Synopses & Reviews
A new approach to investing based on how Wall Street insiders approach the market
The Indomitable Investor deconstructs the stock market as the public has come to know it and reconstitutes it from the inside out from the perspective of the fortunate few who dominate Wall Street. By revealing how top investors and traders think and act Steven Sears shows the stock market to be an undulating ocean of money, with seasoned investors reading the waves others cannot.
Teaching readers to think about the market in radically different ways, The Indomitable Investor shows how to improve returns—and, just as importantly, avoid losses—with disciplines deployed by people who almost always do exactly the opposite of what Wall Street says to do.
Laying bare great fallacies, the book explains that non-professional investors wrongly think the stock market is a place to make money, which is what Wall Street wants them to try to do. The Indomitable Investor says otherwise and shows how Wall Street's best investors have a completely different focus.
- Explains the critical ideas and insights of top traders and investors in language anyone can understand and implement
- Packed with material rarely shared off Wall Street that is used every day by professional investors
- Introduces the 17 most important words on Wall Street
- Teaches critical skills, including: How to increase returns by focusing on risk, not potential profits; how to use the stock market's historical patterns to optimize investment decisions; understanding key relationships between stocks and the economy that predict what will happen to stocks and the broader market; how to increase mutual fund returns with an easy adjustment that redirects the bulk of profits to you—not mutual fund companies, and how to analyze information like seasoned investors to move beyond "statement of the obvious" news reports that turn ordinary investors into Dumb Money
Accessible to readers of all backgrounds, including those with a limited understanding of investing, The Indomitable Investor will change how investors view the stock market, Wall Street, and themselves.
The Indomitable Investor
deconstructs the stock market that is perceived by the public, and reconstitutes it into the mosaic that is experienced by people who dominate the market. The book synthesizes critical ideas, insights, and experiences that forge the good trader quote. The material in the book is used every day by professional investors and by Wall Street’s banks to transfer the risk of investing to everyone else. Readers will learn key points, including:
- Why history repeats itself in the stock market, and how to break the eternal cycle of boom and bust that is the misery of almost all investors.
- Improve investment returns by learning habits and disciplines used by Wall Street’s top traders and investors.
- Increase investment returns by focusing on risk, not potential profits.
- Use the stock market’s historical patterns to calibrate and optimize investment decisions against Wall Street’s hidden calendar.
- Key relationships between stocks, indexes and commodities that telegraph what will happen to stocks, and the broader market.
The financial crisis of 2007 was a serious wake up call.
Most people realize they may never lead lives of financial ease, but now many live in fear of never even retiring. We must rethink how we approach investing—and even acknowledge we never understood it in the first place—before it is too late.
The stock market is here to stay and remains one of the few ways to truly grow your money in the long run. The Indomitable Investor: Why a Few Succeed in the Stock Market When Everyone Else Fails not only simplifies Wall Street's most complicated facts and ideas, but reveals the disciplines used by the few investors who consistently overpower the stock market.
Most people never own stocks long enough to qualify as long-term investors. They "greed in" to Wall Street's latest craze and "panic out" just as prices bottom. Deconstructing popular, often inaccurate portrayals of investing, The Indomitable Investor offers a fascinating look inside Wall Street's intellectual and operational machinery.
The Indomitable Investor applies an analytical, sometimes contrarian, approach to gathering and synthesizing fragmented facts long known by the best investors but unknown to almost everyone else.
Comprehensive and written in a lively, accessible style, The Indomitable Investor covers everything from buying and selling stocks intelligently to dealing with the market mob, behavioral finance, managing brokers, analyzing financial news, increasing mutual fund returns, and understanding how seasonality and economic cycles pace the market.
The Indomitable Investor is a compendium of insider knowledge. Ignore The Indomitable Investor at your own risk.
Praise for The Indomitable Investor
"Though he pulls no punches in his personal assessment of Washington and Wall Street, Steve Sears's blunt and harsh criticism is never merely gratuitous. On the contrary, The Indomitable Investor is a timely call to action for today's investor. The need for individuals to better understand and take greater control of their financial future has never been more important. The Indomitable Investor lays out the principles that guide successful investment strategies and maps out a disciplined approach that investors can use to navigate the challenges and meet their investment goals."
—William J. Brodsky, Chairman and CEO, Chicago Board Options Exchange
"Steve Sears provides an easy to understand, unbiased, accurate and, most importantly, truthful assessment of the investing landscape. This is a must-read book . . . a keep-you-honest dose of sage advice that, if taken, should go a long way toward maintaining a profitable mindset."
—Patrick A. Neal, CEO and CIO, TreePoint Capital Management
"Steve Sears is one of Wall Street's keenest observers. His book, The Indomitable Investor, is destined to become a classic. If you only read one book on investing, this is it."
—Meyer "Sandy" Frucher, Vice Chairman, NASDAQ OMX
About the Author
Steven M. Sears is a Senior Editor and columnist with Barron's and Barrons.com. He previously reported for Dow Jones Newswires and the Wall Street Journal. Mr. Sears has covered, or participated in, most major- modern financial events as a journalist or an executive at several major exchanges. He is a member of the Economic Club of New York.
Table of Contents
Chapter 1 Risk 1
A Nation of Stock Market Junkies 4
Calm Words for Wild Times 7
Chapter 2 Greed 13
The Hardest Decision 23
The Iron Man 24
Atlas Doesn’t Shrug 27
The Warrior Philosopher 28
Like Monkeys at the Zoo 30
A Context 32
The Danger of Warren Buffett 34
The Value of Errors 35
Chapter 3 Fear 37
The Theory of Contrary Opinion 42
Exile on Wall Street 44
The Media Is the Message 47
Media Misreads Google 49
Paulson’s Gamble 50
Buffett’s Goldman Trade 53
Fading the News 53
Chapter 4 The Anatomy of Information 55
The Doors of Perception 58
Anatomy of Information 60
The Future Is Now 63
Show Business 66
Words Are Weapons 68
Trust, but Verify 70
Chapter 5 Chaos 81
Money Never Sleeps 82
The Black Swan’s Calling Card 85
Map of the Market 86
Don’t Get Skewed 89
Apathy and Fear Are Your Friend 90
Fear Not Black Swans 91
Is MPT MIA or KIA? 92
800 Years of Crisis 97
Fear Gray Swans 98
Chapter 6 Diogenes’ Lantern 103
Performance Is Relative 106
Death by a Thousand Fees 107
Stockbroker Pay 111
Hidden Fees 116
Beware of New Products 116
An Uncomfortable Conversation 117
A Funny Aside 118
Suitability Requirement 119
Fiduciary Standard 120
Shakespeare’s Rule 121
Appeals to Common Sense 121
Trust but Verify 122
Active versus Passive Fund Management 125
Chapter 7 Cycles 127
The Year in Stocks 128
Mysterious Repetitions 136
Flash Mobs 137
History’s Hiccups 138
The Economy in Slow Motion 139
The Guts of ISM 141
Numerical Nuances 142
Says Who? Says Goldman Sachs 142
Chapter 8 Behavior 151
One Brain: Two Minds 152
Maps and Models 154
This Is Your Brain Visualizing Money 156
Compulsive Gambler 158
B. F. Skinner Goes to Wall Street 158
The Casino Culture 160
Your Own Private Stock Market 162
Often Wrong; Never in Doubt 163
Illusion of Memory 164
Safe Havens in the Age of Madoff 165
An Antidote for Overconfidence 170
Go Slow to Go Fast 172
Think Week 173
Halos and Angels 173
Big Brother Is Studying You 175
Big Bank Is Watching You 177
Ancient Lessons 178
Chapter 9 Watchman, What of the Night? 181
The Next Crash 183
Misperceptions and Illusions 184
Revolving Doors 185
Investor Laureate 186
A Fox in the Henhouse 187
The Tremendous Task 188
Sane Money, Not Mad Money 189
Repetition and Velocity 191
More Education 192
Plain Speaking 192
The Cause of Failure 193
A Systematic Change 196
Flash Crash 198
Soft Spots 199
A Global Problem 202
Present at the Creation 204
The Illusion of Regulation 205
The Balance of Power 208
About the Author 225
I must create a system, or be enslaved by another man’s.