Publisher's Synopsis
Master the most important investing skill of all-DECISION MAKING
"De-risking your investmentsrequires knowing that there ismuch you don't know."
-David X Martin
Risk exists because of one simple fact:Decisions are always based on incompleteinformation. Therefore, to meet your investmentgoals over the long term, you mustlearn to manage the risks associated with adecision-making process that is by natureflawed. Risk and the Smart Investor provides aframework for making such decisions.
Avoiding unrealistic promises of completelyrisk-free investing, world-renownedrisk management expert David X Martinfamiliarizes you with the principles of riskmanagement. Based on Martin's experiencein managing risk at several of the world'slargest financial institutions, this principlebasedapproach presents a unique perspectivethat helps you manage the risk in everyinvestment you make.
Risk and the Smart Investor provides notonly a framework for managing risk in today'smarkets, it also prepares you to handlethe next financial crisis-which is coming,sooner or later-by separating risk managementinto four separate processes:
- Assessment-know where you are,but accept the fact that you cannotknow everything
- The Rules of the Game-determineyour appetite for risk, diversifyaccordingly, demand transparency,and institute checks and balances
- Decision Making-consider allalternatives, fit your plans into specifictime frames, and always have anexit strategy
- Reevaluation-continually monitor theoutcomes of your decisions and learnfrom your mistakes
Praise for Risk and the Smart Investor
"Interesting and instructive. A good book for those who want to learn about risk and build this knowledge into their financial decisions."
-John Reed, former CEO, Citigroup
"David Martin has produced a popular yet serious post-financial crisisreflection on the fundamentals of risk management as a living process. Rich inexperience and wisdom, Risk and the Smart Investor is both a useful handbookbrimming with insights, and a moral tale for our times. Simply a must-read forevery serious investor, risk manager, and just about everyone else."
-Michael Power, professor,London School of Economics and Political Science
"David Martin knows risk and the active investor and his book proves it."
-Jerry Lieberman
"This book is like having your own mentor to guide you throughrisk management decisions."
-William Rhodes, Chairman, Citigroup and Citibank
