What do our readers say?
★★★★☆ (4.5 out of 5.0)
“An in-depth introduction to stock and bond investments. Assumes the reader has no prior background. Covers in narrative form with examples: fundamentals of financial statements, financial ratios, primary and secondary offerings, price/earnings ratios, commonly misunderstood terms such as capitalize, equity, cash flow, diluted earnings and more. Book is not just a glossary, but explains things in depth.” – GoodReads
★★★★★ Excellent first book on investments “I have been a professional money manager, in charge of over $5bil. in international funds. This was the first book I read on the subject of stocks, over 15 years ago, and I still think it’s one of the best: lucid, friendly, non-patronizing. It dares to cut through the obfuscating language of the profession and the tons and tons of blah, blah, blah, and answer that basic question, ‘What is a stock?” This is the one book I’d recommend to anyone wanting to find the answer, complete beginner and seasoned veteran alike. (I am constantly surprised to find out that even professionals can’t give a clear answer to this question; and the market’s behavior over the past 2 years suggests that many never knew it in the first place.) To first-time readers, I envy you; good luck on your journey!” – A customer
★★★★★ A Superb Introduction to Investment Analysis “This book will get you started in understanding stocks and bonds, but you will also find yourself referring back to it again and again as your knowledge expands through further study. The authors introduce the most basic concepts and develop them right up through the point of making an investment decision. Their coverage of the topic is encyclopedic, so their book can fill in gaps even for experienced investors.
Pike and Gregory contend that this book will enable you to understand other investment books. I can affirm that it provides the necessary foundation for reading my own book, Financial Statement Analysis: A Practitioner’s Guide (co-authored with Fernando Alvarez), which focuses on the accounting tricks that companies use to mislead investors. One thing is for sure: You should not venture into the deep water of the securities markets without the knowledge masterfully presented in Why Stocks Go Up and Down. – Martin Fridson
★★★★★ All new investors should read this before any other book “For several years now, I’ve been trying to read books like Graham’s The Intelligent Investor and Fisher’s Common Stocks, Uncommon Profits, but was always stymied by some language that the authors seemed to just expect me to know already. I heard about this book from an interview with Michael Burry, the brilliant investor who shorted the subprime CDO market (see The Big Short by Michael Lewis), who said that it is a great book to learn the fundamentals.
It is really clear that Bill Pike has taught this subject for many years, as he seems to anticipate all the questions that a beginning investor would have and answers them in such a clear manner – – clearer than any other teacher I’ve come across. This is how all introductory books should be written!
Now I can finally tackle the stack of investing books that I’ve acquired over the years AND UNDERSTAND THEM!” – B Winter
★★★★★ Great Primer “This book is very useful for anyone who wants to learn about the work that an equity research professional does. I think it’s excellent.” – JO2446
★★★★★ “If you are a complete neophyte wanting to learn how to read/understand/analyze financial statements then this book is for you. This book starts off by describing what a company is, how and why everything is accounted for – in simple and unassuming language. The book also explains the concepts in detailed yet straightforward way such as working capital (receivables, inventory, prepaid assets), financing (equity/debt) and finally what makes common stocks move. It was perfect for me because I hadn’t taken a single course in accounting and didn’t have any background in finance.
Overall – excellent intro book for beginners wishing to learn and understand the basics.” – SSD
★★★★Another Book Review from the Aleph Blog “This is a good book to help the inexperienced learn about investing. It begins by teaching the rudiments of accounting through the adventures of a man and his company who have built a better mousetrap. He starts the business on his own, but needs more capital. In the process of growing, he taps bank loans, private investors, public investors, bonded debt, and preferred stock. All of this is done with simple explanations in a step-by-step manner.
The book then explains bonds and preferred stocks. At first I was a little skeptical, because this is supposed to be a book about stocks, and the authors made a small initial error in that section. That was the last error they made. I became impressed with their ability to explain corporate bonds and preferred stocks, even some arcane structures like trust preferred securities, and other types of hybrid debt.
Now, if I were trying to shorten the book, a lot of those sections would have been cut. For those that do want to learn about bonds in the midst of a stock book, you get a free bonus. If you don’t want to spend the time on bonds, you can skip those sections with little effect on your ability to understand the rest of the book.
Then the book turns to trickier aspects of accounting, explaining cash flow from operations, and free cash flow. It’s all good stuff, but here is my first problem with the book: what is the most common way of giving a distorted picture of earnings? Revenue recognition policies. The book does not talk about revenue recognition, and the most basic idea of Generally Accepted Accounting Principles [GAAP], which is revenue gets taken into earnings proportionate to the delivery of goods and services.” – David Markel
★★★★★ A Great Place to Start “I have been investing for over 10 years and read a number of investment books. When I got this book I was both skeptical and intrigued by the subtitle, “The Book You Need To Understand Other Investment Books”, but after going through it, I can understand why the authors call it that. A lot of investment fundamentals are covered in depth that other books assume you know already.
Positives: 1. Good introduction to balance sheets and income statements without taking an accounting course. Numerical examples and calculation are well laid out and easy to follow. 2. Good discussion of cash flow and how it is used by investment analysts. 3. The last chapter is a case study of Abbott Labs. I found it really helpful in understanding what an investment analyst does.
Strongly recommended!” – Jim Barker
★★★★★ An Amazing Book “I have read multiple, as well as a variety of books over the past fifteen years, since I started to invest in the market. I read the first edition many years ago, and I read the latest edition several months ago. The excellence continues. You will not learn technical analysis, but you sure will learn the basis of fundamental analysis in a lucid and highly stimulating manner. Use this book as the foundation and then use any of the multitude of books out there to expand this basic knowledge. When you further your reading it will be done with a sound basis in fact. Good Hunting!” – A Customer