Better Good Than Lucky

In the introduction of Better Good Than Lucky author Charles Rotblut writes: "The reason for writing this book is to provide investors with a single book that is easy to read and based on sound investing theories and thought.". Well, he accomplished his objective and more. Published by W&A Publishing and Traders Press, Better Good Than Lucky amalgamates the ideas of financial pioneers like Harry Markowitz, Benjamin Graham and Philip Fisher, and the final outcome is an outstanding primer to add to your investing repertoire. I wish I had a handy tool like this publication when I was beginning my investing education. Intermediate investors may find this book of value, too, if they are not well versed in deciphering financial statements.

The author Charles Rotblut is a Chartered Financial Analyst who serves as vice president with the American Association of Individual Investors (AAII). If you aren't familiar with the AAII, they are the premier value investing organization globally. No technical analysis or momentum investing in this book, which was fine by me. On a personal note, I was schooled in bottom up, fundamental analysis of financial securities so I'm a bit biased in my preference for value investing. That said, let's take a look at what Mr. Rotblut has to offer.

Although the book is a melting pot of ideas, each chapter is a snapshot of a distinct concept in wealth creation. All I can tell you is that you get a lot of practical, common sense advice when dealing with industry sell-side analysts, money managers, investment advisers (stock brokers) and financial gurus like newsletter writers and bloggers. Mr. Rotblut gives the pros and cons of utilizing the services of each entity and doesn't really take a stance either way. He just paints a picture for you and lets the reader make their own decisions. This is just in the first chapter and he is consistent with his impartial leanings throughout Better Good Than Lucky.

If you have a strong accounting background, then the middle section of the book will not be of much value to you because it covers income statements, balance statements and cash flow statements. It also presents everything you always wanted to know about a 10-K but were afraid to ask. However, if you are like the rest of us and never went beyond Accounting 101 back in your school days, then you will be pleasantly pleased with how clear and concise Mr. Rotblut presents the information. I think that all investors whether they be beginning, intermediate or advanced would get a lot out of this section. The chapters aren't long, only about 10 pages apiece, and, give you the basics on what you need to know in deciphering financials.

The last section of the book covers valuations: when to buy and when to sell. The author favors Price/Earnings and Price/Book Ratios and also writes a very nice piece on The Discounted Cash Flow Model. If you've wondered how to compute The Discounted Cash Flow Model, go no further than Better Good Than Lucky. Mr. Rotblut cautions about using long-range forecasts because, even from professional analysts, they are nothing more than educated guesses. It's good to use the trends from these industry insiders as a barometer as to where the stock may be heading, either up or down, but it's best to do your own homework. This book will show you how to do it.

I read a lot of investing books and usually after about a year after reading them, I usually donate them to the local library foundation. This one I'm going to keep for my personal library because it's a really great reference manual. The only issue I had with it was the price. The book is only about 170 pages and retails for $29.95, about $21 at Amazon. Since it's such a great teaching tool, the publisher offers bulk discounts, and if you are so inclined, you can contact them directly if you are from an academic institution or other large organization.