Winning The Loser’s Game: Timeless Strategies For Successful Investing, Eighth Edition
By Charles D. Ellis
Contents
Foreword by burton g. Malkiel ix
Preface xiii
1. The loser’s game 1
2. The winner’s game 11
3. The grim realities 17
4. Beating the market 23
5. Mr. Market and mr. Value 37
6. Investor’s dream team 43
7. Indexing: your “unfair” advantage 55
8. Investor risk and behavioral economics 63
9. The paradox haunting active investing 71
10. Time: archimedes’ lever 77
11. Investment returns 83
12. Investment risks versus uncertainty 93
13. Building investment portfolios 101
14. Whole-picture investing 105
15. More about bonds 109
16. Why policy matters 115
17. Playing to win 119
18. Challenges of performance Measurement 123
19. Active investing’s failures 135
20. Predicting the market—roughly 147
21. Individual investor decisions 151
22. Selecting mutual funds 165
23. Phooey on phees! 171
24. Lanning your play 179
25. Disaster again and again 195
26. Getting ok on your 401(k) plan 201
27. Your endgame 211
28. Thoughts for the wealthy 221
29. Good to go! 229
30. Parting thoughts 235
A. Investment committees and Good governance 237
B. Murder on the orient express 251
C. Recommended reading 261
Index 265
Preface
Lucky me! Married to a wonderful and inspiring woman, i was Born in the united states; privileged in education; blessed with Parents, children, and grandchildren i like, admire, and enjoy; And also blessed with an unusually wide global circle of friends in Investment management—an endlessly fascinating profession in a Remarkably favored business—replete with bright, engaged, and creative People.
Investing can seem way too complex, and investing wisely can Seem to take too much time. Most individuals are too busy to take The time to “learn all about it.” They and you have better things to do.
With increasing concern, i’ve seen the long-term professionalism that attracted me to investing get increasingly compromised by short-term commercialism and growing numbers of investors worrying about the uncertainties about how to manage investments for the long term. With all my advantages comes a clear responsibility to serve others. That’s why i wrote this book.
Over the past half century, the securities markets have changed massively and in many ways, creating an overwhelming problem for individual and professional investors. Those profound changes are explained in chapter 1, “the loser’s game.” Raised in a tradition that if you recognize a problem, you should look for a good solution, i’ve written this short book of straight talk. Each reader can understand the realities he or she faces and know how to take appropriate action to convert the usual loser’s game into a winner’s game in which every sensible investor can and should be a long-term winner.
As winston churchill so wisely observed, “people like winning Very much!” We all like winning with investments, and we all can win—at lower costs, less risk, and less time and effort if we can clarify our real objectives, develop sensible long-term policies, and stick with them so the markets’ fluctuations are working for us, not Against us.
In over 50 years of learning about investing from outstanding practitioners and expert theorists around the world, i’ve tried to collect, distill, and explain clearly and as plainly as possible the principles for successful investing. For both individual investors and institutional investors who have the necessary self-discipline and wish to avoid the loser’s game, the simple messages in this short book are now and will be the keys to success in the winner’s game of sensible investing
For the next 50 years. Companies change, and markets and economies go up and down— Sometimes a lot. But the core principles of successful investing never change—and never will. That’s why, when you’ve read this book, You’ll know all you really need to know to be successful in investing.
Charles d. Ellis
New haven, ct
March 2021