Issue 126 – January 2009

One is not infrequently approached on the subject of a suitable beginner?s guide to investment, mainly in the case of UKSA we hasten to add in respect of the introduction of children or grandchildren to the black art; and although for all that I know Mr. Hobson may bridle when I recommend his recent publication in this context (even if not solely in this context) I am going to stick with it – and return to the point indeed.

Of course the mainstream is what it says, that the author firmly believes that the investor can find the best ideas amongst the 2,000 or so smaller companies whose shares are quoted on the London Stock Exchange. Starting off with distinguishing the characteristics of the occupants at the smaller end of the market, he then drills down to bedrock in demonstrating how the features identified can give buy (or sell) signals, and then illustrates his thesis by a series of case studies.

And to the more experienced investor, it is the latter which will command the most attention perhaps. Given the wintry conditions prevailing in financial markets since the book was written, one braces oneself or the inevitable howlers as this or that former favourite shivers, naked now, in the breeze. But little of this is to be observed.

And for whom is the book suitable? For those wishing to take a more hands-on role certainly and going down market under their own steam. And those beginners? The trouble with most investment publications is that they are dry – whilst the tyro not only receives instruction here, but does so the real world, the world of flesh and blood, the world which, as we all know, faces the private investor indeed.

Bill Johnston