Audiobook Review: The Little Book Of Common Sense Investing

The Little Book Of Common Sense Investing:  The Only Way To Guarantee Your Fair Share Of Stock Market Returns, by John C. Bogle

I must admit that I was familiar with the author’s product–namely the Vanguard S&P 500 Index Fund–long before becoming familiar with the author himself.  Although I am by no means someone who is deeply interested in stock markets and speculation [1], the material of this book did strike me as very interesting and worthwhile, even if the author was a bit repetitive in hammering his points about fair shares and the relentless/humble rules of arithmetic over and over again.  I found the author’s passion about index funds endearing, and found the author’s willingness to find a lot of support in his view and encourage a more laid back approach to stocks quite refreshing.  As a somewhat defensive investor myself when it comes to such matters, I have long found the low fees and low stress attitude of index funds, where one buys an index and holds it forever (or as close to it as human possible) to be the sort of approach I like to adopt when it comes to money matters, which makes me more fond of the author’s approach than others might be.

This audiobook is unabridged and a short one at only four discs and five hours in length.  Throughout the book the author talks about the difference in approach between those who wish to profit from trading in the market and the return to the mean that is involved with trying to beat the market against other people who are smart and ambitious trying to do the exact same thing.  A great deal of the book focuses on the issue of middlemen in the financial world profiting while reducing the money that goes to investors.  In fact, it may be said that the author, in a rather wonky way, is trying to urge for a populist rebellion against financial middlemen by utilizing passive investment sources that simply earn the market advance without having to do any effort minus very small fees.  Given the obvious advantages of the author’s strategy, one wonders why so many people think they are so much smarter than average despite repeatedly bad experiences for those who have sought to profit off of hyped recent results that never pan out, something the author points out over and over and over again.

It is pretty obvious that this book (or aubiobook) is aimed at casual investors.  The author knows, accurately, that many people involved in the stock market in various products like mutual funds and funds of funds and ETFs are not financial professionals and so are at a disadvantage when it comes to dealing with timing risk and tax inefficiencies.  The author’s strategy is not a very exciting one, to be sure, but some of us are not very exciting people.  The author’s urging of financial conservatism as the lion’s share of one’s investment strategy, making sure one gets a reasonable rate of return while avoiding as many kinds of financial risk as possible is wise advice and one that most people would do well to heed.  I am fully aware, for example, that I am nowhere near as financially savvy or well-informed as many others are about such matters–my second place in a Bulls & Bears competition as an elementary schooler notwithstanding.  This awareness, which many readers or listeners of this book are likely to have, should encourage a conservative approach that minimizes costs because of the likelihood that one’s losses will far outweigh one’s gains, especially when taxes and fees and timing risk are taken into account.  This audiobook made me want to read the author’s body of work as a whole, so that is something.

[1] But see, for example:

https://edgeinducedcohesion.blog/2016/01/03/book-review-why-flip-a-coin/

https://edgeinducedcohesion.blog/2011/08/09/the-confidence-game/

https://edgeinducedcohesion.blog/2017/12/02/to-create-and-to-possess/

https://edgeinducedcohesion.blog/2016/05/10/audiobook-review-the-big-short/

About nathanalbright

I'm a person with diverse interests who loves to read. If you want to know something about me, just ask.
This entry was posted in Book Reviews, History and tagged , . Bookmark the permalink.

2 Responses to Audiobook Review: The Little Book Of Common Sense Investing

  1. jamesbradfordpate says:

    Reblogged this on James' Ramblings.

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