The indomitable investor: why a few succeed in the stock market when everyone else fails

254 Pages·2012·1.136 MB·English

by  Sears, Steven M

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The Indomitable
Investor
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The Indomitable
Investor
Why a Few Succeed
in the Stock Market When
Everyone Else Fails
Steven M. Sears
John Wiley & Sons, Inc.
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Copyright © 2012 by Steven M. Sears. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.
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Library of Congress Cataloging-in-Publication Data:
Sears, Steven M.
The Indomitable investor : why a few succeed in the stock market when everyone else
fails/Steven M. Sears.
p. cm.
Includes bibliographical references and index.
ISBN 978-1-118-11034-8 (cloth); ISBN 978-1-118-22433-5 (ebk);
ISBN 978-1-118-23739-7 (ebk); ISBN 978-1-118-26239-9 (ebk)
1. Stocks. 2. Risk management. 3. Speculation. 4. Portfolio
management. I. Title.
HG4661.S36 2012
332.63'22—dc23
2012004096
10 9 8 7 6 5 4 3 2 1
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For Kitya,
Onward, to Ithaca
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Contents
Chapter 1 Risk 1
A Nation of Stock Market Junkies 4
Calm Words for Wild Times 7
Chapter 2 Greed 13
The Hardest Decision 23
The Iron Man 24
Atlas Doesn’t Shrug 27
The Warrior Philosopher 28
Like Monkeys at the Zoo 30
A Context 32
The Danger of Warren Buffett 34
The Value of Errors 35
Chapter 3 Fear 37
The Theory of Contrary Opinion 42
Exile on Wall Street 44
The Media Is the Message 47
Media Misreads Google 49
vii
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viii contents
Paulson’s Gamble 50
Buffett’s Goldman Trade 53
Fading the News 53
Chapter 4 The Anatomy of Information 55
The Doors of Perception 58
Anatomy of Information 60
The Future Is Now 63
Show Business 66
Words Are Weapons 68
Trust, but Verify 70
Chapter 5 Chaos 81
Money Never Sleeps 82
Perversities 82
The Black Swan’s Calling Card 85
Map of the Market 86
Don’t Get Skewed 89
Apathy and Fear Are Your Friend 90
Fear Not Black Swans 91
Is MPT MIA or KIA? 92
800 Years of Crisis 97
Fear Gray Swans 98
Chapter 6 Diogenes’ Lantern 103
Performance Is Relative 106
Death by a Thousand Fees 107
Stockbroker Pay 111
Hidden Fees 116
Beware of New Products 116
An Uncomfortable Conversation 117
A Funny Aside 118
Suitability Requirement 119
Fiduciary Standard 120
Shakespeare’s Rule 121
Appeals to Common Sense 121
Trust but Verify 122
Active versus Passive Fund Management 125
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