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youngandthrifty does a review of the book "Smarter than the Street" by Gary Kaminsky.

Smarter Than the Street: Invest Money and Make Money in Any Market by Gary Kaminsky

Gary Kaminisky is a co-host for CNBC’s The Strategy Session and he recently wrote a book revealing the wealth-building secrets of wall street insiders.  I was excited to read this book because I enjoy reading about different strategies of that investors have up their sleeves.

This book was a very easy read, he writes in a very no-nonsense way with simple terminology that you can understand (I think that’s the key to any personal finance book that talk about investing in the stock market).  He talks about how the next decade is going to be a zero growth decade, and why the “buy and hold strategy” won’t work in our day and age.

He explains why buying mutual funds aren’t a good idea, and why investment analysts really don’t have your best interests at hand.  He basically says that fund managers have their hands tied most of the time, and that they aren’t out there to make a ton of money, they are only out there to beat the S&P500, and are satisfied even if they beat it by a minute amount.

Gary talks about change and that change can be good or bad, and how to see whether the change is good or bad in a stock (by keeping updated on news, changes with corporate structure etc.).  He looks about two companies and how they dealt with change over the many decades they have existed, including GE and Disney.

Gary shares with the reader how many stocks they should own, and that it doesn’t matter if you only have a $10,000 portfolio.  He talks about how discipline is most important with investing, and that you shouldn’t be afraid to sell your losers (in fact, he encourages it).  He says that we need to avoid the herd mentality and do the opposite of what everyone else is doing (I definitely agree with this).  He also shares with the reader on how to hedge against a bad market (by buying ultra short ETFs) and says that buying indexes is basically for losers (basically says that buying ETFs= no growth for many years).

I enjoyed reading the book and reading about the insider secrets of wall street (something that One Up on Wall Street’s Peter Lynch mentions) because it was easy to read, but I found that the information in the book wasn’t completely 100% concrete.  He talks about shorting stocks when the markets aren’t doing well.  I did like how he enunciates that your stock broker or financial advisor might not have your best interests at stake.  He mentions Suncor many times in the book as being one of the best stocks he has ever owned, and mentions a few other key stocks.  He basically says to check financial websites daily for news and information and to do your own diligence when selecting stocks.  All in all, I find this book useful for someone who hasn’t read their fair share of investing books.

Readers, have you read this book? What did you think of it?

Article comments

Lumbanted says:

This book sounds like and interesting read. i’m still a novice and though I lept without looking I’ve been lucky. Now i want to be skilled. Thanks for your site, it’s quite helpful

Janet says:

Good luck to me. 🙂 I just subscribed to your blog officially (even though it was already bookmarked). … Thanks Y&T for the giveaway!

young says:

@Janet- thanks! Good luck to you too!

Tiff says:

I just stumbled across your blog and it is fantastic – I just subscribed and can’t wait to read your next post!

thanks 🙂

young says:

@tiff- awe thanks! Good luck!

Kevin says:

Thanks for the opportunity. I have subscribed to your Blog via RSS (Google Reader). I do hope you mean that the draw date is Feb 11 2011 (not 2010 !). Rgds…

young says:

@Kevin- LOL thank you! I’ll change it now. I have a tendency to keep writing 2010 until at least March. 🙂

Paul says:

Hi I subscribe to you blog and would love to win the book

Paige says:

Omgoodness, I would love this book! I am so glad to have stumbled on a Canadian finance site!

Big E says:

easy to read = good. thanks!

I subscribe to Y&T. Def love the Canadian perspective.
Hope I win the book! Keep up the good work

young says:

@Adil @Big E @Paige- Thanks! Good luck 🙂

I don’t see much point to bonds and fixed income at today’s yields, but yes I would likely reduce the amount in equities. I’d probably still keep half or more in there even in my 40s and 50s, though.

MoneyCone says:

I haven’t read the book, but an interesting review!

Does the author give reasons as to why B&H won’t work? Sure it may not work for all stocks, but a complete dismissal is a little disconcerting.

young says:

@MoneyCone- A lot of “nouveau” type investing advice out there states that buy and hold doesn’t necessarily work. I believe they advocate for more buy and hold, and then hold until the price becomes too inflated and sell (even Buffett the guru of Buy and Hold sold his shares before the big crash). Though Buy and Hold will be more relevant for dividend investing of course 🙂 He claims that the markets, throughout history, have a big run up and a big crash (though 2008 was the big one). He basically states that it will just repeat itself in the next decade. Most share prices seem to have recovered about 75%-80% of what they were at before the big crash.

Oh, I’ve been subscribed since a very long time ago. I’ll also promote during my next roundup. 😛

I don’t agree that buying indexes is for losers. When it comes to the long-term, who cares if there’s one depressed decade? It’s a good thing, because it means you get to buy in at cheaper valuations. 🙂

As for the shorter-term, I think that energy is going to be a big mover, as well as commodities. This will be the name of the game until interest rates start rising dramatically, but Ben Bernanke and others are scared to death of the effects that may have on the “recovery”, so I don’t see it happening just yet.

young says:

@Invest It Wisely- Yeah I agree, but if you’re nearing your 40’s or 50’s, I would be cautious about the term “investing long term” 🙂 But that’s when you cash out and buy your bonds and fixed incomes, right? 😉

Addley says:

great blog

peg says:

I already subscribe to your blog.

I’m curious to read this book but also apprehensive because I am a firm “buy and hold” investor. This book seems completely opposite my strategy; maybe it’ll help me change?

young says:

@peg- Well he sort of mentions that “buy and hold” might not work anymore because many other people aren’t doing it, people get scared and sell…there’s so much investor psychology involved 🙁 He advocates that investors these days need to have a target- a get in, get out approach.

jjmclell says:

Just wanted to let you know I’m subscribed to your blog and would be very interested in reading this book. Thanks for doing this!

young says:

@jjmclell thanks! Good luck 🙂 I don’t need the clutter in my home anyways! Best to pass on the good karma 🙂

Christina says:

I am a subscriber!

Joel says:

I subscribe, and would be interested in reading the book.

Subscribed. Sounds like a great book.. from what you’ve said, I think I would tend to agree with most of what he is saying.

young says:

@Jaymus- Great thanks! Good luck Jaymus!

If I win the book, I will cuddle with it every night until the knowledge somehow seeps into my body.

Or maybe I’ll read it.

About time I’m being rewarded for subscribing. 😀

young says:

@Financial Uproar- After you finish cuddling it, you must put it under your pillow and wish for the Beat the Street fairy to come nightly for the remainder of 2011. Only then will you be awarded the book. 😉

Michael says:

Count me in!

This discussion of of a “no growth” decade makes me consider how my current dividend investing strategy fits in. If there is no growth in the stock price, but I am paid to hold the stock along the way, wouldn’t my total value actually grow?

I understand he probably talks about this at a higher level and my example above does not consider that the share price actually declined over time rather than staying level, but it got me thinking a little.

young says:

@Michael- Great- good luck! Yes, it does… that’s the good thing about dividend investing.. so if your share price decreases, you’ll still be paid dividends (unless they cut the dividend, and the stock prices tumbles some more- in the case of Manulife Financial recently). I think he means that these next few years will be a classic sideways market. We have seen this in January and the first part of last year. Up down, Up down… total rollercoaster. Only in September did we see huge increases that showed 52 week highs.

Taylor says:

Already subscribed.

There are so many different investment strategies. Lately it feels like a jumbled mess. I’m at that critical point where I know enough to feel like I know nothing at all.

young says:

@Taylor-Oh i know…! There’s Buy and Hold, Day Trading, Swing Trading, Dividend Investing, Value Investing… the list goes on and on!

Echo says:

Nice review. I agree with a few of the points in this book (don’t buy mutual funds, don’t blindly follow the index), but disagree with jumping in and out of different stocks.

It’s easy to say “don’t follow the herd” but most people don’t know what that means, since they’re likely in the herd.

I think the best approach is to find a strategy that works for you and to stick to it for the long term. Investment fads come and go, and all they do is sell books for their authors 🙂

young says:

@Echo- Agree! There were some points I really disagreed with… I guess my reaction shows that I am more into dividend investing rather than what he suggests.

Interesting comments he makes … I wonder how Couch Potato followers will react.
Anyhow, seems like an interesting read. I already follow your RSS but would like to be included in getting a chance to win this book!

young says:

@SPF- Yeah, he actually talks about trading ETF’s often in the book, from what I recall! Oh, of course you can be included! 🙂 My main goal is to reward youngandthrifty.ca readers 🙂 Good luck!

I am already skeptical when I hear the next 10 years will be a zero growth decade. Did he give any supporting reasons for this forecast?
I’m already a subscriber. 😉

young says:

@retirebyforty- Yeah, he does, but briefly. He talks about the past, about what happened in Japan. He basically is saying that between 2010 to 2020, it will look like 2000 to 2010. Where we had a huge dip in 2008-2009 and recovered a bit in 2010. Great retireby40, good luck! 🙂

I subscribe to your blog – would love to win another financial book.

young says:

@Steve Zussino- Great! Good luck!