The Sixteen-Hour Investing Book

By K. L. Doyle

"There is a three-headed hydra that stands between you and success in the financial markets.

"It’s April 10, 2014 and I’m sitting here in the airport in Bangkok, waiting for my flight to Egypt and then home. It’s been 7 months since I landed in Bangkok and I’ve done - and learned - a great deal in that time. Our flight plus connection home is going to be about 41 hours long, so I’ve decided to take some of that time to write out what I consider to be a practical guide for new investors. The result is the book you have in front of you. It’s not pretty. There are likely many problems with my grammar, but the ideas expressed here are sound. I hope you find them useful..."

Patrick Doyle has worked as a financial advisor for over 10 years. In this quick read, Patrick explains the world of financial markets faced by Canadians that he's come to know so well over the years. The book was written in 16 of the 41-hour trip that took him from the airports of Bangkok to Cairo and finally back home to Toronto. Patrick talks about the many obstacles faced by the individual investor, and offers a blueprint for success. Some of the issues he covers include how to tame your financial advisor, how to tame the markets, and how to tame yourself.

• Language: English
• Publisher: K. L. Doyle
• Release date: Apr 23, 2014
• ISBN: 9781311946393

Book preview

The 16-Hour Investing Book

by Patrick Doyle

Copyright 2014 Patrick Doyle

Published by Patrick Doyle at Smashwords

Smashwords Edition License Notes

Thank you for downloading this ebook. This book remains the copyrighted property of the author, and may not be redistributed to others for commercial or non-commercial purposes. If you enjoyed this book, please encourage your friends to download their own copy from their favorite authorized retailer. Thank you for your support.

Table of Contents

Acknowledgements

Prologue

Introduction

Hydra 1: Your Broker

Hydra 2: Yourself

Control Yourself

Avoid Media

Control What You Can Control

... Taxes and Fees

... Get uncomfortable

... Rating agencies loved Enron, too

... Innovation

Hydra 3: The Market

Buy low

Avoid narratives

Diversification

Mergers, Acquisitions, and BIG

Debt

Dividends

Technical Analysis

Concluding Remarks

Postscript (The Immutable Law of Finance)

Connect with Patrick Doyle

About the Author

Acknowledgements

To my beautiful and genius wife Kelly, without whom I would never have achieved anything, let alone the small success of completing this little book.

Prologue

There is a three-headed hydra that stands between you and success in the financial markets.

It’s April 10, 2014 and I’m sitting here in the airport in Bangkok, waiting for my flight to Egypt and then home. It’s been 7 months since I landed in Bangkok and I’ve done - and learned - a great deal in that time. Our flight plus connection home is going to be about 41 hours long, so I’ve decided to take some of that time to write out what I consider to be a practical guide for new investors. The result is the book you have in front of you. It’s not pretty. There are likely many problems with my grammar, but the ideas expressed here are sound. I hope you find them useful.

Introduction

As an investment advisor – and student of market history – I’ve determined that the individual who’s trying to save for some goal, who is investing because he believes it’s what’s needed to get by, faces three primary obstacles. I call them the three heads of the hydra. The first problem is the large industry that purports to help the investor. I’m reminded of Thoreau: If I knew for certain that a man was coming to my house with the sole intention of helping me, I’d run for my life.[1]

Same with this industry. In Canada, there are approximately 10 000 individuals who represent a few hundred businesses that are in the business of offering you advice about what to do with your money and then charging you a fee for said sage advice. Too often the advice is worse than useless.

I remember sitting listening to colleagues of mine talk on the phone to clients and prospective clients. The conversation would go something like this: Mr. Smith… the good folks at [fill in name of gold mine, shipping company, bank, retail store or whatever] have just [struck a new vein of gold, won a long term contract to ship future landfill from producer of future landfill to consumer of future landfill, have just figured out a way to extract more money from their poor blighted clients by convincing them to borrow more money, are following a fashion trend that’s here to stay]. Because of that, I think the shares are going higher and therefore I think it represents a really good buy. We should get in before the market figures it out!

There are three problems with the above. First, it’s assumed that what is being said is true (that the vein has been discovered, etc.) and isn’t just conjecture, rumour, and bullshit. Second, it’s assumed that the giver of advice has a clear understanding of the economics of the underlying change (for example, the gold may have been discovered, but does advice giver know or care that the miner needs to spend $2 million to build a road, and another pile of money to do whatever else gold mines do before they start pulling gold out of the ground, like paying bribes, acquiring engineering equipment, transporting engineering equipment, hiring labour?). Third (and this one is the most ridiculous to me), it’s assumed that giver of advice s like some modern day Oracle; having come down from the mountain with this singular insight, the giver of advice now bestows it upon a sometimes ungrateful client. The idea that the people inside the company, the analyst community, the hundreds of advisors who have access to the picked over reports from analysts and everyone else who hears about it before Mr. Smith in the above will leave some profit on the table for him is ludicrous.

How often does the giver of advice have no understanding about the economics of a