Monday, April 09, 2007

Book Review: The Sleuth Investor by Avner Mandelman

This is a book which every serious investor must acquire. A book which can help level the field between the large institutional investor, with all the attendant advantages, and the small investor like me.

While I own some 25+ investment books, including classics such as "Security Analysis", "One Up On Wall Street", and "Common Stocks and Uncommon Profits", I have to say that I think this book will prove to be the most personally enriching.

I could just tell right from the cover that this book, The Sleuth Investor, was going to be different from almost every investment book I've every read. Instead of a picture of Bulls or Bears, The Author, Dollars Floating in the Sky, or a Stock Exchange Building, instead there's a picture of what appears to be a private detective or, perhaps, a field operative. As I surmised from the cover, the book didn't disappoint.

And the dust cover picture cuts to the heart of the difference between this book and all the other investments books I've read. The difference between receiving second hand, "academic" information of stocks (eg annual and quarterly reports, etc.) or gathering that publicly available information, PLUS quality information directly from the field.

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The author, Avner Mandelman, president and CEO of investment firm Giraffe Capital, tells you exactly how to sleuth out investment opportunities "in the field". He gives direct examples of what, who, how and when. This is not a book full of numbers and ratios; Mr. Mandelman knows full well that the investment world is full of these, yet the number of investors able to outperform the market is very few indeed.

In this book, he shows you how to both lower your investment risk profile, all the while increasing your odds of batting not just one, but numerous, investment home runs. While some investing books, such as Ken Fisher's "The Only Three Questions That Count: Investing by Knowing What Others Don't" state the importance of acquiring exclusive or near exclusive information, his book doesn't actually show you how to achieve that, since it only provides some further academic tools to suggest whether you might know something others might not know. On the other hand, if you apply Mr. Mandelman's suggested techniques, you'll know when you know something others don't when you are finished "sleuthing" a stock story.

I certainly haven't read any like it before, although there's hints of "One Up On Wall Street", by Peter Lynch here and there, and some visible heritage to "Common Stocks and Uncommon Profits", by Phillip A. Fisher. There's also some obvious lineage to Warren Buffett's ideas as well.

The book is a great read as well; it was the first investment book I've read since "On Up On Wall Street" by Peter Lynch that I when read it in bed, it was because it was so interesting, rather than because I intended as use it as a non-prescription sleep aid.

Canadian readers who've followed the business community here for a dozen years or so, will also especially savour a couple of the tales of "investment sleuths" from a couple of the high profile business stories and people here.

In one example, the "Z-Plat" story (almost certainly the Bre-X fraud) a sleuthing pension-fund manager saved his company a small fortune from physical sleuthing of a mining company's claim, and later turned that same information into a small personal fortune.

In another story, "Chipperware", Mr. Mandelman explains how he was able to turn a tidbit of public information about a piece of a one-of-a-kind designer clothing into a small fortune. One never knows of course, but many of the facts here appear to parallel some known public information about the wife of Corel Corporation's founder (Dr. Michael Cowpland), the flamboyant Marlene Cowpland, and an extremely expensive dress she wore to a gala.

Yes, as you read the stories of "Chipperware" and Z-Plat, be aware that these tales are almost certainly real business events as well.

In summary, this is an investment book that meets its dust cover promises. I cannot stress highly enough the importance of making this soon-to-be investment classic part of your permanent investment library.


JW

The Confused Capitalist

4 comments:

Offshore Investor said...

Hi, enjoyed the blog. Thanks

CrossProfit said...

It is unclear what the previous comment has to do with this book.

Thank you for bringing this book to my attention. I have not finished reading the entire book, yet I can say that so far I think it is well written. This reminds me of several articles written by our CEO; for example, http://seekingalpha.com/article/15652 .
These types of articles are not posted on the CrossProfit site…so I'm not plugging…

Disclosure: Opinion of a CrossProfit analyst and may not portray the opinion of Crossprofit.com.
http://www.crossprofit.com

Jay Walker said...

Thank you crossprofit, I have deleted the previous comment, which was a shameless self-promotion.

JW

NonyMous said...

Hi Jay,
Thanks for the introduction to the book...i did glance over a couple of pages at the bookstore..which read about getting an edge in investing by figuring out one piece of info. that no else knows..and i have also ordered the book at my local library!! Hope to read it soon!