Book reviews by Manish Gvalani, CFA

Here are the book reviews by Manish Gvalani CFA, offering insights into four different titles on investing and finance, each summarizing the key takeaways and the value they bring to investors:

The Psychology of Money – Morgan Housel

Investing isn’t only about compounding, business analysis, sectoral research, or macro calls. 90% of investing has to do with keeping the monkey mind in check. It’s about keeping envy at bay, not getting seduced into rash decisions due to fear or greed, and about having clarity of one’s own psychological tendencies. These play a very crucial role in building one’s wealth and there are only two ways to learn them – either by losing money in your investment journey or by reading Morgan Housel’s book once every quarter. I chose the latter and I couldn’t have been luckier to have bumped into this goldmine so early in my investing journey.

Just keep Buying– Nick Maggiulli

A lot of investing-related news or reports are designed to create some kind of action from the community i.e. buy when markets are trending high and sell when panic has set in. This constant buy and sell keeps you busy but it hasn’t proven a profitable means to accumulate life-changing wealth for anyone, barring 1% of star traders or speculators globally. What has been proven to generate tremendous wealth has been simple rules like – saving more than you spend, investing in indices and staying put, doing nothing when the world is losing its sanity, being patient, and letting the investments compound. ‘Just Keep Buying’ delves exactly into these topics and supports its arguments with many data points and charts that would impart these learnings in a crisp and concise manner. It’s a must-read book for anyone looking for an evidence-based investing approach and it also answers many important questions like – should I buy or rent? how much to allocate to equity? how much to keep in cash? should I buy stocks directly or invest in an index?

Where are the Customer Yachts – Fred Schwed Jr.

Ever wondered why so many professionals in the investment field make millions while their customers don’t? Ever wondered about the psychology of investors that makes them trust bankers in pinstripes in spite of their below-average performance in compounding wealth? If you have, then I invite you to read this hilarious but thought-provoking book about deceiving professionals, gullible investors, the spinning of dreams, and the circus of money that has been going on for centuries. The comic affair of investors parting with their hard-earned money time and again has been beautifully highlighted in this book. The entire investing profession has been covered through the lens of emotions, biases, lies, and comedy – that won’t only make you laugh, but it’ll also nudge you into becoming more skeptical of everything you come across. It’s a world of snake charmers out there and you better get your defenses stronger against their skills of seduction and deception. 

The Snowball – Alice Schroeder

For anyone investing in equity markets, I would recommend Warren Buffet’s autobiography for many reasons – 1. It will elaborate upon the value system one needs to imbibe for compounding wealth for decades 2. It will highlight the mistakes that could ruin your reputation, peace of mind, and your financial wellbeing. It does this so well that not reading this book would be a big mistake for any investor. 3. It emphasizes the importance of relationships in one’s life i.e. family, friends, partners, and colleagues. This point also calls for developing the ability to judge people, without which you could be exposed to risks that you can’t handle. 4. It makes you aware of a very effective way of evaluating your own success and happiness, which has nothing to do with how the world looks at you. This alone is a superpower.

Disclaimer: “Any views, opinions or recommendations represented here, are personal and belong solely to the author and do not represent views of CFA Society India or those of people, institutions or organizations that the owner may or may not be associated with in professional or personal capacity, unless explicitly stated.”