Invest Like a Fox... Not Like a Hedgehog: How You Can Earn Higher Returns with Less Risk

by Robert C. Carlson

Book Overview

Proven techniques for leading-instead of following-fast-changing markets

Investors, no matter what strategy they are using, can be placed into two categories. Single-minded, inflexible hedgehogs lock into one strategy and stick with it through thick and thin. Dynamic, adaptable foxes, on the other hand, are alert for changes, learn from experience, embrace new ideas, and make the most of new trends and technologies. The key lies in being...

• Format: Hardcover
• Language: English
• ISBN: 0470126337
• ISBN13: 9780470126332
• Release Date: July 2007
• Publisher: Wiley
• Length: 256 Pages
• Weight: 1.00 lbs.
• Dimensions: 1.0" x 6.4" x 9.2"

Customer Reviews

Worth a read

The author describes to readers that hedgehogs are investors who never change their investment strategy and tend to see and relate everything through one vision. Foxes, on the other, hand adjust their strategies when circumstances change. He gives example of Tiger Woods and Warren Buffett by showing how they changed their ways to adapt to changes. He says, "Investors must adapt their investment strategies to capture the dynamism of the investment markets or they will earn lower returns than they should and perhaps suffer large losses." While I completely agree with the author on this point, I am not so sure that investors lose money because they don't adapt. I think that investors lose money because they don't have any investment strategy at all, and they jump in and out of the market based on emotions, expert advice, or other factors. Those readers who have an investment strategy and are too dedicated to it will probably benefit from this book because they will learn to be more flexible. - Mariusz Skonieczny, author of Why Are We So Clueless about the Stock Market? Learn how to invest your money, how to pick stocks, and how to make money in the stock market

Think you should just allocate and "buy and hold"?; Read this!, Think Again !!

This book is a needed antidote to the glib advice often given to create a diversified portfolio and then just hold it, no matter what happens (except for periodic rebalancing). These portfolios are often marketed as "lazy chair", or "coffeehouse", etc....but, as this book makes clear, life is, unfortunately, not that simple. This book explains the academic theory that underlies the buy-and-hold philosophy, and then points out the practical flaws for a real-life, individual. The basic problem is that in the real world investors are concerned with the next ten years or so (which is especially critical for those in the early years of retirement), not the last century of financial date used to suppport the buy-and-hold recommendation. In practice, Carlson points out that in the short-to-medium term there are valuation cycles, and these down cycles can result in sharp downturns that could devastate a buy-and-hold investor. That is particularly true if an investor holds all-market index funds, which are often a key part of the simplified buy-and-hold strategy. Carlson makes a number of suggestions on how to act as an investor, and I will mention a couple of these here. Basically, you need to take into account the valuation cycles, and, like a fox, make adjustments periodically. Timing the market is impossible, so investors have to act like risk managers, and position themselves with a "core" portfolio that should perform well in downturns, while having other, riskier positions that fluctuate, using sell signals to avoid large losses. Another tactic is to use alternative investments that use hedge-fund like strategies to perform well in various market conditions. It should be noted that the one-star reviewer apparently didn't focus on the investment strategies mentioned in the final chapters of the book.

Excellent for the serious retirement investor

This book takes the subject of diversification to a 2007/2008 level by highlighting the Funds ETF's and Derivatives that are now being created to give the serious investor an opportunity to apply them. A serious book for the investor who wants to get it right. Be sure to cover the last chapters.