Thursday, 3 January 2008

Book Review: No Hype - Straight Goods on Investing by Gail Bebee

This is a brand new book from an unusual source - a person from outside the financial industry who is largely self-educated on investing. That brings about a few of the major advantages of this book: unbiased opinions and advice; a practical, direct, simple approach to a vast subject matter. Bebee does not shy away from saying when she feels a financial product is not worth it ( e.g. principal protected notes) or is worth the money.

With a length of less than 200 pages, there is not a lot of detail or explanation - the chapter on taxes and inflation is all of seven pages - but there is enough to get started and most often links and references on where to obtain further information. This book is ideal for a (Canadian) person new to investing, or someone like the author, a person who wakes up one day after years of inattention buying mutual funds by rote and decides to take control of his/her own investing destiny. After reading this book, such a person will also know whether he/she really wants to manage the DIY way or find a good advisor (and the procedure to do the latter is covered as well).

The writing style is accessible and understandable, the explanations straightforward and simple. It will appeal to those like my wife whose eyes glaze over at long-winded explanations, who say "never mind all the background, just tell me what to do".

The content covers the gamut of personal investing topics: education, financial advisors, brokers, complaints, DRIPs, wrap accounts, asset classes and allocation, stocks, bonds, mutual funds, ETFs, IPOs, fees and commissions, segregated funds, real estate, foreign currency, hedge funds, RRSPs, RESPs, annuities, retirement, RRIFs, LIRAs, a series of model portfolios, reviews and record-keeping etc.

I found myself agreeing with about 95% of Bebee's opinions and recommendations (either we are both stupid or both smart!) so I can confidently say no one will go far wrong just investing blindly the way she recommends. The major areas in which I disagree are that I don't believe in either market timing (e.g. I'm quite convinced there is a pretty nasty recession coming but I'm not about to sell all my equity holdings and put everything in t-bills - who says I'm smarter than the market, whose prices implicitly incorporate the average of everybody's expectations in that regard) or in technical analysis. There are also some non-critical quibbles about certain statements in the text but they can be the subject of some good blog postings. One I will mention immediately, however, is that she doesn't identify blogs as a worthwhile source of investing information and views - harrumph! ... Update ... apologies to the author, as she pointed out to me in an email after this post was originally published, there is a mention of blogs as a source of investing information on page 23, though she doesn't say and it would be interesting to know which ones she recommends or likes.

My rating is four out of five stars. Buy it at the author's website at, or at Chapters/Amazon.

Have a look at Jonathan Chevreau's interview with Gail Bebee, part 1 and part 2.


Canadian Capitalist said...

I had similar comments as yours:


I'm also skeptical that most investors will be successful at stock picking or market timing.

CanadianInvestor said...

Yes, I too feel that attempting to do stock picking would likely be chancy for a neophyte. I kind of ignored that since anyone who has such a large portfolio as she recommends will likely not be a neophyte anymore, or if they are (an inheritance?) and they start trying to do the stock picking due diligence she also recommends will soon discover the amount of time is too much. I found the biggest problem with stock picking myself was running out of patience before the due diligence was complete and doing the "decisive" thing too soon. The only time I really went through the stock picking properly was the case study when I took the Canadian Securities Course and was forced to do all the analysis to get a good grade. It was a comparison of two companies and at the end I did conclude that one company was clearly over-valued and sure enough within a year it had really tanked. That's two companies only. It was a lot of work.

Gail said...

Gail Bebee here with a few comments:
1 The book is not yet available in bookstores. I am still in the process of lining up a distributor.
2 Regarding the portfolios in the book, the ones with stocks are for large dollar amounts. I also included mutual fund portfolios for smaller dollar amounts and an index based portfolio for lazy investors.
3 The chapter on market timing is there because it is a much discussed topic. It is another piece of information to consider when making a buy sell decisions.
4 Blogs wax and wane so I didn't mention any specifc ones. The ones I read regularly are this one, Canadian Capitalist, Larry MacDonald, Wealthy Boomer, Prefblog.

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