowing to the bottom line. Glassman reminds us, its all about the cash. Warren Buffet spoke to my MBA class, that's what he said too, this isn't new. Then see what they do with the cash, give some back to shareholders via dividends, buy back their own shares increasing owner equity, or invest and acquire to expand the business. Look for companies where management respects shareholders. Avoid companies whose managers are a bunch of arrogant selfish scoundrels (pick your most recent favorite). When your CFO departs in a hurry probably nothing good will result. And don't forget to diversify. Keep a wish list of companies to buy when the opportunity presents itself. It may be repetitive at times but I never tire of being reminded to build wealth with great companies in numerous areas including health care, financials, real estate as well as technology. Don't like looking at financial statements, then employ a good mutual fund. Some good ones are recommended. Use a small fun and games account (FGA) to try to outsmart the market. But don't confuse that with real investing or wealth building and prepare to be humbled. Next time I'm tempted to invest in a "story" company with no revenues, earnings or cash flow, I'll pick up the Secret Code, skim a few chapters and forget the idea. Then I'll breathe deeply, rest well and look forward to next Sunday's column. Lets' close with a joke "there was no trading today in the financial markets, everyone was satisfied with what they own".
Rating: 
Summary: Solid "buy-and-hold" strategy
Review: I used to be skeptical to investment books written by "financial journalists" (author is financial columnest of Washington Post). However, this one proved my prejudice was indeed prejudice. Mr. Glassman's idea and theories are well-balanced and reasonable whether I agree or not, it clearly shows the merits of value investment (from B. Graham and W. Buffett).
Main message of the book can be summised as "own carefully diversified portfolio(of about 30 stocks) and hold it through ups and downs of market, disregarding the dimension of the fluctuation, for long, long time (about 30 years)".
I have some reservations, though.
1. Mr. Glassman advise we should start investment at the age of 25 so we can collect lump sum of income at the time of retirement. I'm 27 and I don't have enough money to invest in diversified portfolio of 30 blue chips to hold for 20, 30 years. Am I the only one... ?
2. If you're considering investment with your pension fund, you will be at your 70s or later at the time of collecting your return.
3. Even if Mr. Glassman can legitimately dismises intermediate, short-term market fluctuations as "unpredictable", there are grand bear markets, usually come with broad economic recession, which last up to years. And they ARE recognizable. It is not just sinsible thing to do to hold it through those gloomy market conditions. We are not obliged to hold, we have a choice- we can always stay out of market when things are not favorable.
4. One quoted proof Mr. Glassman presents as to be why buy-and-hold strategy works is that since 1926 stock market has returned 11% annually and it will likely continue to do so. I just don't believe 11% of return (after inflation) is attractive enough, unless you have very big initial input.
5. Mr. Glassman said "invest in people not stocks", or "don't invest in things, invest in brain"- translated into "know the managers". He seems to know some of managers of big cooperations rather personally mainly from his journalist career. Well, not me, and again, am I the only one who
never had a chace to get to know them?
Some of basic assumptions author made are flawed. Generally viewed it sounds right, however, if you look into it it sounds more and more idle. Fortunately Mr. Glassman was smart enough to show me a few good ideas. Perhaps other will find him more plausible.
Rating:
Summary: Don't waste your money on this one.
Review: If I could have written a book I would have liked to have written this one. Gives a long term philosophy of investing which sadly was ignored in the latest stock market bubble. This book doesn't do your thinking for you but gives you enough history, philosophy and guidance so you can become a successful investor and not an in and out trader, an activity which is doomed to fail for all but the most seasoned professional. I have been investing for over 30 years, have been successful and believe Glassman hits the high lights so important for long term success, including counting dividends toward your total return.
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Summary: Boring is beautiful!
Review: If you want to read a boring book, "Secret Code" is for you. Why boring? In a world of minute-by-minute market news and analysis, "Secret Code" cuts through the clatter and calms things down a bit. Glassman points out that, "when it comes to stocks, boring can be better than exciting," which is basically the subtext of the entire book. I was immediately interested in the book as soon as I read the subtitle (though I must confess the Cold-War-spy-novel-looking cover made me chuckle). The difference between long-term and short-term is more than just the time horizon: it is a mindset. So I wanted to learn what the author had to say on the subject. "Secret Code" is written to encourage investment primarily in individual stocks. Not bonds. Not mutual funds. Glassman begins with an introduction which, in essence, is the Reader's Digest version of the rest of the book and highlights ten basic principles on which the rest of the book expounds. The last two-thirds of the 318 page book supports the ideas presented there. Along the way, Glassman rails against the Fed, the financial media, the tax code, corporate bonds, day-traders, and Clinton. (Liberals and socialists beware: "Secret Code" may occasionally step on your collective toes.) One of the most surprising facts I learned from "Secret Code" was that stocks are less risky (i.e., less volatile) than bonds in the long run. This seems counter-intuitive, but Glassman debunks the notion entirely. Indeed, his entire thesis rests upon this fact (as do all ten of his enumerated principles). As he explained this concept, he invoked terminology from the realm of statistics. Potentially, this might have put off some readers. I thought he did an excellent job of explaining the terms to the layperson, while weaving in enough technical detail to keep the "statistics-initiated" intrigued. Glassman does, however, impose several parameter requirements on the notion that stocks are less risky than bonds. First, the longer the time horizon, the less the risk. Indeed, in the short run, Glassman emphatically supports the purchase of bonds (preferably treasuries) over stocks. He says that stock investments cannot be relied upon to preserve principle over short time spans. He points out the concept of random walk, and refers the reader to the work of economist Burton Malkiel and his 1973 book, "A Random Walk Down Wall Street." Glassman's bottom line here is this: Buy and hold. Sell almost never. Second, choose stocks from quality companies with which the investor becomes a partner. In other words, not just any stock will do. Glassman offers the reader a crash course in financial accounting by explaining balance sheets, income statements, cash flow statements and several key ratios. Again, Glassman strikes a good balance between technical rigor and simple explanation. I personally found this portion of the book more enjoyable as a result of my recent coursework in the subject area than it might have been otherwise. Third, maintain a well-diversified portfolio of stocks. The portfolio should contain large and small capitalization stocks, representing a large cross-section of market sectors. And, in Glassman's opinion, the portfolio should contain at least 30 stocks. The whole point to all of this is, of course, to minimize volatility (and, thus, risk). This is a bedrock principle, and there is very little dispute in the investment world that a diversified portfolio is less risky, regardless of time horizon. "Secret Code" is comprised of 47 short chapters, which make for a quick read. His defiance of the ivory tower types was refreshing. For example: "Ignore the Fed," "the best rule for daytime financial television is this: Don't watch it," and, with regard to fund managers, "in some ways, amateurs do have an edge on the pros." Glassman never shied from an opinion, either. For instance, he said "margin buying is dumb," "investing in options [is] a sucker's game," and "I detest corporate bonds." It would be great if this kind of forthrightness existed among stock analysts. "Secret Code" provides principled information on stock purchasing. Nevertheless, I felt the book had two shortcomings. First, "Secret Code" had the potential to be an enduring thesis on the topic of wealth-building, but I think Mr. Glassman undermined himself by recommending specific stocks (GE, Dell) and market sectors (pharmaceuticals, education). While I don't quarrel with his arguments in support of these companies and sectors, investors ten years from now will face different market conditions and may gain little utility from that portion of the book. In a way, Glassman didn't follow his own advice regarding the long term. Another, perhaps minor, shortcoming is his seeming, thought subtle, duplicitous opinion of mutual funds. In several places throughout the book, he points out that fund managers often have a lot of latitude which can negatively impact the individual investor's best interests. Investors retain less control over such factors such as taxes, diversification, bond ownership, and long-term focus when invested in mutual funds, says Glassman. Yet, somewhat contradictory, he recommends looking to mutual funds as a source of potential stock picks. I don't like get-rich-quick books, and "Secret Code" is far from that. I also don't like books that speak down to me as if I couldn't possibly have any prior knowledge or experience. "Secret Code" doesn't do that, either. In sum, my parting thoughts on this book are simple. I found the book to be interesting, I learned from it, and I would recommend it to others interested in the topic. If you enjoy the excitement of daily stock price moves, if you await the Feds next utterance with bated breath, if you can't get enough of CNBC, then don't read this book. But if you want to experience the boredom of building wealth, then you must first learn the secret code of superior investing.
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Summary: Not again!
Review: It wasn't until I recently read a piece by James Glassman in the Wall Street Journal that I learned that this guy had the audacity to write another book! After his ludicrous predictions in his ill-fated "Dow 36,000" book, you think the guy would want to stick his head in the stand forever. Frankly, I wouldn't trust anything that Glassman, who has been accused of misusing data, has to say. If you want to improve your investing prowess, I'd suggest relying upon the recent books written by William Bernstein and Lynn O'Shaughnessy. Don't waste your money on the Secret Code.
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Summary: Further Popularization of Popular Stock Investing Books
Review: This book is for people who are totally unfamiliar with the "buy and hold" school of stock investing based on selecting superior companies with outstanding management. The material in it is almost totally derivative from the research and experiences of others available in more detailed popular books. The key points are that (1) you should know yourself, so that you invest in ways that fit your emotional makeup when stocks are doing poorly; (2) time is money, and you should start buying stocks at the youngest possible age; (3) pick stocks by the caliber of the company and its management; (4) own stocks in diversified portfolios to avoid excessive fluctuation risk; (5) risk of stock price loss is reduced by holding stocks longer; (6) avoid trading stocks -- buy and hold instead; (7) ignore what the media says about stocks (unless the information brings into doubt the reason why you own certain stocks); (8) ignore the Federal Reserve; (9) for short-term investments buy high quality bonds; and (10) pay attention to reducing expenses, taxes, and outperforming inflation. In support of these points, well-known studies and books are cited such as those by Jeremy Siegel (Stocks for the Long Run), about Warren Buffett (and other famous investors like Phil Fisher, Philip Carret, and Sir John Templeton), and by Ben Graham. Mr. Glassman is one of the authors of the theory that stocks are way undervalued and the Dow should soon trade at 36,000. Although most professionals and academicians have questioned his theory, Mr. Glassman stands behind it in this book. As someone who reads lots of books about stock investing, the only new thing I learned in this book was the Leslie Douglas Theory involving purchasing equal amounts of the 5 largest NASDAQ stocks each year (which produced a ten year gain of 39.1% versus 15.8% for the Dow). So for me, this book was a big waste of money. I also thought that a lot of the material was wrong. Basically, you are encouraged to buy managed stock mutual funds. Over 10 years, hardly any of these will outperform the market indices. As mutual funds are required to say, past performance is also no indication of what future performance will be. You would probably be better off owning indexed mutual funds. The same subjects are covered much better in Common Sense on Mutual Funds by John Bogle, and you can learn more about the virtues of indexed mutual funds in that book. So, I suggest that you skip this book. You would learn more by reading the popular books which it is based upon than by reading this book. May all of your investments help you reach your financial goals . . . and always sleep well at night!
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