I have enjoyed this fairly quick read of Ken Fisher's book "The Only Three Questions That Count." I won't give away what those three questions are, but just say that they have to deal with not believing the hype, and in most cases the myth, that many investors feed into (i.e. high/low P/E stock markets are bad, as well as a high federal budget deficit, high oil prices, and a weak dollar are all bad for stocks). Critical thinking is certainly the theme of this book. Though it may seem like the author is a typical contrarian, he's definitely not one to assume the exact reverse will occur from the herd mentality, just make sure you look elsewhere when everyone else is looking for that noise in the bushes. The author's point throughout this book is to turn concepts on their head. Derive an earnings yield via a P/E ratio and end up with an E/P ratio. A federal budget deficit does not lead to poor stock returns (actually the opposite is shown with supporting statistics); ever look at the return on assets from the excessive spending that leads to these deficits?
Some interesting ideas taken from this book include:
- Pay attention to the global yield curve
- 1980 Revisited
- The Wizard of Oz as monetary allegory (
- Think a 300-point drop in the Dow is bad? Why not use a Global Benchmark instead.