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Simple But Not Easy: An Autobiographical and Biased Book About Investing

Book Description

Described by the author as "a slightly autobiographical and heavily biased book about investing", Simple But Not Easy has plenty of interest to the experienced professional, and is aimed also at the interested amateur investor. The theme of the book is that investment is simpler than non-professionals think it is in that the rudiments can be expressed in ordinary English, and picked up by anybody. It is not a science. But investment is also difficult. People on the outside tend to think that anyone on the inside should be able to do better than the market indices. This is not so. Picking the managers who are likely to do better is a challenge. Richard Oldfield begins with a candid confession of some of his worst mistakes and what they have taught him. He discusses the different types of investment, why fees matter, and the importance of measuring performance properly. He also outlines what to look for, and what not to look for in an investment manager, when to fire a manager, and how to be a successful client.

Table of Contents

  1. Cover
  2. Publishing details
  3. Foreword by Peter Stormonth Darling
  4. Introduction
  5. Chapter 1 – Howlers galore
    1. 1. Ethics matter
    2. 2. Travel narrows the mind
    3. 3. The unthinkable happens
    4. 4. When the going gets tough, the less than tough get going
    5. 5. Keep your distance
    6. 6. A portfolio needs a lot of little decisions, not one big decision
  6. Chapter 2 – Types of investments
    1. Property
    2. Equities, bonds and cash
    3. International diversification
    4. Emerging markets
    5. Volatility and the importance of long-termism
    6. Correlations
    7. Why not 100% equities?
    8. Gold and commodities
    9. Art
    10. Private equity
    11. Summary
  7. Chapter 3 – Hedge funds
    1. The process of short-selling
    2. Great expectations
    3. Good managers: hedge fund vs. long-only
    4. Hedge fund optimism, equity scepticism
    5. The trouble with short-selling
    6. The risk delusion
    7. Judging hedge funds
    8. Bangs and whimpers
  8. Chapter 4 – Fees
    1. The pie and its slices
    2. The pecking order in fees
    3. Summary
  9. Chapter 5 – Indices and index-hugging
    1. Indexing
    2. The desperation of indexing
    3. Index funds and the tech bubble
    4. Index-clinging
    5. Active risk
    6. The Vodafone debacle
    7. The systematic tendency to underperform
    8. Other indices
    9. The reaction to index-clinging
  10. Chapter 6 – Benchmarks
    1. Objectives
    2. Types of benchmarks
    3. Constructing a composite benchmark – clear and simple
    4. Benchmarks in asset allocation
    5. Benchmarks as road maps
    6. The argument for tactical tweaking
    7. The asset allocation framework
    8. Summary
  11. Chapter 7 – What to look for in a manager
    1. The Counter-Presentational Principle
    2. Venables ratings
    3. 1. People
    4. 2. Approach
    5. 3. Practice
    6. 4. Environment
    7. 5. Reporting
  12. Chapter 8 – What not to look for in a manager
    1. Past performance really is no guide to the future
    2. Hirings and firings based on past performance do not work
    3. Good managers sometimes perform badly
    4. From worst to best
    5. Gilding the lily
    6. Patterns in performance
    7. Excess of process
    8. The nonsensus of consensus
    9. Looking big, thinking small
    10. Committeeitis
    11. Overspecialisation
  13. Chapter 9 – How to be a successful client
    1. Hire, support and fire
    2. The long-term view
    3. Types of client
  14. Chapter 10 – When to fire a manager
    1. Bad performance is a bad reason
    2. Change in people
    3. Change in investment approach
    4. Bad reporting
    5. Admin in disorder
    6. Change in ownership
  15. Chapter 11 – Keep your distance
    1. The visitee bias
    2. Premature beatification of chief executives
    3. Short-termism hurts performance
    4. Information minimalism
  16. Chapter 12 – The folly of forecasting
    1. Forecasting markets
    2. Economic and earnings forecasts
    3. An alternative method
    4. Forecasting the inevitable
    5. Reversion to the mean
  17. Chapter 13 – Valuation matters
    1. Distinguishing between value and growth managers
    2. No such thing as a value stock
    3. Value managers outperform
    4. Why value goes on working
    5. The extrapolation flaw
    6. Tainted shares
    7. Investment trusts at a discount
    8. Value traps
  18. Chapter 14 – Heuristics
  19. Afterword and acknowledgements
  20. About this eBook
  21. Other investing eBooks from Harriman House