The Billion Dollar Mistake By Stephen Weiss: Book Review ~ market folly

Wednesday, January 20, 2010

The Billion Dollar Mistake By Stephen Weiss: Book Review

We're back with the next installment of our book review series and today we want to give you a look at Stephen L. Weiss' new book, The Billion Dollar Mistake: Learning the Art of Investing Through the Missteps of Legendary Investors. As the title implies, the book teaches you to learn from mistakes. And in particular, it teaches you to learn from the mistakes of some of the greatest investors out there.

Let's face it, there are many great books out there on the topic of an investor's greatest scores. One of our favorites is The Greatest Trade Ever as it details John Paulson's big bet against subprime. We mentioned in our review of that book that we could not put it down and read it all in one sitting. Well, we can now say the same about The Billion Dollar Mistake. It was that entertaining.

While success stories make for good reads, Weiss' book goes a step further by teaching you practical and valuable lessons that you can immediately implement into your own investment process. Winning investments make you money. Losing investments teach you unforgettable lessons. Flowing like a novel, The Billion Dollar Mistake is a series of narratives detailing the mistakes of legendary investors Leon Cooperman, David Bonderman, Kirk Kerkorian, Bill Ackman, Aubrey McClendon, Nick Maounis, Richard Pzena, Geoff Grant, Chris Davis, and Adolf Merckle.

Weiss' book focuses on many lessons including:

- Declining stock prices do not always equal opportunity
- Leverage is a double-edged sword
- Passion is not an investment strategy
- Always do your due diligence
- Don't be blinded by outsized returns

Given that making a mistake in financial markets can cost you hundreds, thousands, millions, or even billions of dollars, these are valuable lessons to say the least. No matter the amount of money you manage or your investment pedigree, the mistakes made by professional and everyday investors are often one and the same.

Weiss takes the massive world of investing and drills it down into easy to understand principles. Everyone is human and makes mistakes. Investors are no different. Great investors are no different. The Billion Dollar Mistake fully highlights this and allows everyday investors to relate to some of the most well-known investors out there. Weiss' book lets you live their mistakes and makes you realize that some of the smartest minds out there have made the exact same missteps you have. Great investors are often put on a pedestal and worshiped by those trying to emulate them. This book removes the pedestal and allows you to truly learn from them.

Author Stephen Weiss' career on Wall Street has spanned 23 years with stops at Oppenheimer, Salomon Brothers, hedge fund SAC Capital and more. He has truly crafted a great read and has transformed the lessons of legendary investors into an entertaining and educational narrative. Definitely check out The Billion Dollar Mistake: Learning the Art of Investing Through the Missteps of Legendary Investors as you're bound to become a better investor (or save yourself from losing lots of money) because of it.


This joins our growing series of book reviews:

- Think Twice: Harnessing the Power of Counterintuition by Michael Mauboussin
- Riches Among The Ruins by Robert P. Smith
- The Greatest Trade Ever by Gregory Zuckerman
- The Murder of Lehman Brothers by Joseph Tibman
- Street Fighters: The Last 72 Hours of Bear Stearns by Kate Kelly
- The Ivy Portfolio: How To Invest Like the Top Endowments by Mebane Faber
- Hoodwinked by John Perkins

For more great books check out our various recommended reading lists as well.

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