Contents

Cover

Series

Title Page

Copyright

Chapter 1: Introduction

WHAT IS AN INVESTMENT PHILOSOPHY?

WHY DO YOU NEED AN INVESTMENT PHILOSOPHY?

THE BIG PICTURE OF INVESTING

CATEGORIZING INVESTMENT PHILOSOPHIES

DEVELOPING AN INVESTMENT PHILOSOPHY

CONCLUSION

Chapter 2: Upside, Downside: Understanding Risk

WHAT IS RISK?

EQUITY RISK: THEORY-BASED MODELS

ASSESSING CONVENTIONAL RISK AND RETURN MODELS

EQUITY RISK: ALTERNATIVE MEASURES

EQUITY RISK: ASSESSING THE FIELD

DEFAULT RISK

CONCLUSION

Chapter 3: Numbers Don’t Lie—Or Do They?

THE BASIC ACCOUNTING STATEMENTS

ASSET MEASUREMENT AND VALUATION

MEASURING FINANCING MIX

MEASURING EARNINGS AND PROFITABILITY

MEASURING RISK

DIFFERENCES IN ACCOUNTING STANDARDS AND PRACTICES

CONCLUSION

Chapter 4: Show Me the Money: The Basics of Valuation

INTRINSIC VALUE

RELATIVE VALUATION

VALUING AN ASSET WITH CONTINGENT CASH FLOWS (OPTIONS)

CONCLUSION

Chapter 5: Many a Slip: Trading, Execution, and Taxes

THE TRADING COST DRAG

THE COMPONENTS OF TRADING COSTS: TRADED FINANCIAL ASSETS

TRADING COSTS WITH NONTRADED ASSETS

MANAGEMENT OF TRADING COSTS

TAXES

CONCLUSION

Chapter 6: Too Good to Be True? Testing Investment Strategies

WHY DOES MARKET EFFICIENCY MATTER?

EFFICIENT MARKETS: DEFINITION AND IMPLICATIONS

BEHAVIORAL FINANCE: THE CHALLENGE TO EFFICIENT MARKETS

A SKEPTIC’S GUIDE TO INVESTMENT STRATEGIES

CONCLUSION

Chapter 7: Smoke and Mirrors? Price Patterns, Volume Charts, and Technical Analysis

RANDOM WALKS AND PRICE PATTERNS

EMPIRICAL EVIDENCE

THE FOUNDATIONS ...

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