Every once in awhile a new investing book (or personal finance book) comes along that gets an incredible amount of attention. It’s on all the best seller lists. Everyone on your Twitter feed is talking about it. Amazon reviewers give it glowing 5-star reviews, and many people you respect and follow are recommending it.
It seems like the book is the best thing since sliced bread.
Any time I see this much positive buzz, I get skeptical. Maybe it’s the contrarian in me, but all that marketing looks like a giant flashing-red warning sign. Is it just a bunch of marketing hype? Or is it actually a good book?
You see, all that marketing buzz is just the book publisher’s way of increasing sales — They hype-up new books and give free copies of the book to so called “influencers” (generally people with lots of followers on the internet) in exchange for a review.
These “reviews” tend to consist primarily of unending praise for the book, and are extremely light on the criticism. In my opinion these incentivized reviews tend to be more of a marketing sales pitch and less of an objective measure of book quality.
It’s with this deep skepticism for marketing hype that I begin my review of one of the most hyped investing books in years: “Richer, Wiser, Happier: How The World’s Greatest Investors Win In Markets And Life” (affiliate link) by William Green.
What’s The Book About?
First, let me being my review by clearly stating that I am not a part of that promotional machine. I’m not compensated for this book review in any way, and my opinions about it are my own. I DID NOT receive a free promotional copy of the book like so many others. I borrowed it from the library (in the form of an ebook) like any normal reader would.
So what’s the book about?
Richer, Wiser, Happier (hereafter I’ll refer to it as ‘RWH’) is a book about some of the best investors in the world. But don’t worry — It isn’t a get rich quick book. If anything, it’s a get rich extremely slowly kind of book.
It’s not filled with formulas or tips on how to select better investments. RWH is really a book about psychology. It’s a look into the minds of some of the worlds greatest investors based upon interviews conducted by the esteemed author, William Green.
Which investors exactly?
Major sections of the book are dedicated to the following investors: Mohnish Pabrai, John Templeton, Howard Marks, Jean-Marie Eveillard, Bill Miller, Joel Greenblatt, Nick Sleep and Qais Zakaria, Tom Gayner, Laura Geritz, Arnold Van Den Berg, and the venerable Charlie Munger.
If you’ve read any investing books before, you’re probably very familiar with most of these names. Only a few were new to me when I started reading the book…
And this leads me to one of my biggest criticisms of the book: It doesn’t cover a lot of new ground. Most of the ideas, methods, and insights from these famed investors have already been written about elsewhere. Heck — Mohnish Pabrai and Joel Greenblatt both have books on my own recommended book list. Howard Marks has decades of his memo’s published for free on the internet. Similarly, Nick Sleep’s partner letters are also freely available to the entire world. And Charlie Munger? He’s been written about ad nauseum over the last 50 years. Probably the best book on Charlie has already been written — Poor Charlie’s Almanac.
This is what I mean when I say “RWH covers very little new ground”. The investing ideas discussed in the text are (mostly) not new. The stories written about these investors have been available for years.
Investors with a desire to learn from the world’s greatest investing minds may already be familiar with much of the content of RWH.
Instead of just repeating what’s already been published, I believe the author (William Green) was attempting to form a synthesis of ideas common between these super-investors. This was probably the intent, but it’s also where the book falls down.
These ‘synthesized ideas’ are (in no particular order):
Stoicism, simplicity, the ability to take pain, incredible hard work, avoiding the mental failings of emotion (and other mental biases), stupidity avoidance, the aggregation of marginal gains, humility, the pursuit of quality, margin of safety, total honesty, and so on…
See what I mean? It’s a bit of a disorganized mess to be honest. Green throws around so many different ideas that it’s hard to make sense of them all. Some of the ‘connections’ discussed between the investors even seem like a bit of a mental stretch to me.
Green freely admits in the book that he self selected this group of investors because he liked them. Not because they had the best performance, or the best methods for generating outstanding investing results. This shouts “selection bias” to me.
Never-the-less, the book does have plenty of merit. There’s A LOT of good ideas about what it means to be a great investor contained within its pages. If you’re new to these “super-investors”, some of the ideas discussed in the book might even seem pretty revolutionary.
What it does do well, is dig down into the psychology behind what makes some of these investors tick, from Charlie Munger’s stupidity avoidance, to Mohnish Pabrai’s unashamed cloning of investing methodologies.
Is It Worth Reading?
Unintentionally, I think Green is trying to tell us with RWH that most people don’t have what it takes to beat the market. The investors he writes about are absolutely incredible people. They are intellectual mavericks, willing to defy the crowd for years. They have incredible minds and work incredibly hard. YOU, as a regular investor probably shouldn’t even try to do what they do. Just buy index funds and relax.
That single idea alone can probably make you richer, wiser, and happier.
Even if you’re already a “dyed-in-the-wool” index investor, there’s a lot of wisdom to be found in reading this book. The investors in the book are some pretty amazing and wise people. That alone makes it a good read for ‘average’ people with an interest in learning more about the world’s greatest investors.
However, if your the sort of investor that enjoys having a “go” at picking a better than average stock, and enjoys deep intellectual puzzles, this could be a great book for you. It’s not a book with a magic formula, but it does contain something of a ‘formula’ for nurturing the right kind of mind (and work ethic) that can potentially beat the markets.
After-all, if each of the investors written about in the book have been able to beat the markets, it should be possible.
This in my opinion is one of the book’s greatest strengths — It says, “Hey, here’s a big group of investors that share a number of similar traits, and they were all able to beat the market. It’s way easier to just index, but they ultimately prove that it is possible to beat the market.”
In concept, the book reminded me a lot of an article, The Superinvestors of Graham-and-Doddsville by Warren Buffett, in which he lays out the case for valuing investing by walking the reader through the records of many market-beating value investors.
Both texts are definitely worth reading.
Should You Buy It?
After finishing the book, I believe “Richer, Wiser, Happier” is one of those big over-hyped, and over-marketed books. It’s not a perfect book, like many of the online reviews imply. It’s kind of like the Harry Potter of investing books. It has the support of a big publisher. It’s well publicized, and marketed like mad.
Don’t get me wrong, William Green is a very good writer, and the book is definitely worth adding to your summer reading list. But save yourself a few dollars and borrow a copy from the library like I did. It’s not THAT amazing that you have to go out and buy a copy.
One or two read throughs should be sufficient for most people, and I can’t see any reason for owning this book in a personal library.
So what’s Mr. Tako’s review score of “Richer, Wiser, Happier”? 6 out of 8 financially independent tentacles!