A classic finance book by William Bernstein
"Portfolio Theory for Poets"
Now Available from McGraw-Hill
The Four Pillars of Investing, a journey to the heart of portfolio management, is aimed at the liberal-arts major seeking investment competence. Plenty of history and psychology, light on the math. ("Standard deviation" is mentioned only once, in a footnote.)
What have we learned from the meltdown? Find out in the 2010 postscript. If you decide to purchase the book at Amazon.com, make sure that you are getting the latest edition by buying it from this page; if you're buying it at a bookstore, you'll have to look carefully to make sure you're not getting the old 2002 edition. (The new edition, pictured above, has a red stripe at the top; the 2002 edition does not.)
McGraw-Hill continues to graciously allow us to post the Introduction and Chapter 1.
A quick tour of the table of contents appears below.
The Four Pillars of Investing:
Lessons for Building a Winning Portfolio
The Nature of the Beast
Chapter 1. No Guts, No Glory: Risk and return in the capital markets from the ancient world to Yahoo!
Chapter 2. Measuring the Beast: Where stock and bond returns really come from.
Chapter 3. The Market Is Smarter Than You Are: How to get on the good side of an 800-pound gorilla.
Chapter 4. The Perfect Portfolio: All right, you can’t have it. But you can get tolerably close.
When Markets Go Berserk
Chapter 5. Tops—A History of Manias: How you and your neighbors got snookered in the market’s oldest con game.
Chapter 6. Bottoms—The Agony and the Opportunity: When only your grandfather owns stocks.
The Analyst’s CouchChapter 7. Misbehavior: Meet the enemy, the face in the mirror.
Chapter 8. Behavioral Therapy: It hurts and it’s not easy. But it is the only chance you’ve got.
The Carny Barkers
Chapter 9. Your Broker Is Not Your Buddy: How Merrill Lynch and Smith Barney have their hands in your pocket.
Chapter 10. Neither Is Your Mutual Fund: The new opiate of the people.
Chapter 11. Oliver Stone Meets Wall Street: Bread and circuses for John Q. Investor.
The Winner’s Game
Chapter 12. Will You Have Enough? How to avoid a diet of Alpo and Little Friskies.
Chapter 13. Defining Your Mix: Asset allocation without microprocessors.
Chapter 14. Getting Started, Keeping It Going: Getting off the dime. Sailing through the rough patches.
2010 Postscript: What have we learned from the meltdown?
Copyright © 2010, William J. Bernstein. All rights reserved.