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What Works on Wall Street (Hardcover)
by James P. O'Shaughnessy
| Category:
Investing, Stock market, Wall Street, Financial market |
| Market price: ¥ 378.00
MSL price:
¥ 338.00
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Pre-order item, lead time 3-7 weeks upon payment [ COD term does not apply to pre-order items ] |
MSL rating:
 Good for Gifts |
MSL Pointer Review:
Learn what strategies have actually performed the best on Wall Street over the past 40 years using the compstat data base.
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Author: James P. O'Shaughnessy
Publisher: McGraw-Hill; 3 edition
Pub. in: May, 2005
ISBN: 0071452257
Pages: 366
Measurements: 9.4 x 7.6 x 1.7 inches
Origin of product: USA
Order code: BA01451
Other information: 978-0071452250
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- MSL Picks -
This is an extremely valuable book on investing not so much for its excellent analysis of screening methods but also for its implications about investment managers. Too often the investing public sees or hears investment gurus pick stocks for what appear to be valid reasons even though there is little or no research to justify the screening criteria. A Boston based investment firm that used to have a good reputation backed away from buying C when it was at $5 (split adjusted). They missed a six-fold increase in the stock price because their retail/entertainment analyst (not the courageous auto analyst) had convinced the portfolio managers that ROE was important. At the time, C had a negative ROE. This same analyst convinced the same portfolio managers that TWX was a great EBITDA stock. (Earnings Before Interest, Taxes, Depreciation and Amortization) was NEVER tested by the portfolio managers as a criteria for selecting stocks (NET income and Depreciation and Amortization was tested by O'Shaughnessy and found to be a reasonable screen). These professional investors bought one of the worst performing stocks in the S&P 500 over the last five+ years on the basis of absolutely NO research whatsoever on EBITDA. Many so-called professional investors use other flawed methods to screen for stocks and their explanations are often colorful, utterly convincing but grossly misleading. Mr. O'Shaughnessy's work, though it could be more rigorous in terms of some statistical tests such as the Bonferoni and non-parametric ratio analysis, at least points out that there may be some valid ways to attempt to beat the market. Anyone, such as Mr. O'Shaughnessy, who tries to validate his selection methodology by analysis deserves praise. The typical professional investor who validates his approach by emotional appeals or the mystique of professionalism deserves the underperformance that most of them have achieved. After reading this book and comparing the methods that most active portfolio managers use, it's very easy to understand how over 80% of them can't beat an index fund. They don't even know where to start.
(From quoting a guest reviewer USA)
Target readers:
Investors and people who are interested in the topic of investing.
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James P. O'Shaughnessy is the senior managing director and director of quantitative investments for Bear Stearns Asset Management. The former chairman and CEO of Netfolio, Inc., he has been featured in Barron's, Forbes, and other major financial publications
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The consistently bestselling What Works on Wall Street explores the investment strategies that have provided the best returns over the past 50 years - and which are the top performers today. The third edition of this BusinessWeek and New York Times bestseller contains more than 50 percent new material and is designed to help you reshape your investment strategies for both the postbubble market and the dramatically changed political landscape.
Packed with all-new charts, data, tables, and analyses, this updated classic allows you to directly compare popular stockpicking strategies and their results - creating a more comprehensive understanding of the intricate and often confusing investment process. Providing fresh insights into time-tested strategies, it examines:
- Value versus growth strategies
- P/E ratios versus price-to-sales
- Small-cap investing, seasonality, and more
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| View all 9 comments |
From publisher, USA
<2008-07-31 00:00>
For many investors, the stock market is little more than a guessing game. The stock market bubble of the late 1990s had many investors convinced that the rules of the game had changed and that this time, it really was different. What Works on Wall Street, Third Edition--with all new data through 2003-shows that it's never different this time. Armed with earlier editions of this book, investors would have avoided the devastation visited on the high risk stocks that were the favorites of investors during the bubble.
What Works on Wall Street, Third Edition, takes the guesswork out of your investment decision-making. This in-depth, updated and data-driven book looks at key strategies and benchmarks that millions of investors rely on to make their investment decisions, and tells you which of these tools have provided investors with the best long-term results.
Acclaimed author and portfolio manager James P. O'Shaughnessy presents factual, unbiased and unexpected findings that prove you can do vastly better than the market simply by consistently using stock selection strategies that have withstood the test of time. Moreover, these five decades of results warn investors to steer clear of some popular investment strategies that are toxic to your wealth.
Expanded to include how various investment strategies perform when used on All Stocks, Large Stocks, Market Leaders and Small Stocks, this new edition of the book also covers all the new research O'Shaughnessy has conducted since the last edition.
Which investment strategies are winners-and which are losers? What factors most reliably indicate that a stock will rise or fall? Are value strategies better than growth? Do small capitalization stocks do better than large? What's the worst-case scenario for the various investment strategies and how long did it take for them to recover? Do these strategies work outside the United States?
What Works on Wall Street answers these questions and outlines a methodical, scientific, and results-based method for making intelligent stock market decisions. "To make the best investment plans for the future, investors need access to unbiased, long-term performance results," O'Shaughnessy writes. And that is exactly what he gives you in this history-making book.
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From publisher, USA
<2008-07-31 00:00>
This consistently bestselling guide explores the investment strategies that have provided the best returns over the past 50 years-and which are the top performers today.
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From publisher, USA
<2008-07-31 00:00>
What Works on Wall Street was probably the most anticipated investment book of 1996. James O'Shaughnessy gained unprecedented access to Standard & Poor's Compustat database and back-tested the returns generated by various clearly defined investment approaches over the past 40 years. The book challenges quite a bit of the conventional wisdom about portfolio management and is a compelling, although statistically flawed, work.
In What Works on Wall Street, O'Shaughnessy examines the performance of the highest and lowest price/earnings, price/sales, price/book value, relative strength, yield and earnings growth stocks over various periods, trying to find which types of companies tended to perform best. Although you can quibble with a lot of the data, the sheer magnitude of the task O'Shaughnessy has undertaken is impressive. His final, multifactor strategies that generated the best investments over time are very interesting, particularly the Cornerstone Value approach, which is very similar to the Dow Dividend Approach with a few other bells and whistles.
O'Shaughnessy's book and its findings should be read, discussed and disputed by all investors. However much one can criticize the work for being too focused on the plight of professional money managers looking to pick fifty stocks and not individual investors looking to pick five, the information is valuable and compelling. The only warning that I would give to readers is to be aware of a methodological error in the way O'Shaughnessy does the statistics. Because of the time required, O'Shaughnessy and his team looked at how the 50 highest or lowest stocks in any particular group performed. Extrapolating the performance of extreme data points to the entire set of data being studied is not entirely correct, as there are many processes in nature where the middle actually does not act like the extremes. Mass and velocity in physics are one example, where super-light and super-dense objects both do not obey the laws of physics, while everything in between does. With this caveat, I think an investor can learn a lot from the book
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From publisher, USA
<2008-07-31 00:00>
What Works on Wall Street, Third Edition, cuts straight to the chase, examining actual historic performance figures to tell you which strategies have provided investors with the best returns, which should be avoided at all costs, and why. Comprehensively updated from its bestselling second edition, this investor classic goes beyond hype and rumor to focus on actual results, and tell you what smart investors are doing now.
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