The Long and Short of it, John Kay - Book Club Friday's (#39)

eldergill (52)in #bookclub • 6 years ago

About the Author

John Kay is one of Britain's leading economists. He has been a professor at London Business School and Oxford University and is a Fellow of St John's College, Oxford and a visiting professor at the London School of Economics (LSE). He's a fellow of the British Academy and the Royal Society of Edinburgh and a member of the Scottish Government's Council of Economic Advisors.

He was a founding Chairman of a successful business and has been a director of several financial and investment companies. For more than twenty years he has been Investment Officer of Oxford's wealthiest college. He combines academic credentials and practical experience with the ability to express complex ideas clearly along with British style of dry humour, which he does in a weekly column in the Financial Times.

He lives in London, Oxfordshire and the south of France and many of his ideas are worked out during long walks in the mountains behind the French Riviera.

A little bit about the book!

The Long and Short of it can be described as financial and investment facts and advice for normally intelligent people who are not in the industry.
It was first published in 2009 and is full of information that will be relevant for many decades to come.

The book breaks down all you really need to know about investing, and why you should be thinking about it. It provides the reader with confidence that he or she can invest on her own, without the need to seek advice from financial advisors. Basically, John Kay does a great job of simplifying an industry that fights so hard to pretend to be something it isn't, difficult. In fact, the industry is difficult to comprehend, but those professionals within it often can't explain what is going on, although they will pretend to know exactly what is happening in times of certainty and uncertainty.

I consider myself as somebody who knows quite a bit about investing, however, John Kay's book did a great job of highlighting a few areas that I do not know much about. Chapter 9 is a great example of this, it introduces you to investing strategies such as Shorting, Swaps, Futures and Options Trading. The book doesn't tell you how to do any of them... but it makes you nicely aware of what they are if you happen to find yourself in a situation to invest in derivatives in one of these ways in the future.

It was refreshing to read a book from an established, credited economist who at times, butchers the financial sector and many of the banks and financial institutions that we trust our money with. He is fearless in his approach, but also honest: I loved the part where he mentions that investing in a Subjective Expected Utility approach as opposed to a 'punter' style is far more safe in the long run because you are running on your own research and opinion, (that should be unemotional and take into account many different factors) however, he is quick to highlight that this approach doesn't necessarily mean the best life, and isn't the sexiest approach to investing... Therefore we must choose the style we wish to adopt, and to the extent that we wish to do so.

I may have mentioned some more complex ideas from the book here. But I can honestly say it is a great read for all levels of investors, and I would recommend it if you are trying to secure your future, or simply wish to understand the language of the financial industry.

Be financially aware, Be exceptional!

Adam x