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As with any book, Fundamentals of Investing will please some and not others. This book lays the foundation for investing by covering topics such as stocks, bonds, insurance, and the like along with understanding the risks of each. This book is not a "get rich quick" self help book. You will not find "trendy ways" to invest, hence the title "Fundamentals of Investing."
This book is where I learned Time Value of Money (TVM). Before I learned of TVM and investing, my retirement plan consisted of the value of my home and social security. Now I am well on my way to achieving my goal; retiring as comfortable as or better than I live now. If there is any social security when I retire it will be a bonus.
On the whole, this book (including my 4th edition) is useful even as a reference to the investment process. I use it to refresh my understanding of the variety and types of securities. Others may disagree but this is my investment bible. It has paid for itself time and time again by reminding me of the basic "Fundamentals of Investing."
You can remove a lot of risks to investing if you read and understand those investments in "Fundamentals of Investing."
What makes this book so difficult to follow is that at the end of each chapter, you are given a set of review questions to practice what you learned. This is very bad if your professor assigns the book, but doesn't use it. Now, this is the catch. There are NO answers for these review questions anywhere in this book. In fact, the only way one can possibly get these study question answers is if her or she is the professor. In order to do this, you have to login to the author's page as the "educator." Of course, students who buy this book for class, will only have student access which only enables them to see what they "need" to have learned from each chapter, and access to a small pc program that solves everything for you. A nice tool, but kind of pointless if you do not know what you are doing in the first place. Oh yea, did I mention you only have a 6 month subscription to this "service." I do not want to call it a service by any means, since its useless.
In short, if you are a student, or want to get the general ideas of investment, Do NOT buy this book, since you will never know if you are applying the principles that you learned from this book properly. I had no choice but to buy this book, but if you can avoid this book, please do, and save yourself a headache or two.
As with any book, Fundamentals of Investing has its good features and its bad features. The chapter on investment planning (chapter 3) is quite good as it gives the reader an understanding of the motivation for investing. Another good feature about the book is the treatment of the security analysis process and how the investor should approach the analysis of investments for inclusion in a portfolio.
However, the deficiencies of the book appear to outweigh its benefits. First, the authors appear to assume that the reader is already familiar with the concept of the time value of money (TVM). Since the TVM concept is vital in assessing the worth of an investment to an investor, a reader that is unfamiliar or not well versed in the TVM concept is likely not to fully understand how securities are valued. Second, many of the examples given in the book are not always of great help in assisting the reader in understanding the concepts that were presented. Finally, the problems at the end of each chapter do not seem to provide much of a challenge to the reader to apply the concepts that were covered in the chapter to reinforce what was supposed to have been learned.
On the whole, the book can be useful in introducing the reader to the investment process and in understanding the variety and value of different types of securities. But a reader who is less familiar with investing can do better than to buy this book.
A large spider in an old house built a beautiful web in which to catch flies.
Every time a fly landed on the web and was entangled in it the spider devoured
him, so that when another fly came along he would think the web was a safe and
quiet place in which to rest. One day a fairly intelligent fly buzzed around
above the web so long without lighting that the spider appeared and said,
"Come on down." But the fly was too clever for him and said, "I never light
where I don't see other flies and I don't see any other flies in your house."
So he flew away until he came to a place where there were a great many other
flies. He was about to settle down among them when a bee buzzed up and said,
"Hold it, stupid, that's flypaper. All those flies are trapped." "Don't be
silly," said the fly, "they're dancing." So he settled down and became stuck
to the flypaper with all the other flies.
Moral: There is no safety in numbers, or in anything else.
-- James Thurber, "The Fairly Intelligent Fly"
The church saves sinners, but science seeks to stop their manufacture.
-- Elbert Hubbard
