Well, a book on investing on shares by a Forbes columnist who has more experience than my professional age? Could be interesting, don’t you think?
And indeed it was. Ken Fisher writes in a somehow difficult manner. He sidetracks with his three questions back and forth on the same subject. And repeats quite obsessively some of his ideas in the 400+ pages of this project. But at the end of the day I found “The only 3 questions you need to ask” informing and well documented. And full of (arguably) useful insights on shares investing.
What is the book about?
Well, about investing in shares and about how you can sustainably beat the markets. Ken Fisher’s book philosophy is very similar to the one laid out in the Turtle Investor’s” book. You have to choose a well-built benchmark and stick to your strategy – and you will beat the benchmark at the end of a longer period. So forget about day-trading or volatile forex markets – Ken Fisher does not want to even think about it. He says that short term trading eats up a lot from the yield with commissions and is very risky. Risky means for Fisher that you do not control that market and that you must be lucky to get big revenues in those manners. Fair enough – I read about that complaint in most of the trading books I reviewed lately and the technical analysts keep repeating this mantra – day trading must be done with a system and needs discipline. Which Fisher rejects, but after all he talks about different things.
“The only 3 questions you need to ask” is a long and complex book. It covers many aspects of the investing and it is not something you will manage to read and apply after a quiet weekend reading. In this respect, Fisher distills here a lot of trading experience. What I also liked was that Fisher combines very well the analytical tools with a good knowledge of the common investor’s
Some of the reviews, such as the one of Steven Rosales from seekingalpha.com, seem to think very apologetically about this book. Rosales says that the book is extremely god since it rejects some of the common mis-conceptions about investing. An important one is that “investing is a craft”. And here I have to agree – many people and even other investing blogs say that investing is an art. Well, here I agree with Ken Fisher – investing is not a craft or an art, investing is based on hard facts and one must abide by several rules and facts in order to get a successful result. Otherwise, Fisher states it plainly – getting good results is a matter of luck only. And nobody want to make money just out of luck.
Some others look at the book as being very cryptic. It is true that it gets very complicated sometimes and that you have to come back to several pages again and again to get their true meaning (especially when you read it as I did, late in the night before falling asleep). But Ken Fisher is an investing professional and one must think that he did not write a book of 400+ pages just to repeat the old wisdom. And the book requires indeed some pre-requisite investing knowledge (without abusing his expert power, of course). So I would say it adds some value for those who know how to use it…
Some other reviewers (e.g. Jae Jun) say that the book is “utterly rubbish”. They said that it was not very helpful in behavioral finance. Well, maybe for the experienced investors or for those who disagree with the author. I found that Ken Fisher explains quite well some investing psychology from the common masses on the stock market – and does this in a trailing manner. Fisher basically asks the only 3 questions that count in a context of behavioral investing – and actually explains quite well why the analyst consensus cant’ be any close to the markets, or why investors fail to buy or sell otherwise than with the worst timing (at least most of them). So again a disagreement here with the book reviewer – I found it quite informing from this perspective.