Confidence and conviction are the keys to success in asset management. Analysts projecting these traits become more likely candidates for promotion; clients gravitate to portfolio managers who radiate assurance about future performance. However, these qualities do a disservice to optimal decision making and long-term investment performance. The future is too complex to justify such levels of confidence.
In Reasons to Pass, the seasoned practitioner Ralph Birchmeier argues that an optimal portfolio-building strategy means patiently waiting for the few investments worthy of capital allocation. He outlines the principles required for success then examines specific reasons to pass on investments, detailing behavioral biases that disrupt optimal decision making. Although professional and retail investors alike are tempted by various opportunities, the wisdom of experience proves the value of prudence. An investing strategy built to last requires humility and the willingness to accept uncertainty; most of the time, it's best to pass.
Reasons to Pass brings investing back to the basics, helping readers navigate the complexity of the financial landscape and bringing clarity to the investment process. By underscoring the perils of overconfidence and the importance of humility, this book offers invaluable new perspective on investing for the long term.
By:
Ralph Birchmeier
Imprint: Columbia University Press
Country of Publication: United States
Dimensions:
Height: 229mm,
Width: 152mm,
ISBN: 9780231207089
ISBN 10: 0231207085
Pages: 320
Publication Date: 27 June 2023
Audience:
General/trade
,
ELT Advanced
Format: Hardback
Publisher's Status: Active
Part I. Principles and More Introduction 1. Reasons to Pass: Investment Principles 2. Main Street Versus Wall Street: A Rigged Market? 3. Fundamental Analysis in the Digital Age 4. Indexing: A Viable Option Part II. Reasons to Pass Introduction 5. Minimum Market Capitalization 6. Financial Leverage: The Ultimate Killer 7. High–Fixed Cost Businesses 8. Accounting 9. Regulatory Uncertainty 10. Corporate Governance 11. Asset Liability Mismatch 12. Deep Cyclical Companies Near Cycle Peak 13. High-Cost Commodity Businesses 14. Cash Flow and Earnings Disconnect 15. Structurally Declining Businesses 16. Obsolescence Risk 17. Valuation: A Critical Protector of Capital and Returns 18. Lollapalooza Effect Part III. Reasons to Buy Introduction 19. Screening 20. Growth Stocks 21. Core Characteristics of Successful Investors 22. Viable, and Buyable, Investment Opportunities 23. Selling Discipline Conclusion Index
Ralph Birchmeier was a CPA, became a CFA charterholder, and worked at Brandes Investment Partners LP as a global equity analyst and investment committee member for nearly twenty years, building global equity portfolios. Today, he is a private investor and guest lecturer on accounting, finance, and valuation.
Reviews for Reasons to Pass: A Guide to Making Fewer and Better Investments
Ralph Birchmeier covers extensive territory, expanding on Graham’s fundamental principles as well as Warren Buffett and Charlie Munger's ideals to offer new perspectives on investing wisely. Readers will greatly benefit from his insights on accounting and valuation. -- Jean-Marie Eveillard, trustee emeritus, First Eagle Funds While most investment books tell you what to look for in an investment, more importantly, Reasons to Pass tells you what to avoid. Ralph Birchmeier has distilled his decades of hands-on experience into a book that offers a comprehensive and entertaining introduction to core investing principles for the aspiring investor. -- Paul D. Sonkin, coauthor of <i>The Enduring Value of Roger Murray</i> and <i>Pitch the Perfect Investment</i> Ralph Birchmeier presents a unique and comprehensive survey of investment opportunities in global equity capital markets, elegantly demonstrating why good investments are hard to find. -- Joel Lusman, Lusman Capital Management
