Active Value Investing

This is a fine addition to any investor's bookshelf. On first reading, I thought it decent, but a bit shallow. But it has one of the best, and most accessible, discussions of how to value a business I've ever read. Many times I've used similar "thought experiments", attempting to reduce the complexities of publicly traded companies' financials to simple, but realistic examples, like Vitaliy does with "Tevye the Milkman" and his cows. It was sometime after that initial read, and while I was re-reading selected sections that I realized this is a VERY GOOD book. And now, in that way we all have of simplifying concepts, when people ask me about my investment perspective, I kind of just point to Vitaliy. "He says it best." I counter that deification by keeping the book on top of the toilet. Aside from the character Tevye, the main take away for me is about when, and why, to sell. Vitaliy makes a convincing case that we are destined to spend decades in range-bound markets, especially after long bull runs like the end of the 20th century. But from the inside, the ranges are large enough that we don't really see it, but instead experience it as separate bull and bear markets. The difference is that by the end of the long range period, there has been no net progress. Knowing that in advance, being able to see "outside the range", seeing the box we're in for what it is - that's what this book is about.

Mr. Katsenelson makes a compelling argument that the next 10 to 15 years will resemble the bear market of 1967-1982, when the Dow traded at or around 1,000 for 15 straight years. Though a sideways market poses challenges to every investor, Vitaliy presents a clear and concise method to profiting in such turmoil. Investors new and experienced, will be smarter for having read this book. This is a truly unique viewpoint of a lesser documented branch of value investing.

Active Value Investing has the hallmarks of all great investing books - easy to read, humorous at times, and most of all it demonstrates Vitaliy's investing process in terms accessible to the novice and expert alike. Despite it's title, this book is for bull, bear, or range-bound markets and will be highly recommended to our newsletter subscribers. I should add that I know Vitaliy personally and frequently discuss investing ideas with him - he's sharp, obviously knows his stuff and has that driving enthusiasm necessary to be a successful money manager. When you read the book you'll see what I mean Philip Durell Advisor Motley Fool Inside Value

The notion of buying stocks for the long run, or buy and hold, is so drilled into most value investor's heads, that few question whether it is always the right strategy. Katsenelson effectively outlines that some markets, in particular, range bound markets, are not an environment in which to blindly buy and hold stocks. What is unique to this investment book is how Katsenelson illustrates the history of range bound markets and the low returns to investors during these periods. Since most of today's investors only know the feast and famine of the tech bull and subsequent bust, I think they will find the notion of range bound markets, which have extended for 10 or 15 years at a clip, to be an eye opener. The charts and graphs of how this has played out over the past century cannot be found in any other investment book I have read. After spelling out its theory, the book turns practical and outlines how stocks should be bought and then unlike most investment books, it addresses how to sell stocks, too. I believe it is well worth a read and the charts and graphs alone are worth the price of the book.

As an investment professional and former securities analysis teacher, I have a decent collection of "How to invest good" books. This is a highly-readable book offering timeless mehodology about a current topic. Whether the range-bound market thesis proves correct or not, the author provides useful practical advice and interesting anecdotes which distill the essence of value-based analysis. This is not just another story about trendy but transitory investment styles, but a text that provides clear, easy to understand, step-by-step guidance for analyzing the value of a company. Serious students of value investing will want to keep it on their bookshelves for reference.