Book Review: The Great Minds Of Investing

The Great Minds Of Investing – Book Review by David Merkel, CFA of The Aleph Blog

This is a difficult book to review. Let me tell you what it is not, and then let me tell you what it is more easily as a result.

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1) The book does not give you detailed biographies of the people that it features. Indeed, the writing on each person is less than the amount that Ken Fisher wrote in his book, 100 Minds That Made the Market. If you are looking for detailed biographical sketches, you will be disappointed.

2) The book does not give detailed and comparable reviews of the portfolio performance of those that it features. There's no way from what is written to tell really how good many of the investors are. I mean, I would want to see dollar-weighted rates of return, and perhaps, measures of dollar alpha. The truly best managers have expansive strategies that can perform well managing a large amount of money.

3) The book admits that the managers selected may not be the greatest, but are some of the “greats.” Okay, fair enough, but I would argue that a few of the managers don't deserve to be featured even as that if you review their dollar-weighted performance. A few of them showed that they did not pay adequate attention to margin of safety in the recent financial crisis, and lost a lot of money for people at the time that they should have been the most careful.

4) If you wanted to understand the strategies of the managers, this is not the book for you. They are not described, except in the broadest terms.

5) There is no integration of any common themes of what makes an investment manager great. You don't get a necklace; you just get a jar of pretty, non-comparable beads that don't have any holes in them.

What do you get in this book? You get beautiful black and white photos of 33 managers, and vignettes of each of them written by six authors. The author writes two-thirds of the vignettes.

Do I recommend this book? Yes, if you understand what it is good for. It is a well-done coffee table book on thick glossy paper, with truly beautiful photographs. It is well-suited for people waiting in a reception area, who want to read something light and short about several notable investment managers.

But if you are looking for anything involved in my five points above, you will not be satisfied by this book.

One final note on the side — I would have somehow reworked the layout of Bill Miller's photograph. Splitting his face down the middle of the gutter does not represent him to be the handsome guy that he is.

If you would like to buy it, you can buy it here: The Great Minds of Investing.

Full disclosure: I received a copy from the author. He was most helpful.

If you enter Amazon through my site, and you buy anything, I get a small commission. This is my main source of blog revenue. I prefer this to a “tip jar” because I want you to get something you want, rather than merely giving me a tip. Book reviews take time, particularly with the reading, which most book reviewers don't do in full, and I typically do. (When I don't, I mention that I scanned the book. Also, I never use the data that the PR flacks send out.)

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The Great Minds Of Investing

The Great Minds of Investing by William Green



About the Author

David Merkel
David J. Merkel, CFA, FSA — 2010-present, I am working on setting up my own equity asset management shop, tentatively called Aleph Investments. It is possible that I might do a joint venture with someone else if we can do more together than separately. From 2008-2010, I was the Chief Economist and Director of Research of Finacorp Securities. I did a many things for Finacorp, mainly research and analysis on a wide variety of fixed income and equity securities, and trading strategies. Until 2007, I was a senior investment analyst at Hovde Capital, responsible for analysis and valuation of investment opportunities for the FIP funds, particularly of companies in the insurance industry. I also managed the internal profit sharing and charitable endowment monies of the firm. From 2003-2007, I was a leading commentator at the investment website RealMoney.com. Back in 2003, after several years of correspondence, James Cramer invited me to write for the site, and I wrote for RealMoney on equity and bond portfolio management, macroeconomics, derivatives, quantitative strategies, insurance issues, corporate governance, etc. My specialty is looking at the interlinkages in the markets in order to understand individual markets better. I no longer contribute to RealMoney; I scaled it back because my work duties have gotten larger, and I began this blog to develop a distinct voice with a wider distribution. After three-plus year of operation, I believe I have achieved that. Prior to joining Hovde in 2003, I managed corporate bonds for Dwight Asset Management. In 1998, I joined the Mount Washington Investment Group as the Mortgage Bond and Asset Liability manager after working with Provident Mutual, AIG and Pacific Standard Life. My background as a life actuary has given me a different perspective on investing. How do you earn money without taking undue risk? How do you convey ideas about investing while showing a proper level of uncertainty on the likelihood of success? How do the various markets fit together, telling us us a broader story than any single piece? These are the themes that I will deal with in this blog. I hold bachelor’s and master’s degrees from Johns Hopkins University. In my spare time, I take care of our eight children with my wonderful wife Ruth.