What Works on Wall Street, Fourth Edition: The Classic Guide to the Best-Performing Investment Strategies of All Time 4th Edition

What Works: Making Money The Old Fashioned WayThis is very thorough look at the many different investment strategies in stocks that one can use. It shows what the actual returns have been from the mid 20's to current time. It is very eye-opening on What Works. The study points out that no one strategy will work best and there are times that fad investing will outperform the S. and P 500. But when the fad ends, the losses can happen quickly and can be quite painful. Witness the dot com boom and bust in the late 1990's. If you want to be the next Benjamin Graham, Warren Buffet or Peter Lynch this would be a very useful read.Today stocks are being avoided as a very risky low return investment. Bonds are still the choice of safety and return. But every dog has his day and stocks have had a good run and may continue on that path for some time as there are not many competitive choices to equity ownership. The problem with owning a volatile investment class is monthly swings and this leads the investors with the desire to sell in a down market to cut losses. Now the popular investment strategy is to trade in and out of the market to reduce losses, but many are missing the upside because of this strategy. Being out of the market for a day, week, or month each year (when markets are going up) can greatly reduce one's return. Therefore understanding one's risk tolerance is the most important strategy and how much you can afford to loss will lead to a more successful long term chance for happy results.Investing in all classes of assets and giving value the biggest weight seems to be the best long term strategy. First start with how much money you realistically see lost on your monthly statement before feeling the urge to sell and run to the hills. So your portfolio should be a balance of risk free investments and longer term risk assets. Think in terms of percentages and not dollars . Keep rebalancing at least once a year. A quarterly rebalancing would even be better.Understanding why you are investing and what the portfolio you are creating will be used for in the future is helpful. It will lead you to different portfolio strategies. The biggest use of funds will be retirement and there is a growing debate on how much you will need in retirement. This has lead to trying to simplify a complex calculation to a couple of data points. It is complicated but there are many worksheets that can help get to a number that one would need. If you do the numbers, it may show that you need more juice out of your investments or more savings. In either case this book can be great tool in getting your portfolio working harderThe keys are thinking long term and searching for value investments. If everyone is talking about how well a company is doing , it may be fully valued.

Other books offer similar advice. Few books offer advice that's been rigorously tested against as much historical data as possible.I started with Joel Greenblat's 'Little Book That Still Beats the Stock Market', then James O'Shaughnessy's son Patrick's book 'Millennial Money'. Both do a good job warming up a novice investor to the concepts and basic guidelines that comprise the best strategies from this book, but with less expectation that the reader will have market and accounting fundamentals, or patience for many chapters of dry experiment reports.Of these books this is the most refined and extensive, and drives home an understanding of risk from the standpoint of one who doesn't buy the random walk theory.I'm confident I'll do all right investing using this information in my strategies long term.

I am a fan of this book. That being said, I will also say the majority of it is not fascinating and did try my patience at times. There is an overwhelming amount of data that is presented. I think that the fact someone took the time to gather all of it and analyse it in this way should be applauded. It is information that previously had been assumed, taken for granted, not known or wrongly believed. It allows us to look at the historical facts in a completely objective manner, and is eye opening in many ways. I will definitely try to implement some of these strategies in the future.I do think there is a lot of material in the book which could have been cut out (and maybe should have been) without having any real loss of valuable information. Are all the data and details of every losing strategy actually needed? Overall, I believe the book is a "must have" for any serious long term investor!

This book provides a wealth of thoroughly backtested research. It is essential reading for anyone who takes investing seriously. I have used it in my screening processes to good effect. It's the type of book I wish I could have read decades ago.

This is a great book! James goes over ton of scenarios and breaks them each down in length of time in the investment. It typically shows 5, 7, and 10 year periods year of year. He covers which metrics are proven to work best and how others have worked over a period of time and then become obsolete. For example many people often looked at PE ratio, he shows that at one time it was a great indicator but lost its staying power over time. James covers the indicators which up to the date of this book have the real staying power and work out best for the investor. In the end, I found this book as a must have for any investor looking to grow their portfolio. If you're a beginner investor you should certainly read this book before investing a dime. I wish I would have!

While there is an overwhelming amount of data, the point is that one can't pick winning stock screens from a mere million records over five or ten years. The data is nicely organized and it is easy to get the picture reading the first and last pages of each chapter, then delve in later if needed. Each chapter follows a similar format, making it easy to use the book as a reference. The O'Shaughnessy keynote to the AAII national conference in 11/2013 is a good intro, and available from AAII. An article in the March issue of AAII Journal maps out instructions on how to implement the findings of the book using the AAII database. This is the best guide to stock screens that I have found in my twelve years as a money manager.