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The Art of Execution by Lee Freeman-Shor – 5 Stars

The full title of this book by Lee Freeman-Shor is

The Art of Execution: How the world’s best investors get it wrong and still make millions in the markets“.

In my review on Amazon.co.uk, I rated this book at the Five Stars level. This means I think it is Excellent.

Here is my book review.

This will change the way you invest (if you’re sensible)

This is a must read book for anyone who invests in the stock exchange by buying individual shares.

Based on the experience of running a Best Ideas unit trust where well known investors were given a large amount of money to invest in a small number of companies. He saw some live up to their big reputations but others stumbled badly so he started to investigate why by looking at their investments and their trading habits.

At its core, there are three things that determine success
1 the proportion of winners to losers
2 what you do when an investment is losing money.
3 what you do when an investment is making money.

Do 2 and 3 the right way and you can succeed even if you’re not so good at the first.

The rules are simple and, when you know them, basic common sense. What gets in the way are a lot of emotions that make it hard to do what you should do.

I don’t generally invest in shares but in ETFs and unit trusts. The proportion of fund managers who beat the market is low which is why it is often recommended to invest in low cost index trackers.

This book suggests that fund managers who have relatively consistent past records are not “just lucky” but have learnt how to execute well and probably use investment rules to help them avoid the emotional reactions that cause people to lose money. It’s helped me to think about why a fund manager is successful. ON this basis, I think it’s worth reading if you’re like me and don’t invest directly in company shares.

The author admits that many professional investors will read the book but not amend their habits because they have confidence that they know best. Don’t think the same. Once you develop these good habits over winners and losers, you can then focus more time learning how to pick more winners than losers.

It is available to buy from Amazon.co.uk and Amazon.com.


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