Today, investors are desperate for certainty in an uncertain financial world. They are looking for rigorous, practical, straightforward, tried-and-true advice that applies in both bear and bull markets. That is what this book provides-a set of principles that will give you ballast, helping you keep your investing equilibrium no matter which ways the winds blow. I call the principles a "Secret Code." It's a code in two senses of the word: both as a group of rules to guide you and as a set of tools to decipher a mystery. The truth is, the advice most investors get is garbled, raw, confusing. This book helps you crack the secret code of investing.
It offers specific recommendations on what to buy (for example, pharmaceutical and for-profit education stocks) and what not to (semiconductor stocks, corporate bonds). It tells you how to build the best portfolio for retirement, how to accumulate what you need for your kids' tuition or your trip to Paris, how to find a broker, how to avoid being skewered by taxes, inflation and the stock market's wild volatility.
But, more important, this is a book built on a coherent philosophy of investing-a set of precepts that I have been developing over more than 20 years-by studying and analyzing financial history, by writing about investing as a columnist for such publications as the Washington Post, Reader's Digest and the International Herald Tribune, and by practicing what I preach. It's a code that works. During the debacle of 2000, the portfolio of stocks that my co-author, economist Kevin Hassett, and I recommended in our 1999 book, Dow 36,000
, rose smartly. Our top pick, Tootsie Roll Industries--yes, chocolate lollipops in an age of microchips--shot up more than 50 percent. In Dow 36,000
, we developed a sophisticated financial theory that led to an enthusiastic view of the stock market for the decade ahead, but we warned investors vigorously that they must follow a specific discipline. In this book I have developed that discipline fully and spell it out in clear detail in a Secret Code of 47 laws.From the Hardcover edition.
Excerpted from The Secret Code of the Superior Investor by James K. Glassman. Copyright © 2002 by James K. Glassman. Excerpted by permission of Crown Business, a division of Random House, Inc. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.