Sunday, 27 April 2014

Invest Lah! The Average Joe's Guide To Investing (Ser Jing, Sudhan, Wei Lin)

This book, written by three young authors, is aimed at beginners in the local market.The book is focused on the fundamental aspect of investing. The book is divided into a few sections: 1. General introduction, 2. How to pick companies from a fundamental viewpoint, further divided into looking at a company's numbers, situation, and the investor's mindset, 3. Case studies from SGX, 4. The authors' own mistakes and 5. Investing admin in relation to SGX and ETF's.

The book itself has a very attractive cover and the text is in large font which makes the book very user-friendly. The topics are well organised and although there are some formulas and numbers, it is not so heavy as to scare away beginners. Every effort has been spent by the authors to liven up the book with their own amusing comments and opinions.

In the numbers section of the book, key ratios are focused on. Strangely, the authors decided to put the study of the balance sheet and related statements into the appendix, probably due to the more complex nature of the information. I particularly liked their sections on the administrative details (including brokers, SGX symbols, etc) of investing in the local markets, which will be very helpful to newbies. Also not commonly seen in other books is their write-up on behavioural finance (including loss aversion, availability bias, etc, which can drive an investor's actions). There is even a section on financial budgeting. The book's strength is also its weakness; everything is given in bite-sized portions. For a real newbie with zero knowledge, this book packs just enough information but not too much that it overwhelms a new reader. The book is fairly easy to digest. On the flip side, everything seems to be touch-and-go and feels more like a quick summary of what is covered in other books.  I do not think that this book covers everything, and neither is it the fault of the authors; fundamental investing itself is too large a field. For a beginner's book, it also misses out on explaining some abbreviations for the uninitiated. A personal peeve is that the book is too chirpy and positive, but that is just me.

The book is a valiant attempt by the authors to try to introduce as much as necessary to a layman. To me, the book covers a good breadth and should point the way further for new investors. This really is a good book for beginners and it doesn't seem too dry to me, but I feel that it does not add too much value to people who have some knowledge of the markets.

Found in NLB: Yes
Recommended: Yes