|   Fear and Greed: Investment Risks and Opportunities in a Turbulent World By Nicolas Sarkis A book review by James Faulkner of WatsHot.com Fear and Greed costs just £16.99 in the Square Mile Bookstore and can be bought by clicking here. "While less sophisticated players may well prefer to kneel and pray that the poor returns on stocks since 2000 will soon somehow be miraculously transformed into a new bull market, serious investors should instead delve into the history books." These are the words of warning Nicolas Sarkis conveys to his readers as he heralds a "lost era" for equities in the opening chapter of his refreshing appraisal of the investment landscape, Fear and Greed. Sarkis, the founder of investment firm AlphaOne Partners and notable for being the youngest ever Goldman Sachs Associate, sets out to equip readers with the insight necessary to avoid the pitfalls of investing in a "lost era"; indeed, he is well placed to do so, having preserved and increased his clients' wealth throughout the turbulent years of the financial crisis.
The book can broadly be divided into two parts; the first six chapters deal with specific investments and market themes - equities, de-leveraging, gold, emerging markets, government defaults, and the euro - while the last four address some of the broad sweeping issues that will colour the investment environment for years to come - fearfulness among investors, regulation, fraudsters, and central bankers (perhaps he should have put the last two in the same chapter?). Sarkis is particularly bullish on gold due to the fact that it has a low correlation to equities, making it "a great asset for balancing out risks on equity investments and vice versa". However, for those looking to diversify into emerging markets he cautions that a renewed downturn would probably see them among the worst performing asset classes, particularly in Asia, where China shows many symptoms of a bubble.
However, what is perhaps the biggest wake-up call for investors comes during the first pages of the book. Long periods of equity underperformance are not as rare as most investors might like to think: the US - often seen as one of the best performing markets - saw three "lost eras" during the 20th century where equity prices fell over a decade or more. Ominously, Sarkis points out that since its last great top in 2000, "Wall Street has not come anywhere near to being as cheap as it was at the end of any previous lost era". In fact, when the S&P hit its lowest point to date in today's lost era, back in the dark days of 2009, it traded on a long-term price-to-earnings multiple of 13.3, as opposed to long-term PEs as low as 4.8 to mark the end of previous lost eras.
Despite being a little on the short side (the book runs to just 218 pages), there is plenty of sensible advice in Fear and Greed to keep investors of all levels engaged. This might just be the best book on investment you'll read this year. Fear and Greed costs just £16.99 in the Square Mile Bookstore and can be bought by clicking here. Visit www.SquareMileBookstore.com for the ultimate range of investment, trading and business books, personally selected by investment experts, with exclusive free reviews from some of the UK's foremost investment writers. |
|
If you do not wish to receive such emails please use the following link to unsubscribe. UK-Analyst.com is owned by t1ps.com Ltd which is authorised and regulated by the Financial Services Authority
The hot share tips given here are of necessity, general. They cannot relate to the individual circumstances of investors. Anyone considering following the share tips contained here should seek independent advice from a Financial Services Authority authorised Stockbroker or Financial Adviser. So, while we would not wish to reduce our liability under the FSA regulatory regime, we cannot otherwise be held liable if individuals suffer losses through following share tips contained on this site or emailed out as free share tips. The value of investments can go down as well as up. The past is not necessarily a guide to future performance. Investing in shares can lose you part or all of your capital although the potential returns are theoretically unlimited. The difference between the buy share price and the sell share price for smaller company shares (penny shares) can be significant. Profits from dealing in shares may be liable to tax - the level of tax and bases of relief from tax are subject to change. Changes in the rates of exchange may have an adverse effect on the value or price of an investment in sterling terms if it is denominated in a foreign currency. Financial spread betting is a high risk investment, losses from which are potentially unlimited. Some of the shares recommended on this site will be smaller company shares. By their nature such investments can be relatively illiquid and thus hard to trade. And that makes such investments more of a high risk than larger company shares (or 'small caps'/'penny shares'). UK-Analyst.com defines a smaller company share as any stock traded on AIM or PLUS or which has a market capitalisation of less than GBP300 million.
No comments:
Post a Comment