You are previewing The Little Book of Sideways Markets: How to Make Money in Markets that Go Nowhere.
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The Little Book of Sideways Markets: How to Make Money in Markets that Go Nowhere

Book Description

"It's hard to talk clearly about investing and make sense to ordinary readers at the same time. Katsenelson gives a lucid explanation of today's markets with sound advice about how to make money while avoiding the traps that the market sets for exuberant bulls and frightened bears alike." -- Thomas G. Donlan, Barron's

"A thoroughly enjoyable read. Provides a clear framework for equity investing in today's 'sideways' and volatile markets useful to everyone. Clear thinking and clear writing are not often paired - well done!" -- Dick Weil, CEO, Janus Capital Group

"The bible for how to invest in the most tumultuous financial market environment since the Great Depression. A true guidebook for how to build wealth prudently." -- David Rosenberg, Chief Economist & Strategist, Gluskin Sheff + Associates Inc.

"A wonderful, grounded read for new and seasoned investors alike, Katsenelson explains in plain English why volatility and sideways markets are a stock picker's best friend." -- The Motley Fool, www.Fool.com

Praise for Active Value Investing

"This book reads like a conversation with Vitaliy: deep, insightful, inquisitive, and civilized." -- Nassim Nicholas Taleb, author of The Black Swan

Table of Contents

  1. Copyright
  2. Foreword
    1. The End of the Debt Super cycle and Sideways Markets
    2. A Little Perspective on Time and Behavior
    3. The Endgame of the Debt Supercycle
    4. Which Brings Us Back to the Beginning
  3. Acknowledgments
  4. Introduction
  5. 1. Fasten Your Seat Belt
    1. 1.1. Take a Trip to the Zoo
    2. 1.2. It Takes (At Least) Two
    3. 1.3. Feeling Skeptical? It's Okay
  6. 2. A Sideways View of the World
    1. 2.1. Bulls, Bears, and Cowardly Lions—Oh My
    2. 2.2. The Price of Humanity
    3. 2.3. This Time Is Not Different
    4. 2.4. Where You Stand Will Determine How Long You Stand
  7. 3. Don't Shoot the Messenger
    1. 3.1. Where Are We?
    2. 3.2. Setting Earnings Growth on Cruise Control
    3. 3.3. What Zone Are You In?
    4. 3.4. Dividends Get No Respect
    5. 3.5. No Touch and Go
    6. 3.6. Being "in Stocks" Is Not Good Enough; What Stocks You Own Matters!
  8. 4. Tevye Was a Rich Man
    1. 4.1. Meet Our Hero
    2. 4.2. What's She Worth?
    3. 4.3. Factoring In Risk
    4. 4.4. At the Livestock Auction
    5. 4.5. The Final Tally
    6. 4.6. Price to "Anything"
    7. 4.7. The Day Tevye Bought His Golde
  9. 5. What We Can Learn from Gamblers
    1. 5.1. The Gambler in All of Us
    2. 5.2. Hold 'Em and Fold 'Em Like Tevye
  10. 6. Brought to You by the Letter "Q" (For Quality)
    1. 6.1. Don't lose money.
    2. 6.2. The Barbed Wire Fence
    3. 6.3. Not All Brands Are Created Equal
    4. 6.4. The Power of Free Cash Flows
    5. 6.5. Not All Capital Expenditures Are Created Equal
    6. 6.6. Analyze This
    7. 6.7. How Good Is Management at Spending Your Money?
    8. 6.8. Recurrence of Revenues Beats Consistency of Earnings
    9. 6.9. Debt Is Good, Except When It's Not
    10. 6.10. Accept No Substitutes
  11. 7. Brought To You By The Letter "G" (For Growth)
    1. 7.1. Revenue Growth
    2. 7.2. Growth from Margin Improvements
    3. 7.3. Stock Buyback
    4. 7.4. Increased Efficiency
    5. 7.5. The Past Has Passed
    6. 7.6. What Dividends Really Tell You
    7. 7.7. Higher Dividend = Slower Growth?
    8. 7.8. Dividends and Sideways Markets
    9. 7.9. Dividends Are Very Important, But . . .
  12. 8. Brought To You By The Letter "V" (For Valuation)
    1. 8.1. Beyond the Hammer
    2. 8.2. Look Both Ways before Crossing the Sideways Street
    3. 8.3. From Relativity to Absolutism
    4. 8.4. A Word of Caution
  13. 9. Add It Up
    1. 9.1. One Out of Three: Not Enough
      1. 9.1.1. Quality—Yea; Valuation and Growth—Nay
      2. 9.1.2. Valuation—Yea; Quality and Growth—Nay
      3. 9.1.3. Growth—Yea; Quality and Valuation—Nay
    2. 9.2. Two Out of Three: Better, But Is It Enough?
      1. 9.2.1. Quality and Growth—Yea; Valuation—Nay
      2. 9.2.2. Quality and Valuation—Yea; Growth—Nay
      3. 9.2.3. Valuation and Growth—Yea; Quality—Nay
    3. 9.3. Compromise? Not!
  14. 10. Nip/Tuck
    1. 10.1. Meet Your New Best Friend—Volatility
    2. 10.2. Time Stocks, Not the Market
    3. 10.3. Doing Nothing Is Really Something
    4. 10.4. Be Ready to Strike When the Time Comes
  15. 11. The Born-Again Value Investor
    1. 11.1. Plug Your Ears
    2. 11.2. How Often Should You Look at Your Stocks?
    3. 11.3. Media Are There to Drive You Insane
    4. 11.4. Single-Task
    5. 11.5. Other Sound Contrarian Advice
  16. 12. Applying Darwinism to the Sales Process
    1. 12.1. Sell That Stock When?
    2. 12.2. Selling When Fundamentals Have Deteriorated
    3. 12.3. Disassociate Yourself from Previous Decisions
  17. 13. You Are Not As Dumb—or Smart—As You Think
    1. 13.1. You Are Not as Dumb as You Think (Psychotherapy for Cyclical Bear Markets)
    2. 13.2. You Are Not as Smart as You Think (Psychotherapy for Cyclical Bull Markets)
  18. 14. On a Scavenger Hunt For Stocks
    1. 14.1. Map the Market
    2. 14.2. Use Screens
    3. 14.3. Borrow
  19. 15. Farewell, Blissful Ignorance
    1. 15.1. False Axioms and Consequences
    2. 15.2. Japan: Past the Point of No Return
    3. 15.3. China: The Mother of All Grey Swans
    4. 15.4. Crime and Punishment
  20. 16. Think Different
    1. 16.1. Managing Risk: What School Did Not Teach Me
    2. 16.2. Alternative History
    3. 16.3. Diversification: Not Always a Free Lunch
    4. 16.4. Too Many Eggs or Too Many Baskets?
  21. 17. I Could Be Wrong, but I Doubt It