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The Black Swan

20 April 2009 Michael Szumielewski 425 Comments Books

The Black Swan

The Black Swan by Nassim Nicholas Taleb is a book about randomness in life and economy, concentrating and explaining the Black Swan phenomenon. Basically the Black Swan is a highly improbable event with huge influence on it’s surroundings. Although not foreseeable, the book teaches the reader how to deal with randomness and gives valuable tips on how to live a life which is open to opportunity.

Throughout the first chapters of The Black Swan: The Impact of the Highly Improbable you get an introduction to randomness and Black Swans. The author describes various situations where randomness is a huge factor and unleashes some common mistakes in human thinking regarding this topic. Nassim Taleb explains why so called experts are wrong and why the future can not be predicted by looking at the past. Instead, the really important events are rare and unpredictable, he calls them Black Swans.

The book goes on until you can’t take it any longer and start to have the nagging question in your head: “Dear author, what the heck should I do then?” The answer is provided in the practical chapter with some simple rules to handle life better with the knowledge of random events and their effects.

The book ends with some chapters about formulas and theory. Although there is a technical part, this book is not at all technical. If you are not interested in formulas, just skip these chapters, the author himself recommends that.

All in all, the Black Swan highly influenced my thinking about randomness and I think you should read it, too.

Go get it at Amazon.com

Pilgrimage to Warren Buffett’s Omaha by Jeff Matthews

9 February 2009 Michael Szumielewski 87 Comments Books

Pilgrimage to Warren Buffett's Omaha by Jeff Matthews

The Pilgrimage to Warren Buffett’s Omaha by Jeff Matthews is an enjoyable read for everybody who is interested in the insights of the Berkshire Hathaway Annual Meeting in Omaha and who seeks answers to investment questions from Warren Buffett.

Every year, they come to Omaha. Far from the stock market in Wall Street, in a place more known for cattle and corn, investors from all over the world gather for one purpose: Warren Buffett and his annual Berkshire Hathaway meeting. For the uninitiated, it’s an event wrapped in mystique and mystery. It’s a chance to have Buffett himself, the Oracle of Omaha, answer their questions.
In Pilgrimage to Warren Buffett’s Omaha: A Hedge Fund Manager’s Dispatches from Inside the Berkshire Hathaway Annual Meeting the reader gets an in-depth look at this unusual experience. The book covers the 2007 and 2008 meetings, a time when Bear Sterns was collapsing and more than 31,000 people came to seek advice from the investment guru.

The book is written by Jeff Matthews, a hedge fund founder and financial blogger. He got his own highly-coveted ticket to the Berkshire Hathaway meeting held only for shareholders and proceeded to post reports on his blog, offering tempting glimpses into the much-discussed meeting. Offering a thoroughly entertaining first-hand account of Berkshire Hathaway’s meeting, he answers questions investor’s are asking.

Personally, I liked the book and found it to be an enjoyable read. Jeff Matthews takes the reader into the world of Warren Buffet and his shareholders. You get a different point of view than usual and get a look at Buffet’s investing methods along with the way he interacts with his shareholders.
All in all, I can recommend this book to anyone who is interested in investing. If you want to learn even more about Warren Buffett, and you probably will after this book, you might also check out The Snowball.

Buy “Pilgrimage to Warren Buffett’s Omaha” now at Amazon.com

The Intelligent Investor by Benjamin Graham

20 March 2008 Sören Zschoche 4 Comments Books

The intelligent Investor Source: businessweek.comThe Intelligent Investor by Benjamin Graham, is a book which characterized the way many people think about the stock markets like no other book ever did before. Warren Buffett once called it “The best book for investors which has ever been written”. Probably this book also shows his point of view and perhaps without it he wouldn´t be that rich today. The author Benjamin Graham was Buffett’s teacher on Columbia University and the things he though and wrote down have remained valid until today, which nearly resembles a little wonder in the permanent changing economic world.

But what is it that makes this book so unique, that even the richest man of the world calls it his favorite book? First of all we can say that the author was a really brilliant man who together with David Dodd. He discovered that markets are irrational and you can profit of it. Today this is also known as value investing and can, if you adopt it correctly, make you very rich.

The book is structured in 20 chapters, which respond to nearly everything you need to know to become a professional “intelligent” investor. Especially the difference between an investor and a speculator is one of the central points of the book. Other emphases are the margin of safety, and things which train you to make your own decisions and to build up the self-discipline you need for that. The only disadvantage of the book is that there isn´t said much about techniques of the share analysis, but for this area Benjamin wrote another book with the name “Security Analysis”.

So, I really suggest you to read this book, because it´s probably the best one which has ever been written about investing. Seriously.

The Richest Man in Babylon by George S. Clason

15 March 2008 Michael Szumielewski 8 Comments Books

The Richest Man in Babylon

This article is a book review about the book The Richest Man in Babylon by George S. Clason. You can buy it on Amazon.com for $6.99 and we really recommend it, because it will teach you some important basics of personal finance and how to build financial wealth. In a nutshell, the book dispenses financial advice through a collection of parables set in ancient Babylon. Through their experiences in business and managing household finance, the characters in the parables learn simple lessons in financial wisdom. Nevertheless, modern people can easily understand and identify with the various situations and learn from the timeless wisdom about money, that is as relevant today as it was back then. Overall, this is a great book to learn how to deal with money and build wealth and how to bend streams of wealth flowing towards you. If you have an income, you can build wealth and get rich.
According to the book cover, more than two million copies have been sold.

Some lessons you will learn in the book:

  • A part of all you earn is yours to keep. It should not be not less than tenth, no matter how little you earn.
  • Counsel with wise men. Seek the advice of men whose daily work is handling money. Let them save you from such errors.
  • Learn to make your treasure work for you, make it your slave. Make its children and its children’s children work for you.
  • Opportunity is a haughty goddess who wastes no time with those who are unprepared.

There will be also some articles on WorldFinancialBlog.com about the lessons of this book soon, because in our opinion the book provides valuable lessons which are worth to learn. They worked for a lot of people, so why not for you too? We can adopt the philosophy of ancient Babylon one to one to our own lives today. The eons of time have crumbled but the wisdom of Babylon endures.

The latte factor: Save five dollars a day

8 February 2008 Michael Szumielewski No Comment Books

The Automatic MillionaireGetting rich is all about saving money, especially if have a low income. Saving has nothing to do with income, but everything to do with lifestyle. You have to change the way you spend money. One interesting concept of saving money every day is the latte factor. I came across this idea in David Bach’s book The Automatic Millionaire, where he points out, how important it is to save money every day by spending less on unimportant things you do not need. I recommend this book, because it is easy to read and pretty good for people who never came across the concept of saving money everyday. When you live paycheck to paycheck read this book, it will change your attitude to money.

The latte factor is based on the simple idea, that saving $5 a day will make you a millionaire. For example, it is Monday morning, you go to work and the first thing you do is checking in at Starbucks, because you need your daily coffee + muffin. From time to time you get a grand latte or whatever, so sometimes it is even more den $5. Let us assume you save $5 a day and invest them at a rate of 10%. First, let me point out, that this will save you $35/week or $150/month or $1,825/year. That is pretty nice, but it gets better. You will be millionaire in 41 years if you invest the money by an interest rate of 10%, save $10 a day and it will take you 34 years! Of course, this depends on your interest rate and savings, but remember it is just your latte money!

What if you really need your coffee every morning? Should you give up caffeine and sweets? That is a very good question, I know people who can not live without their daily latte. But why not bring it from home? Get a thermos flask and make your coffee at home. You like sweets or sandwiches for dinner? Buy your Snickers at the local supermarket in a family pack. This will cut costs at least by 50%. The same goes with water, snacks, fast food, cigarettes, magazines and so on. Just think about it! As I told you above, saving is an essential step on your way to become rich. Start today!