The Naked Portfolio Manager: A Review

by David Bakke

Naked Portfolio ManagerThe following is my first post of 2010 and my first leap into the world of book reviews. I enjoy reading books on any topic related to personal finance, so if you are looking for a review of your book, just drop me a line and we can set something up.

 I recently  had the pleasure of reading a book called The Naked Portfolio Manager by Robert Fischer.  Robert is a senior portfolio manager and advisor for affluent individuals at a national brokerage firm  and a colleague of mine.

The Naked Portfolio Manager is a good smooth read for just about anyone interested in personal finance.  And this is regardless of your investment experience, knowledge, and or abilities.

I would have to consider myself basically a novice in the world of investing, although I am trying to improve this area of my life.  Mostly, I do go on the advice of others; however, these “others” are people that are highly trusted in my life.

 

The premise of The Naked Portfolio Manager is that we need to remove any and all kind of emotion from our investment strategy, and to basically steer clear of any people who haven’t yet done it. Robert states in no uncertain terms that these emotions can cloud our judgment (or the judgment of people making our investment decisions for us) which could lead to potentially bad financial decisions, or decisions that are less than optimal.

He goes on to say that our investment strategy needs to be based on SPMs (Statistical Prediction Methods), which are basically a set of rules which will govern our investment portfolio.  In short, the book could be used as a guide for someone who wanted to get started in the world of investing.  It provides solid, easy to understand tips and pointers that in my opinion, would be helpful to any investor on just about any level.

If you think about it, emotion clouds our judgment in virtually everything we do.  Think of what better decisions we could make with respect to relationships, with our health, with our careers, anything, if we take emotion out of the equation.   Let’s see….”He/she really doesn’t treat me that well, but I’ve been with him/her forever.”  “Sure, there are better jobs out there, but my co-workers are nice and the company really needs me.”  If you think hard and long about it, this strategy could be used in just about any area of your life.

The Naked Portfolio Manager to me is almost a must read for anyone looking to start and/or improve an investment portfolio.  I was previously invested in money markets for what I thought were a list of very good reasons.   After reading The Naked Portfolio Manager, I realized that there is a different way of thinking out that statistically beats the results of these money market funds on a long term basis.

I would give this book a shot.  It is currently available at Amazon, and Robert also publishes a blog under the same name of the book. 

 

So, what do you think about the idea of taking emotion out of our investment strategies?  Please comment below.

{ 2 comments }

1 Robert J. Fischer January 5, 2010 at 1:33 pm

David,

Thanks so much for the kind review. Blog readers who have questions about the book can feel free to email me and in the next couple of weeks an e book which summarizes some of the key points in the book will be available.

2 David Bakke January 5, 2010 at 6:53 pm

Robert:

I appreciate the opportunity to read your book–it has really changed my outlook

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