Tradestreaming’s Best Investment Book for 2011: Laughing at Wall Street
I hate to say this but most investment books suck (minus Tradestreaming, of course :-)) But seriously, books that try to teach something valuable about investing frequently miss their marks not because they're poorly written (some are) or lack good research (some do). There's a problem in trying to distill the process down to a how-to approach, to a magic formula. Investing is a unfurling learning process and one that can be personalized to the investor. It's hard to create a one-size-fits-all, get-rich-trying investment strategy that distills down so easily to a 250-page book.
Laughing at Wall Street: The best investing book for 2011Of all the books I've read this year (and I read many, many of them for my podcast, Tradestreaming Radio), I thought Chris Camillo's Laughing at Wall Street: How I Beat the Pros at Investing (By Reading Tabloids, Shopping at the Mall, and Connecting on Facebook) and How You Can, Too deserved top honors. What I liked about Laughing at Wall Street
- forge your own approach: I liked that Chris took a skeptical view of buy-and-hold and traditional asset management rules for that matter. He created his own system of stock picking (well-researched, concentrated positions) that worked for him. I know many have compared LAWS to Peter Lynch's buy-what-you-know strategy and it's similar. But it has more of an event driven strategy -- meaning, buy what you know but make sure there is a catalyst that should move the stock price in the near future.
- social tools, powerful research: To vet his investment ideas, Chris turns to his social network and beyond to validate or disprove his thesis. That's what hedge funds do, that's why entrepreneurial investors should do as well. It's so easy to find experts in certain fields -- identify them and use them. Twitter and Facebook are great for that.
- Observer of trends: Chris credits his ability to see things that not everyone is looking at. That's important -- to make money stock picking, you've either got to do better research on stocks other people are looking at or find stocks no one's looking at. Chris chooses the former and practically rides them as his thesis plays out. Then he's on to the next one.
- bold claims: I don't dispute Chris's claim that he turned $20k into $2 million. Listen, it sells books and if you use leveraged investments (options), you can do it. It's just overly promotional and hype-y.
- replicability?: If investing is a personalized process, any book that defines a workable solution isn't right for everyone. I'm not sure Camillo's approach can be implemented by most people -- many who lack his keen sense of trendwatching.
- light on facts, process: While Chris does a good job describing his process with stories, I was left wanting more about how his actual portfolio functions, what it looked like over the years, and more color on some of his smaller trades and the ones that didn't work out as well.