Valuing Wall Street: Protecting Wealth in Turbulent Markets [Paperback]

There's a joke going around the investment community: "You know the definition of a long-term investment? It's a short-term investment gone bad." In this absolutely delightful, easy-to-read book, authors Andrew Smithers and Stephen Wright argue downright investment heresy: maybe long-term, buy-and-hold strategy is not the most winning strategy available to investors today. And while they do not argue that in-and-out day trading is the answer, their suggestion is for investors to use "Tobin's q" to determine when to be in or out of the market. Tobin's q was devised by James Tobin in 1969, for which he won the Nobel Prize in economics. The "q" is a measure of stock market value to the actual value of the underlying assets of the firm. In times of high q, investors should sit out of the market, whereas in times of low q, investors should wade back in.

According to the authors, "the benefits of long-term equity investment have been dangerously oversold by harping on long-term returns, while failing to point out that this long-term is simply too long for most investors". Indeed, their aim is not to tell you how to make money, but instead to show you how to avoid losing it. They claim that today's market q value is so dangerously high that preserving wealth--and not trying to find the next hot shot Internet penny share--is paramount.

Valuing Wall Street is a thought-provoking work which compares the use of price/earnings ratios, dividend growth models and dividend yield models for their predictive power in valuing markets. The authors, who have one foot in the real world (Smithers run a market consultancy firm) and one in the academic camp (Wright is a lecturer at Cambridge), dismiss stockbrokers' "Stocks are wonderful" mantra in an amusing fashion. Any serious investor, and especially those nearing retirement, would do well to read this book. --Bruce McWilliams --This text refers to an out of print or unavailable edition of this title.

"A splendid book ...could easily be the best investment they'll [investors] make this year." - "Barron's".

A reality-check on today’s stock market with insights and tools for protecting assets using Nobel Laureate James Tobin’s q ratio.
 In-depth explanation of Tobin’s q ratio and how it relates to risk
 How to assess and measure stock market value to predict bubbles
 Tips for wealth preservation, including alternatives to stocks

A Reality Check on Today's Stock Market­­ Including Easy-to-Follow Strategies for Protecting Your Assets

When Valuing Wall Street was first published in early 2000, the straight-talking book was virtually alone in warning that high-flying stock markets were poised to collapse. Investors who believed in ­­and acted upon ­­the book's simple advice and statistical evidence were able to avoid losses of over 25 percent on the Dow and 70 percent on the Nasdaq!

Today, Wall Street remains dangerously overvalued. Let this special paperback edition of Valuing Wall Street show you how to use Nobel Laureate James Tobin's simple, well-respected, and time-proven q ratio to calculate the true value of a stock, and help you invest logically and unemotionally in the stock market­­history's greatest wealth-building machine most of the time.

Praise for Smithers and Wright's Valuing Wall Street:

"This is a serious book that deserves serious consideration from the investment community."

­­Financial Times

"A splendid book."

­­Alan Abelson, Barron's

"Andrew Smithers is one of the five best, most dispassionate, erudite analysts in the world. This is a book to read and chew on."

­­Barton Biggs

Global Investment Strategist, Morgan Stanley Dean Witter

Andrew Smithers founded Smithers & Co., Ltd., and is regularly quoted in The New York Times, Barron's, Forbes, and other important publications. Stephen Wright spent several years as head of macroeconomic forecasting for the Bank of England, and now teaches and researches at Birkbeck College, University of London.