Author: Paul Mladjenovic
Publisher: Wiley Publishing, Inc.
Reviewer: Goke Ilesanmi
Paul Mladjenovic, author of this text is a certified financial planner (CFP), consultant, writer and public speaker who has been helping people with financial and business concerns since 1981. Mladjenovic achieved his CFP designation in 1985 and his B.A. degree from Seton Hall University in 1981. He is also the author of “The Unofficial Guide to Picking Stocks and Zero-Cost Marketing”.
According to this author, stock investing is a great topic that is fascinating. Mladjenovic says although the stock market has served millions of investors for nearly a century, recent years have shown him that a great investing vehicle such as stocks can be easily misunderstood, misused and even abused. He educates that the great bull market of 1982 to 1999 came to a screeching halt in 2000. Mladjenovic adds that during 2000 and 2001, millions of investors lost a total of $5 trillion, stressing that what borders him is that much of that loss was easily avoidable. This consultant says investors at the tail end of a bull market often think that stock investing is an easy, carefree, mindless way to make a quick fortune.
Mladjenovic reveals that countless stories of investors who lost tremendous amounts of money speculating in tech stocks, dot-coms and other flashy stocks are lessons for all of us. According to this expert, successful stock investing takes diligent work and knowledge like any other meaningful pursuit. He says this definitely helps you to avoid the mistakes others have made and can point you in the right direction.
Structurally, this text is segmented into five parts of 24 chapters. Part one is generically christened “The essentials of stock investing” and contains five chapters. Chapter one is entitled “Exploring the basics”. In the words of Mladjenovic here, “Stock investing became all the rage during the 1990s. Investors watched their stock portfolios and mutual funds skyrocket as the stock market experienced an 18-year rising market (or bull market). Investment activity in the United States is a great example of the popularity that stocks experienced during that time period….”
This author adds that the stock market is a market of stocks and a market like any other market. “The stock market is an established market where people (investors) can freely buy and sell stocks because they seek gain in the form of appreciation…or income…or both,” educates Mladjenovic.
Other concepts discussed in this chapter are how to understand why private companies go public; exploration of the initial public offerings; discovery of different kinds of stocks; and finding your way to successful stock investing.
Chapter two is based on the subject matter of taking stock of your financial situation and goals. According to this expert here, “Investing in stocks requires balance. Investors sometimes tie up too much money in stocks and therefore put themselves at risk of losing a significant portion of their wealth should the market plunge. Then again, other investors place little or no money in stocks and therefore miss out on excellent opportunities to grow their wealth. Stocks should be a part of most investors’ portfolios, but the operative word is part. Stocks should take up only a portion of your money. A disciplined investor also has money in bank accounts, bonds, mutual funds and other assets that offer growth or income opportunities. Diversing risk.” This author also teaches you how to prepare your personal balance sheet; looking at your cash flow statement; and determining your financial goals.
In chapters three to five, Mladjenovic discusses concepts such as defining common approaches to stock investing; recognising the risks and getting a snapshot of the market.
Part two is summarily woven together as “Before you get started” and covers four chapters, that is, chapters six to nine. Chapter six has the thematic focus of gathering information. In the words of this author here, “Knowledge and information are two critical factors in stock investing…People who plunge headlong into stocks without sufficient knowledge of the market in general, and current information in particular, quickly learn the lesson of the eager diver who didn’t find out ahead of time that the pool was only an inch… In their haste to avoid missing so-called golden investment, investors too often end up losing money….”
In chapters seven to nine, Mladjenovic analytically X-rays concepts such as going for brokers; investing for growth; and investing for income.
Part three is based on the eclectic subject matter of picking winners, and contains four chapters, that is, chapters ten to 13. Chapter ten is entitled “Running the numbers: Using basic accounting to choose winning stocks”. Here, Mladjenovic says, “Stock picking can seem like a combination of art, luck, timing, and science. It may seem like there is rhyme or reason to it. When you turn to the so-called experts, you get all sorts of opinions, which frequently are contradictory… The most tried-and-true method for picking a good stock starts with picking a good company. Don’t rely on luck to help you pick good stocks; good old-fashioned homework, research, and common sense are your best diagnostic tools….”
In chapters 11 to 13, this expert discusses concepts such as decoding company documents; analysing industries; and money, mayhem, and votes.
Part four is generally tagged “Investment strategies and tactics” and covers six chapters, that is, chapters 14 to 19. Chapter 14 is entitled “Taking the bull (or bear) by the horns”. According to Mladjenovic here, “Understanding the investment environment may even be more important to your wealth-building success than choosing the right stock…Bull and bear markets have a tremendous effect on your stock choices….”
Chapters 15 to 19 are based on the subject matters of choosing a strategy that is right for you; stopping in the name of money; getting a handle on DPPs, DRPs and PDQ; looking at what the insiders do; and tax benefits and obligations.
Part five generically focuses on the part of tens and covers five chapters, that is, chapters 20 to 24. Chapter 20 is entitled “Ten things to think about before you invest”. According to Mladjenovic here, “Before you invest in anything, you first must make sure that you have a strong economic foundation…A second prerequisite to investing is a complete understanding of the types on investments that are appropriate for your current situation in life…Finally, you must take the time to educate yourself about financial and investment matters….”
In chapters 21 to 24, this expert beams his analytical searchlight on concepts such as ten things to remember after you invest; ten signals of a stock price increase; ten warning signs of a stock’s decline and ten ways to protect yourself from fraud.
As regards style, one thing that works for this text is the simplicity of language. There is the use of graphical embroidery, especially cartoons, to achieve visual reinforcement of readers’ understanding and soften otherwise too much seriousness of the concepts.
However, even though the title is meant to communicate the depth of research and didactic prowess of the text, it somehow sounds derogatory. Probably it should have been “Stock Investing Simplified”.
On the whole, this text is fantastic. It is a must-read for anybody that wants to create wealth through stock investing.
GOKE ILESANMI, Editor-in-Chief/CEO of https://www.gokeilesanmi.com.ng and Managing Consultant/CEO of Gokmar Communication Consulting, is a Certified Public Speaker/Emcee, (Business) Communication Specialist, Motivational Speaker, Career Management Coach, Renowned Book Reviewer, Corporate Leadership Expert and Editorial Consultant.
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