The Ken Fisher Classics Collection

Kenneth L. Fisher

• Publisher: Wiley
• Year: 2012
• Print ISBN:
  9781118403570
• Edition: 1
• eBook ISBN:
  9781118403594
• Topic: Business
• Subtopic: Finance
• Index: Business

Three of Ken Fisher's bestselling books in one handy e-book

When it comes to finance and investing, there may be no name as big as Ken Fisher's. A long-time columnist at Forbes magazine and CEO of Fisher Investments, every one of his books has appeared on both the Wall Street Journal and New York Times bestseller lists. In this new e-book bundle, you'll get the best of Fisher with three of his most acclaimed titles in one convenient package.

• In The Only Three Questions That Count, Fisher shows investors how to improve their investing success by answering three simple questions
• In Debunkery, Fisher helps investors how to avoid the costly mistakes that happen when people rely on "common sense" and standard investing cliches
• In Markets Never Forget (But People Do), Fisher explains why investors' memories so often fail them and how to use the history of markets to avoid repeating the same investing mistakes

For investors, fans of Fisher, and anyone who cares about their money, the Ken Fisher Classics Collection offers three volumes of proven advice from an investing legend.

CONTENTS

Preface

Acknowledgments

Chapter 1: Question One: What Do you Believe that is Actually False?

If you Knew it was Wrong, you Wouldn’t BelieveIt

The Mythological Correlation

Always Look at it Differently

When you Are Really, Really Wrong

Chapter 2: Question Two: What Can you Fathom that Others Find Unfathomable?

Fathoming the Unfathomable

Ignore the Rock in the Bushes

Discounting the Media Machine and Advanced Fad Avoidance

The Shocking Truth About Yield Curves

What the Yield Curve is Trying to Tell you

The Presidential Term Cycle

Chapter 3: Question Three: What the Heck is My Brain Doing to Blindside Me Now?

It’s Not Your Fault—Blame Evolution

Cracking the Stone Age Code—Pride and Regret

The Great Humiliator’s Favorite Tricks

Get Your Head Out of the Cave

Chapter 4: Capital Markets Technology

Building and Putting Capital Markets Technology Into Practice

It’s Good While it Lasts

Forecast With Accuracy, Not Like a Professional

Better Living Through Global Benchmarking

Chapter 5: When There’s No There, There!

Johns Hopkins, My Grampa, Life Lessons and Pulling a Gertrude

In the Center Ring—Oil Versus Stocks

Sell in May Because the January Effect Will Dampen Your Santa Claus Rally Unless There is a Witching Effect

Chapter 6: No, It’s Just The Opposite

When you Are Wrong—Really, Really, Really Wrong

Multiplier Effects and the Heroin-Addicted iPod Borrower

Let’s Trade This Deficit for that One

The New Gold Standard

Chapter 7: Shocking But True

Supply and Demand . . . and That’s It

Weak Dollar, Strong Dollar—What Does it Matter?

Chapter 8: The Great Humiliator and Your Stone Age Brain

That Predictable Market

Anatomy of a Bubble

Some Basic Bear Rules

What Causes a Bear Market?

Chapter 9: Putting it All Together

Stick With Your Strategy and Stick it to Him

Four Rules that Count

Finally! How to Pick Stocks that Only Win

When the Heck Do you Sell?

Conclusion

Appendix A

Appendix B

Appendix C

Appendix D

Appendix E

Appendix F

Appendix G

Appendix H

Appendix I

About the Authors

Index

Copyright © 2012 by Fisher Investments. All rights reserved.

This book is a revised edition of The Only Three Questions That Still Count: Investing By Knowing What Others Don’t published by John Wiley & Sons, Inc., 2007

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

Published simultaneously in Canada.

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Important Disclaimers: This book reflects personal opinions, viewpoints and analyses of the authors and should not be regarded as a description of advisory services provided by Fisher Investments or performance returns of any Fisher Investments client. Fisher Investments manages its clients’ accounts using a variety of investment techniques and strategies not necessarily discussed in this book. Nothing in this book constitutes investment advice or any recommendation with respect to a particular country, sector, industry, security or portfolio of securities. All information is impersonal and not tailored to the circumstances or investment needs of any specific person.

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ISBN 978-1-118-11508-4; ISBN 978-1-118-22421-2 (ebk); ISBN 978-1-118-23755-7 (ebk); ISBN 978-1-118-26246-7 (ebk)

PREFACE

Who Am I to Tell You Something That Counts?

Who am I to tell you anything, much less anything that counts? Or that there are only three questions that count and I know what they are? Why should you bother reading any of this? Why listen to me at all?

As I update this book in 2011 for its second edition, I’ve been in the investment industry for nearly 40 years. I founded and am CEO of what is among the world’s largest independent discretionary money management firms, serving tens of thousands of high net worth individuals and an impressive roster of institutions—major corporate and public pension plans and endowments and foundations—spanning the globe. I’ve written Forbes’s “Portfolio Strategy” column for over 27 years, making me the fourth longest-running columnist in Forbes’s long history. I write regular columns in Britain and Germany. And now, I’ve written eight books, five of which (including this one) were national bestsellers. Along the way, and without really aiming at it, I made the Forbes 400 list of richest Americans.

That’s a lot for one lifetime and one professional career. But I’m here to tell you the prime cumulative lesson of my long career is when it comes to investing, there are only three questions that count. And my view on that hasn’t changed since I first penned this book.

In reality, there really is only one question that counts. Or, at least, only one question that really counts. But I don’t know how to express that one question in a way you can easily use for everyday investing decisions. If broken down into three subparts, I know how.

And what is that only question that counts? Finance theory is quite clear the only rational basis for placing a market bet is if you believe somehow, some way, you know something others don’t know. The only question that counts is: What do you know that others don’t?

Most people don’t know anything others don’t. Most folks don’t think they’re supposed to know something others don’t. We’ll see why. But saying you must know something others don’t isn’t at all novel. Pretty much everyone who took a basic college investment class was told this, although most people conveniently forget this truism.

Without answering the question—what do you know that others don’t—investing with an aim to do as well or better than the market is futile. I’ll say that another way. Markets are pretty efficient at pricing all currently known information into today’s prices. There is nothing new about that statement. It’s an established pillar of finance theory and has been repeatedly verified over the decades. If you make market decisions based on the same information others have (or have access to), you will overall fail relative to what the markets would have rendered you on their own without any decision making on your part. If you try to outguess where the market will go or what sectors will lead and lag or what stock to buy based on what you read in newspapers or chatter about with your friends and peers—it doesn’t matter how smart or well trained you are—you will sometimes be right or lucky or both, but likely more often wrong or unlucky or both, and overall do worse than if you didn’t make such bets at all.

I bet you hate hearing that. But I already told you I didn’t know how to express that truism as a single question in a way useful to you. What I can do is show you how to know things other people don’t know.

Polling for Perfect Truth

Why is knowing something others don’t so important? Financial markets are “discounters” of widely known information—whatever information we commonly have access to has already been reflected in today’s prices before we can articulate our knowledge of it. See it this way—compare markets to political elections that aren’t discounters of known information.

You know professional pollsters can build a sample of about 1,000 people sufficiently representative of America’s voters to foresee the immediate outcome of a national election within a predictable few percentage points. That technology is mature and time-tested. You’re quite used to it. When a professional poll is done the night before the election, we know w...

Table of contents

• Cover
• Title
• Contents
• Foreword
• The Only Three Questions that Still Count
• Debunkery
• Markets Never Forget (But People Do)