Book mini review: The long and the short of it, John Kay

gadgetmind

This is really a book of two halves, so it seems only fitting that it should have two reviewers. I'm afraid that I'm going to have to speak on behalf of the other reviewer, and do some extrapolation of what they got from the book, because they are the previous owner. I have only their underlining and marginalia to work on, and as I bought the book from an online 2nd hand book store, I don't even know their name. Let's call them PO.

The foreword gives the first hint of this being two books when it says, "Some readers may prefer to turn immediately to Chapters 10 through 12, which are intended to offer practical advice for intelligent investors." OK, so the author supplies a caveat that in doing so they may miss potentially helpful background, but PO and myself aren't too sure.

The earlier chapters do give a lot of background of the history of investment, investment options, efficient market hypothesis, market psychology, risk versus return, and much more. It also does it in an informed, erudite, and often amusing way, and I read every word. OP turned down a few corners in these chapters, which I suspect was more of a stand-in for a bookmark rather than to return to them later suggesting the book was read in several sittings.

Then comes chapter 10. On page 169. After what I'd estimate as being about 60,000 words. Now comes a breathless blast though portfolio construction, savings versus spendings, the importance of low fees, asset allocation, contrarian investing, market timing, diversification, stock picking, and why the customers don't have yachts.

This is polished off in a mere 56 pages.

Don't get me wrong, it's good stuff, and PO clearly enjoyed it. No turned-down pages here, this was obviously read with glee and enthusiasm, and with pen in hand. Underlining abounds, and he (or she) clearly gets low-fees, pound-cost averaging, rebalancing, and all the other key concepts. They even found a reference to "...leveraged open-ended fund." as puzzling as I did and treated it to two question marks. One suspects Mr. Kay meant "unleveraged" and hats off the PO for spotting it.

My problem with this book is that chapters 1 to 9 have the pace and rhythm of an old grandfather clock in a gentleman's club, while chapters 10-12, the real take-away meat of the book, home deliver a coke-fueled concept fest.

Don't get me wrong, it's not a bad book, and well worth reading. But Tim Hale's Smarter Investing is much better paced, builds the arguments as a part of the practical advice, and gives the amateur investor a far more rigourous and useful framework with which to construct an investment plan and portfolio.

I bought this book second hand, and usually resell books that I will neither re-read nor refer back to. Due to the rather heavy penmanship in this one, I will instead donate it to the first person who PMs me. However, I would prefer that they instead spend their time reading Mr. Hale's work.

If you care to interpret this as me admitting that low fees aren't always the best, then so be it.

gmgmgm

I have Kay's book as well. Heartily recommended- I'd say it's intended as more of an intellectual introduction to the subject rather than a how-to guide like many of the more "mass-market" books e.g. Naked Trader. I haven't read Tim Hale's book.

If everyone read John Kay's book, this forum would be very very quiet.

gadgetmind

gmgmgm wrote: »

I'd say it's intended as more of an introduction to the subject rather than a how-to guide

I tend to agree but he claims it's both.

the more "mass-market" books e.g. Naked Trader.

I haven't read that one. I guess I should try and find a used copy but TBH my reading pile is starting to totter.

If everyone read John Kay's book, this forum would be very very quiet.

I agree but think that Smarter Investing covers more bases. My copy is a "keeper" and sports multi-coloured tags on the pages with the important tables.