Winning The Loser’s Game is written by Charles D. Ellis. Ellis is on the Board of Directors at Vanguard, which more than hints at his investment strategy in his book. Winning The Losers Game is another book that stresses the benefits of index investing over a long time horizon.
The title is based off a theory from Dr. Simon Ramo that expert tennis players win matches while amateur tennis players lose matches. While the game is the same, it’s played differently. While one game is determined by the winner the other is determined by the loser. The majority of institutional investors do not beat the market, because of this Ellis considers it to be a loser’s game. To win, you just need to not make the same mistakes that the others do.
One of my favorite chapters in the book shows how you can predict the market roughly, not accurately. Be this he means you can look at price/earnings ratios or dividend yields and realize when they are either too high or too low and act accordingly before they revert to their mean value.
In this recently released fifth edition, Ellis has comments on the events of 2008 and early 2009. He points out that losses relating to the Bernie Madoff Ponzi scheme or Iceland’s financial collapse were permanent but the market crash in 2008 is temporary and will recover. Only those that sell during the crash miss any chance for recovery and make their loss permanent.
While I personally prefer the detail provided by previously reviewed books like The Four Pillars of Investing and Stocks for the Long Run, Winning The Loser’s Game might be a better for those who want an easier read and do not want to delve into as many charts and graphs.
What else do these three books have in common? They are all being given away this month to three lucky winners! Check back on November 10th for details!
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Tom Drake is the owner and head writer of Canadian Finance Blog.
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Bonus – more books! (even though I didn’t win the baby ones……these would make a great gift for my husband, who also really likes this stuff!
This sounds like an interesting read.
It is always great to know how to speculate where the market is at right now.
Great info and straight to the point. I don’t know if this is actually the best place to ask but do you folks have any thoughts on where to get some professional writers? Thanks in advance
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