anne-richard
» » What Works on Wall Street: A Guide to the Best-Performing Investment Strategies of All Time

Download What Works on Wall Street: A Guide to the Best-Performing Investment Strategies of All Time epub

by James P. O'Shaughnessy




Download What Works on Wall Street: A Guide to the Best-Performing Investment Strategies of All Time epub
ISBN: 0071371087
ISBN13: 978-0071371087
Category: Business
Subcategory: Investing
Author: James P. O'Shaughnessy
Publisher: McGraw-Hill (February 2001)
ePUB size: 1977 kb
FB2 size: 1258 kb
Rating: 4.9
Votes: 152
Other Formats: lit txt azw lrf

Qutalan
This is the rare 5 star ***** book. It is no nonsense and gives you exactly what its title suggests. It shows what has really worked on Wall Street from 1951 to 1996 by using the Standard and Poors compustat data base to simulate what would have happened if an investor (or mutual fund) would have bought the top 50 stocks meeting the criteria measurement. Example: Highest P/E ratios, top 50 price increases, top 50 price decreases, best dividends, high or low book to price value, etc.He goes further by breaking the top 50 into only the large cap meeting this criteria and if he bought out of all stocks available. He measures stocks and their performance from almost every imaginable angle. It is fascinating and educational to see what the final dollar amount is for each investment approach. He also shows how each style performed in each decade and how each percentile of stock did in each category.(Example: how the top 5 stocks did with low P/E's versus the bottom 5 in the top 50 stock group, this helps the individual stock investor focus his investments).

Here are the books big findings. If you took $10,000 and invested it in 1951 and invested it in the following top 50 stocks that met the following criteria, while resetting it every year to match your criteria, in 1996 you would have had:

Top 3 ways to invest

PSR<1,high relative strength,All stocks $12,999,698

Earnings yield>5,High relative strength,All stocks $12,570,451

Price/Book<1,High relative strength,all stocks $12,552,352

Worst 3 ways to invest

Lowest 1-year relative strength, All stocks $29,666

High PSR, All stocks $64,220

High Pcfl,All Stocks $224,741

I really like this book because It is scientific, not opionated and shows that Warren Buffet was right all a long, buy stocks that are a great value based on their sales, and price to book with low P/E's and strong relative price strength and you will always win in the long term.
Urllet
I must recant my earlier 1-star review. While Mr. O's career switches - fund manager to Netfolio back to fund manger -- are still anything but encouraging, one of his stock picking methods is currently working. I discovered this by looking at the portfolio of one of the funds he started. Basically, it's the stuff I own and it's doing better than the averages. (In fact, it's doing better than any fund group except gold and bear market funds.) O'Shaughnessy offers several methods for stock selection based on his analysis of several decades of data.

The statistical work may be flawed as others have said but his methods are making money! (In this bear market, that is quite a boast.) His challenges of well-known methods that don't work may be even more relevant. (First rule of investing -- don't lose money.)
Onnell
This book has born out its wisdom. The two funds that are patented that fool his strategy have been phenomenal. HFCGX is the patented fund based on his top idea of Cornerstone Growth; over the last 5 years it has had an average return of 13.44% per year vs. the Vanguard 500's -2.01% per year (6/1/00 through 5/31/05). HFCVX is the patented fund based on his 2nd to best idea of Cornerstone Value; over the last 5 years it has had an average return of 6.47% per year vs. the Vanguard 500's -2.01% per year (6/1/00 through 5/31/05). The most interesting point is that the author points out that investors often are to emotionally involved to have the discipline to see the strategy through. Not only did the first reviewer bash the book because he did like the returns strategy one year after the book came out, but Mr. O'Shaughnessy sold the funds to Hennessy Funds at the end of 1999 after it failed to surpass the returns of the bubble that soon after collapsed. Seven years after it was published an investor would be much wealthier had they followed the books top strategy instead of the investors who dogpiled onto the stocks of the market's bubble. THIS BOOK is my all time #1 resource for stock investing. Five Stars.
Whitebeard
This book was definately the result of many hours of crunching data and formulating convictions about it. I believe that the author could have had some help with the statistics behind his endeavor. You really have to question his understanding of statistics. The format of the book was weak. About two pages of text per 20 graphs that restate the text for when your eyes get tired of trying to read the words. There is some value in reading this book, hence the two stars. You will realize somewhat of a strategy, but because of his fishy smelling data and conclusions, I would steer clear.