By JLP | April 9, 2009
I read and reviewed the predecessor to Bill Schultheis’ The New Coffeehouse Investor* a couple of years ago. I was impressed with the previous edition so I was excited when the publisher contacted me a couple of weeks ago and asked me if I would read and review the new edition.
I REALLY like this book!
Why? Because it is simple and easy to understand. Bill has been blessed with the ability to make an investment book almost a page-turner—or at least an enjoyable read.
The NEW Coffeehouse Investor is somewhat larger than the previous edition. Several new chapters have been added, which I think are an enhancement:
Travels of a Coffeehouse Investor – discusses the advantages of indexing over stock trading.
Spending it – discusses the basics on how to spend your money in retirement.
Index Funds and Beyond – talks about how indexing has becoming confusing with the all the unnecessary indexes that have been developed over the last few years. Stick to the basics.
The Journey Continues – a feel-good chapter that closes out the book.
One thing that I think could have been done better in the book is when Bill discusses the importance of investing based on time horizon. He uses several graphs to show the volatility of stocks based on one-year, five-year, and ten-year holding periods. These holding period returns do not take into account inflation, which surely would have impacted the results. It wouldn’t have been such a big deal if it weren’t for the fact that these charts appear in the same chapter in which he claims INFLATION to be the biggest risk to investors. It seems kind of silly to tell your readers that inflation risk is a big deal and then show them historical returns that don’t include inflation.
Other than that, The New Coffeehouse Investor* is an excellent little book. I highly recommend it!
I’m also excited to announce that AFM readers will have a chance to win a copy of the book. I have two copies to give away. All you have to do is leave a comment, making sure you heed my two rules (I know you get tired of reading my two rules but the first time I don’t print them I’ll get called on it):
1. You must be a resident of the North America (the U.S. and Canada). I won’t ship internationally.
2. You can only enter ONE TIME.
I’ll announce the winners on Monday, April 13. Good luck!