Vitaliy’s passion for value investing and teaching others makes Active Value Investing enjoyable as well as insightful. It is required reading for the investment team at Second Curve Capital.
“Vitaliy Katsenelson walks you through his thought processes in constructing an active value portfolio. There is not enough discussion in value investing circles about when to sell stocks, and this book advances that subject. A good balance between theoretical discussion, real anecdotes, and commonsense observations.”
A wonderful, grounded read for new and seasoned investors alike, Katsenelson explains in plain English why volatility and sideways markets are a stock picker’s best friend.
"A thoroughly enjoyable read. Provides a clear framework for equity investing in today`s sideways and volatile markets useful to everyone. Clear thinking and clear writing are not often paired - well done!"
"This book reads like a conversation with Vitaliy: deep, insightful, inquisitive, and civilized."
I never set out to write a book, much less two of them. Writing my first book was an accident, though a good one. In 2005 a friend was putting together a book. Actually he was “editing” a book – he asked a dozen professional investors to contribute chapters, and he wrote the introduction to the book and a chapter of his own. He was nice enough to ask me to contribute a chapter. I agreed. Writing a chapter was not too intimidating – I just stitched a few articles together.
By a lucky coincidence, right about that time I wrote an article for the Financial Times in which I laid out my thesis on sideways markets (though at the time I still called them“oscillating bear market”). I put a lot work into researching that topic and thought I could build on it.
I started expanding my article into a chapter, but by the time I was done the chapter had ballooned to a length equivalent to five full-grown chapters. It was too big for my friend’s book and too short for a book of my own. But I showed what I had to Wiley, and they thought I should turn it into a book. Eighteen months of hard labor, long weekends, sleepless nights, and a lot of lost hair later, I had written Active Value Investing, which was published in September 2007.
Active Value Investing was written for diehard professional investors like me – it had 75 tables and charts and was a fairly technical book, though I tried to soften it with some humor. In 2010 Wiley asked me if I’d take the “big” book and turn into a “little” one.
Wiley publishes a series of “Little Books”– think of them as investment books written for non-pros or busy executives. I was a big fan of this series. Luminaries of the investment industry like Joel Greenblatt, James Montier, Jason Zweig, and John Boggle have written books for this series.
Little Books take complex content and present it on the level of a sophisticated person who is not an investment professional. As my editor at Wiley told me, “When you write it, imagine that you’re explaining the concepts of Active Value Investing to your friend the dentist or architect.”
The Little Book of Sideways Markets was published in October 2010. In contrast to Active Value Investing,this book had only five charts and was one third the former book’s size. It is based on Active Value Investing but is a distilled and simplified version of it. It should take you about 5 hours and 17 minutes to read – I know, because there is an audible version available on Amazon.
Which book should you read? The Little Book has some advantages: it is an edited down and refined version of the big book. Also, after the big book came out, I gave hundreds of interviews and dozens of presentations on the topic. I figured out how to explain some concepts better. Though the message didn’t change– it remained solidly based on the hundreds of hours of research I did for the big book–the delivery of the message may have been refined. I also added some new concepts I picked in the interim,and I wrote two brand new chapters.
However, if you are a pro you may find Active Value Investing of interest, because it delves much deeper into the entrails of the market and value investing.