A good review of a book, and investing philosophy of Leon Levy, who just died: forbes.com
some exceprts from the article:
Unlike other investors, Levy does not pay too much attention to earnings, dividends and
the "story" of a stock. Indeed, he urges investors to ignore all recommendations by stock
analysts. The underlying reason: big securities firms have an ingrown bias for "overly
optimistic forecasts" whatever the true climate for investment.
Better look for out of favor stocks, he advises. Which leads Levy to what really fascinates
him: the psychological dynamics of investing. Influenced as a young man by his father
Jerome's overweening interest in economics, Levy is a scholar of the intersection between
the stock market, economics and the psychological mysteries of investors.
The collective madness that seized investors in the 1990s provides the persuasive evidence
of the rule of psychology in markets," he writes. "After all, this was a period during which
even the most sophisticated investors willingly suspended their sense of disbelief and,
perhaps even more astonishing, dismissed facts and figures staring them in the face
"If you are reluctant to sell, you are typical of American investors, who sell their winners
and keep their losers," writes Levy. "Investors do this because the act of selling at a loss is
an admission that they were wrong." |
