Friday, September 11, 2009

Book Review - TNLG SMI

I wish to introduce one of my favorite books associated to stock investments. “The Neatest Little Guide to Stock Market Investing” by Jason Kelly. The book is much discussed and is a best seller in the category, my intention is to propose this book, as an essential read for every new and young investors. I strongly recommend all those to make a read who are related anyway to the market with an intention to make money.

The lengthy name of the book itself stretched than half of its cover page. But the most valuable but very simple following 4 sentences put on the cover page aptly described inside.(slight changes in various editions)

1. How the stock market works.

2. Concise summaries of advice from master investors like warren buffet peter lynch and bill miller.

3. How to beat the market with simple permanent portfolios

4. Keeping a cool head when others panic.

The book is basically targeted to novice investors, but by the end , author has taught several advanced expert level strategies that will ensure wealth for anyone who follows them diligently. The author explained the modus operandi of stock markets and simple techniques related to investment strategies. The book is streamlined to the final objective to making money with few clear cut revelations of various strategies.

The author stresses on few basic, but important aspects related to investment. First of all, an investor should know, why he is investing in stocks where such a variety of investment options available with lesser risk profiles. Kelly spell out one of the logical reason to invest in the stocks, as you can become a partial owner of big companies which you can not even dream out. He also establishes the stocks as the best investment option in entire category with a long term view.

The book also trying to convince some significant technical terms in simple lingo, like Return of equity, Price/Sales Ratio, Price/Earning Ratio, EPS, Net Profit Margin, Price/Book Ratio, Return on Equity and lot others. Its also elaborate the basic concepts related to technical analysis.

One core portion of the book is trying to exclusively discuss the strategies and investment techniques of the investor giants like Warren Buffet, Benjamin Graham, Philip Arthur Fisher, Peter Lynch, William O'Neil and Bill Miller etc.

Every stocks have a business value as well a market value. The market value is the same referred as CMP. We can buy any household items/garments with a considerable discount when a stock clearance occurs in any of the shops/brands in festival seasons or so, like wise we can buy stocks in good valuations than their original worth in certain junctures. Market always avail such chances irrespective of the trends. This strategy generally termed as Margin of Safety. Benjamin Graham is known as the father of this strategy. The book reveals investment related myths and tips of market legends in simple and with logical examples.

Jason Kelly also illustrates one of the famous strategies to make good returns from the market ie. Dow Dividend strategy. This strategy is treated as one of the most effective technique by decades. He also explains his own other extremely effective strategies like Doubling the DOW and Maximum Midcap etc.

He also placed a comparison on returns between his Maximum Midcap, Double the DOW techniques with DOW. He establishes, if someone invest a $10000 in DOW on 31/12/2002, it was around $14805 by 29/12/2006. But, if that investment applied with his own theories like Maximum Midcap or Double the DOW, the amount could have around $29457 and $19642 respectively. The logic can applicable to our market too.

Kelly makes the market easy to understand, exciting, and even incorporates some comedic pitch throughout the book. Although not trying to convince the readers that you can become a millionaire overnight, instead focusing on the proved formulas and strategies that will give an investor the lowest chance of loss and the highest chance of gain. He covers what has worked, what has not and what legendary investors experienced. He also summarizes similarities between those legendary investors.

The book lights on, how you can search and find out best stocks for good earnings in long term. It is also discloses, how to spot or avoid stocks which are under possible risk roofs.

I would like to sum up… It is a simple, intelligent and highly effective approach to investing. I can say from my own experience, the book is an invaluable resource for new and young investors.

Plus check the link... with a good read... may definitely help you


"Jason Kelly captured my investment methods well, and better than most who have tried to describe what I do."

Bill Miller, Portfolio Manager, Legg Mason Value Trust

Readers are requested to comment whether negative or positive which encourage me to do some more in this row.

Shabu -


  1. Shabu Sir,

    There are tons of book on investing but very few books stand out from the crowd and identifying those are difficult but when experts like you share it makes us less difficult to choose from those few books and people value recommendation of yours due to your solid research and i hope ppl will buy it blindly the way they buy stocks from your recommendations :)

    There is one more book The Dhandho Investor: The Low - Risk Value Method to High Returns by by Mohnish Pabrai [The Strict Follower of Buffet ] and the others are

    1. The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns.

    2. The Little Book of Value Investing.

    If you/any readers read above 3 books let us know your experiences.

    Thank you so much for sharing wonderful book.

  2. Thank you Mahesh,

    The book "The Dhandho Investor" is new to me. I will surely read that.


  3. Dear Shabu,

    Nice analysis of the book in short but precise & sweet language. I can not comment on the book as i haven't read it, but i can surely comment on your work on it in your blog - which is too good.

  4. Thank u Viral...

    I values your comments in a great way and thanks for that. Eagerly waiting for your next pick...




The blog is associated with information on Indian stock market and author’s investment view points on various emerging stocks/sectors. The contents discussed in this blog are purely my own personal opinion and in no case weigh it as any kind of recommendation for stock market investment. The sheer purpose of this blog is to educate the interested community on market related subjects based on my experience and I am, in no way, responsible for investment decisions based on the contents described in this blog.

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