A no-nonsense guide to disciplined investing, full of deep insights framed in compelling ways.
Investors should stop trying to beat the market and switch to passive index funds, according to Hebner’s incisive primer.
The author, CEO of Index Fund Advisors, Inc., and founder of the ifa.com investment website, takes aim at so-called active investors who believe that, by adroitly buying and selling stocks, or parking their money with a mutual fund that’s actively managed by a stock-picking guru, they can get higher-than-market returns. Hebner argues that actively managed funds deliver worse-than-market returns, especially after skimming off high fees; he asserts that individual investors cannot reliably decide which stocks will perform well in the future or predict when the market will turn up or down, and that the top fund managers over any given period are very likely to deliver lousy returns over the next period. The solution, he concludes, is to invest in passive index funds of the kind that IFA recommends, which try to mirror the market by using simple, transparent rules to decide when to buy or sell a security. The author backs his arguments with a mountain of research by Nobel Prize–winning economists and illustrates his points with reams of colorful tables and charts that lay out in gory, unarguable detail just how pointless the project of stock-picking is (one graph shows that newly fired fund managers, on average, get better returns at their next jobs than do the managers hired to replace them). Hebner makes complex issues of probability and risk lucid and intuitive, conveying his analysis in prose that’s street-smart (he likens active investors to gamblers addicted to trading and in need of a 12-step regimen) and deliciously tart: “Although a few managers will occasionally appear to have reliably delivered [above-benchmark returns]…the number of such managers is no higher than what we would have if all of them were monkeys throwing darts at the Wall Street Journal stock listings.” Color reproductions of Ragimov’s richly textured, finance-themed oil paintings make this the artiest of money books as well.
A no-nonsense guide to disciplined investing, full of deep insights framed in compelling ways.Pub Date: Dec. 19, 2023
ISBN: 9781955026932
Page Count: 401
Publisher: Ballast Books
Review Posted Online: Feb. 13, 2024
Kirkus Reviews Issue: May 1, 2024
Review Program: Kirkus Indie
Cogent, well-timed ideas for meeting today’s biggest challenges.
Helping liberals get out of their own way.
Klein, a New York Times columnist, and Thompson, an Atlantic staffer, lean to the left, but they aren’t interrogating the usual suspects. Aware that many conservatives have no interest in their opinions, the authors target their own side’s “pathologies.” Why do red states greenlight the kind of renewable energy projects that often languish in blue states? Why does liberal California have the nation’s most severe homelessness and housing affordability crises? One big reason: Liberal leadership has ensnared itself in a web of well-intentioned yet often onerous “goals, standards, and rules.” This “procedural kludge,” partially shaped by lawyers who pioneered a “democracy by lawsuit” strategy in the 1960s, threatens to stymie key breakthroughs. Consider the anti-pollution laws passed after World War II. In the decades since, homeowners’ groups in liberal locales have cited such statutes in lawsuits meant to stop new affordable housing. Today, these laws “block the clean energy projects” required to tackle climate change. Nuclear energy is “inarguably safer” than the fossil fuel variety, but because Washington doesn’t always “properly weigh risk,” it almost never builds new reactors. Meanwhile, technologies that may cure disease or slash the carbon footprint of cement production benefit from government support, but too often the grant process “rewards caution and punishes outsider thinking.” The authors call this style of governing “everything-bagel liberalism,” so named because of its many government mandates. Instead, they envision “a politics of abundance” that would remake travel, work, and health. This won’t happen without “changing the processes that make building and inventing so hard.” It’s time, then, to scrutinize everything from municipal zoning regulations to the paperwork requirements for scientists getting federal funding. The authors’ debut as a duo is very smart and eminently useful.
Cogent, well-timed ideas for meeting today’s biggest challenges.Pub Date: March 18, 2025
ISBN: 9781668023488
Page Count: 320
Publisher: Avid Reader Press
Review Posted Online: Jan. 16, 2025
Kirkus Reviews Issue: Feb. 15, 2025
BOOK REVIEW
PERSPECTIVES
Striking research showing the immense complexity of ordinary thought and revealing the identities of the gatekeepers in our...
A psychologist and Nobel Prize winner summarizes and synthesizes the recent decades of research on intuition and systematic thinking.
The author of several scholarly texts, Kahneman (Emeritus Psychology and Public Affairs/Princeton Univ.) now offers general readers not just the findings of psychological research but also a better understanding of how research questions arise and how scholars systematically frame and answer them. He begins with the distinction between System 1 and System 2 mental operations, the former referring to quick, automatic thought, the latter to more effortful, overt thinking. We rely heavily, writes, on System 1, resorting to the higher-energy System 2 only when we need or want to. Kahneman continually refers to System 2 as “lazy”: We don’t want to think rigorously about something. The author then explores the nuances of our two-system minds, showing how they perform in various situations. Psychological experiments have repeatedly revealed that our intuitions are generally wrong, that our assessments are based on biases and that our System 1 hates doubt and despises ambiguity. Kahneman largely avoids jargon; when he does use some (“heuristics,” for example), he argues that such terms really ought to join our everyday vocabulary. He reviews many fundamental concepts in psychology and statistics (regression to the mean, the narrative fallacy, the optimistic bias), showing how they relate to his overall concerns about how we think and why we make the decisions that we do. Some of the later chapters (dealing with risk-taking and statistics and probabilities) are denser than others (some readers may resent such demands on System 2!), but the passages that deal with the economic and political implications of the research are gripping.
Striking research showing the immense complexity of ordinary thought and revealing the identities of the gatekeepers in our minds.Pub Date: Nov. 1, 2011
ISBN: 978-0-374-27563-1
Page Count: 512
Publisher: Farrar, Straus and Giroux
Review Posted Online: Sept. 3, 2011
Kirkus Reviews Issue: Sept. 15, 2011
BOOK REVIEW
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