Bests & Worsts Reviews from Amazon

I never heard of Town until a few weeks ago when my wife saw him on a panel of mostly investment people on CNBC. I watched the show for a while, and I almost fell out of my chair when Town promised 15% returns on national TV. As a Registered Investment Adviser, I find it hard to believe the SEC would allow him to make this claim. The 70-year historic return of the S&P 500 is between 10 and 11%. If one believes that future returns will be like past returns......and this is a big if.....one could bump up your portfolio return by utilizing small cap value stocks (Fama-French 3-factor study), foreign stocks, and REIT's.....but you would still not achieve a 15% return. I am a big fan of index funds. Every study I have seen shows that index funds outperform actively managed approaches over long periods of time. The few people that have beaten the S&P 500 over long periods of time can be counted on one hand (Lynch, Buffett) and Lynch did not do it for 30 years either. Out of curiosity, I picked up his book. I started laughing when I read it.....because he was replaying the 1930's strategy of Benjamin Graham....try to identify companies that are worth $1 but are selling for $0.50......then sell them when they rise to $1.00. I have no issue with the Benjamin Graham approach......but it is a lot of work....certainly more than 15 minutes a week that Town espouses....and even Graham himself said on his deathbed that his value approach no longer seemed to work as well as it did in back in the 1930's. Many years ago, I looked at several companies, and tried to calculate the intrinsic value of their stock. The idea is that if the stock is currently selling below its intrinsic value (its margin of safety).....then buy the stock and sell it when it reaches it intrinsic value. What I found was that the slightest error in forecasting caused dramatic changes in the intrinsic value. I think Warren Buffett's greatest secret is how he is able to fairly accurately (his record is not 100% either) determine a company's intrinsic value. As I read further into the book......it even got more bizarre when Town threw in technical indicators for selecting stocks. If you are really lucky using Graham's fundamental value approach......you have some chance of equaling the return of the S&P 500......but you might as well read tea leaves as use technical indicators to select stocks. Most academic studies have found no value in the predictive powers of technical indicators. One has to also ask, where is the substantiated data that Town's method of picking stocks has beaten the S&P 500 at the same level of risk as the S&P 500? Town also ignores the behavioral finance aspects of investing. Very few people have the discipline to remain 100% invested in stocks when a Bear market shows up. Most people chase the winners and therefore buy high and sell low. As the greatest investor of all time.....Warren Buffett......has said......most investors should use index funds for their investments. I would suggest people save their money and not buy this book.......but instead buy a couple good books on index fund investing and asset allocation. The Richest Man in Babylon Bogle on Mutual Funds: New Perspectives for the Intelligent Investor The Millionaire Next Door The Four Pillars of Investing: Lessons for Building a Winning Portfolio A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing, Ninth Edition The Coffeehouse Investor: How to Build Wealth, Ignore Wall Street, and Get On With Your Life The Bogleheads' Guide to Investing