Rating: 
Summary: Best Beginners Book (imho)
Review: This remains one very, if not "the most" comprehensive, approachable, vast overview on stocks & bonds, inflation & money markets, the business cycle & market psychology.The arguments presented in this book are grounded in long-range empirical historical results backed up with carloads of analytical data to back up its assumptions. One of Jeremy Siegel's main points is that the time-frame horizon of various investment vehicles and strategies can be quite decisive in determinating your financial goals and end-results. In the end, a lot (if not everything) depends on the time-frame you are willing to consider... The more time you have available, the safer you could/should feel towards your principal, and that more especially if it consists of stocks. Another of Jeremy Siegel's arguments, which is incumbent on the precedent one, is that the greatest long-term erosive power of wealth remains inflation (an undesired by-product of growth), and that the safest cushion towards and fence against inflation is still the stock-market, followed closely by real-estate property. The final and conclusive argument is that the best way to index the global generation of wealth and general progress of civilization (get a fair share of the pie, if you wish), is to own stocks in the long run. This reveals itself as the best way to piggy-ride the world's long-range generation of wealth, and the safest way to park your wealth long-time, more especially if you have a few decades ahead of yourself before you eventually need or want to get your hands on it... so that it can be said with a certain amount of certainty that this is definitively not a book for the hot-blooded, quick-buck day-trading artists and other various market-wizards, although some of the information it contains could (could) eventually (eventually) be put to some (good) use by some (some) of them, at one time or another. The fact is that, apart from historical points and empirical arguments, the work is spiced up and loaded with a great plenty of market wisdom (the vanity of attempting to predict or time the various business cycles), market and investor psychology (the vanity of following the heard, and how difficult it is sometimes not to do so), various historical anecdotic facts of which some of them are almost useless although interesting (sell on Fridays and buy on Mondays, Octobers are bad months for the stock market, the January effect, etc.) and others relatively intriguing (the stock market generally fared better under Democratic than under Republican presidencies - is it because the hands-off attitude of Democrats which do not claim to understand the Economy, and to be its well-intentioned friend, is more reassuring to investors at large, giving them a long-sought relief and allowing them to finally concentrate on their subject without being disturbed and distracted by various demagogic ramblings?), and a few useful facts (in a global market downturn, it can be quite handy to short spiders amongst other things, as these are exempt of the prohibitive downtick rule), the importance of dividend streams in roughly assessing market valuations (valuations based on dividend yields, like the valuation of bonds, are at the cornerstone of many other valuation techniques such as the cash-flow and free cash-flow valuations), the different behaviour of small- and mid-caps compared to that of large-caps in various periods of the business cycle, the relative safety of nifty-fifty blue-chips, the self-cancelling effect of various widely applied financial strategies (in the end result, all the smart and active negators of the efficient market theory tend to establish a theory they see as and would like to prove as flawed), the relative attractiveness of various index-based passive investments, etc. etc. etc. Anyway, to cut matters short, if it cannot be said that this book constitutes a must-have for all sorts of audiences under the sun, I believe one can venture to state with a certain amount of safety that this book may certainly constitute a must-read at one point or another of one's personal financial education. Although some of the historical-empirical-analytical work contained in this book has at times been used as an advocacy of the historic legitimacy of the explosive bull-market in the late-nineties (remember Alan Greenspan stating at the turn of the century that it may well be "possible" that the "new economy" has now allowed us to enter a new era of perpetual and unrestrained growth, just like others claimed that it was the case in the late twenties before the crash), its almost scientific empiric groundings make it still a highly recommendable book today, and that to a great variety of audiences, so that all irony and sarcasm apart, it can be safely asserted that its broad and historic approach allows one to state that it remains a book for the long run, regardless of the momentary market downturns and/or stagnations, or maybe especially because of them (remember that when everyone is a bear, it usually pays to be a long-term bull, although the reverse might not necessarily be true).
Rating:
Summary: Read it, study it, apply it, reap the rewards
Review: Wharton finance professor Jeremy Siegel is one of the most credible, most astute stock market analysts in the world. He is not a mindless stock cheerleader; in fact, his March 14, 2000 Wall Street Journal article entitled "Why Big Cap Tech Stocks Are a Sucker's Bet" persuasively pointed out how the high tech stock emperor had no clothes, and helped burst the insanely overvalued tech bubble. This was at a time when the vast majority of Wall Street analysts were inventing new valuation methods to justify insane stock prices, while other more pessimistic analysts had declared an "irrational exuberance" years before the market actually topped. "Stocks for the Long Run" is Siegel's seminal work (now in its third edition), an excellent introduction to investing for the average investor looking to save for retirement. If the SEC were to choose one book to force people to read before they were allowed to invest their money in the stock market, this book would be it. In fact, the people who lost their retirement money because it was all invested in one stock such as Enron or Worldcom (or a bunch of dot-coms), or who lost a fortune day trading when the market tanked, would have been so much better off if they had just read this book and applied its lessons. They would be better off, the market would be much less volatile, the allocation of capital would be more efficient, the economy would be stronger, and the world would be a better place, if only more people would read this book. "Stocks for the Long Run" gives you all the knowledge you need to implement a solid investment strategy. Siegel educates and informs (this book will teach you all the basics you need to know to watch CNBC and to understand the market), and he packs his book with as much long-term data and supporting evidence as possible. He is a firm believer in the scientific method and data; he does not posit recommendations unless they are firmly supported by historical evidence. The good news in the third edition (post 1990s/2000 bubble) is that the case for investing in stocks is still a strong one. Siegel presents extremely persuasive arguments why, long term, stocks hold their value and gain value better than any other type of investment (fundamentally, we must never lose sight of the fact that stocks are claims on real assets and the cash flows generated by enterprises). Surprisingly, stocks are lower risk, long-term, than bonds. Siegel presents some good arguments why stocks now deserve a higher-than-long-term-average P/E, but also shows how index investing (which he still heartily recommends) is distorting the market, and how our expectations for returns from stocks need to come down slightly. He correctly identifies TIPS as the best investment for those seeking short-term safety. Siegel's main argument is that investors should get into stocks in such a way as to match the overall return of the market, which will provide them with a healthy long-term return on investment. He does show a number of ways to improve on that return and beat the market, such as by recognizing when the market is under and overvalued, thereby buying low and selling high. Thus, I would recommend that a new investor first read, study and apply "Stocks in the Long Run", and then move on to Ben Stein's "Yes You Can Time the Market" as a way to optimize the lessons from "Stocks in the Long Run".
Rating:
Summary: Read it, study it, apply it, reap the rewards
Review: Wharton finance professor Jeremy Siegel is one of the most credible, most astute stock market analysts in the world. He is not a mindless stock cheerleader; in fact, his March 14, 2000 Wall Street Journal article entitled "Why Big Cap Tech Stocks Are a Sucker's Bet" persuasively pointed out how the high tech stock emperor had no clothes, and helped burst the insanely overvalued tech bubble. This was at a time when the vast majority of Wall Street analysts were inventing new valuation methods to justify insane stock prices, while other more pessimistic analysts had declared an "irrational exuberance" years before the market actually topped. "Stocks for the Long Run" is Siegel's seminal work (now in its third edition), an excellent introduction to investing for the average investor looking to save for retirement. If the SEC were to choose one book to force people to read before they were allowed to invest their money in the stock market, this book would be it. In fact, the people who lost their retirement money because it was all invested in one stock such as Enron or Worldcom (or a bunch of dot-coms), or who lost a fortune day trading when the market tanked, would have been so much better off if they had just read this book and applied its lessons. They would be better off, the market would be much less volatile, the allocation of capital would be more efficient, the economy would be stronger, and the world would be a better place, if only more people would read this book. "Stocks for the Long Run" gives you all the knowledge you need to implement a solid investment strategy. Siegel educates and informs (this book will teach you all the basics you need to know to watch CNBC and to understand the market), and he packs his book with as much long-term data and supporting evidence as possible. He is a firm believer in the scientific method and data; he does not posit recommendations unless they are firmly supported by historical evidence. The good news in the third edition (post 1990s/2000 bubble) is that the case for investing in stocks is still a strong one. Siegel presents extremely persuasive arguments why, long term, stocks hold their value and gain value better than any other type of investment (fundamentally, we must never lose sight of the fact that stocks are claims on real assets and the cash flows generated by enterprises). Surprisingly, stocks are lower risk, long-term, than bonds. Siegel presents some good arguments why stocks now deserve a higher-than-long-term-average P/E, but also shows how index investing (which he still heartily recommends) is distorting the market, and how our expectations for returns from stocks need to come down slightly. He correctly identifies TIPS as the best investment for those seeking short-term safety. Siegel's main argument is that investors should get into stocks in such a way as to match the overall return of the market, which will provide them with a healthy long-term return on investment. He does show a number of ways to improve on that return and beat the market, such as by recognizing when the market is under and overvalued, thereby buying low and selling high. Thus, I would recommend that a new investor first read, study and apply "Stocks in the Long Run", and then move on to Ben Stein's "Yes You Can Time the Market" as a way to optimize the lessons from "Stocks in the Long Run".
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