Book Review > 20/20 Money - See the Markets clearly and invest better than the pros

I offered to review this book because of its title – I could benefit from increased clarity in seeing the market. This book is an imprint of the “Fisher Investments Press”. I'm unclear on the relationship between the publisher – John Wiley & Sons and Fisher Investments Press. A bit of googling helped me find “Fisher Investments oversees financial assets for prominent institutions and affluent individuals. We take an active approach to portfolio management and believe capital markets are effective discounters of publicly available information....”.

The cynic in me says that the book is an overview of current fashion in investment covering connections to “neuroscience, CEAS (complex emerging adaptive systems), the nature of risk,...”. Fortunately my current reading in another area, architecture, had me looking at “Pattern Language” a classic architectural text. Thus a focus on pattern recognition in the book brought me back to a more objective frame of mind.

The interesting aspect for me of pattern recognition is that it removes the religious divide between fundamental focussed investors and technical analysis traders; both use pattern recognition. The former pattern in published financial data, for instance Stockdoctor's “Star Stock”, the latter basing their system on any one of a number of technical indicators such as Alexander Elder's Triple Screen System. Hanson states that the three big categories of patterns are:-

• Economic,
• Political, and
• Sentiment.

The chapter on practical portfolio management has a lot of interesting material in it from “diversification .. often overdone..” and a set of rules based on the portfolio manager's forecast, both of direction and change:

Philosophically the writer's outlook on the world is “Capitalism is amazingly adaptive. Bear markets and market cycles generally represent an important part of capitalism's work of creating efficiency and stronger economies and markets over time.” This is somewhat different from a Scandinavian approach where there is a move to have social and natural capital being given equal weight to financial capital.

I found the book stimulated my thinking and thus recommend it for the same purpose. It is essential not to be put off by the US focus, and the undercurrent of selling Fisher investments.

Tim Kottek is a member of the AIA.