David X Martin’s first book, Risk and the Smart Investor, covers the principles of risk management and focuses on the most important skill of decision-making.
The reviews are in:
“A good book for those who want to learn about risk and build what they learn into their financial decisions.”
– John Reed former CEO and Chairman,Citigroup and former Chairman, New York Stock Exchange
“David Martin has produced a popular yet serious post-financial crisis reflection on the fundamentals of risk management as a living process. Rich in experience and wisdom, Risk and the Smart Investor is both a useful handbook brimming with insights and a moral tale for our times. Simply a must-read for every serious investor, risk manager, and just about everyone else.”
– Michael Power, Professor, London School of Economics and Political Science
ABOUT Risk and the Smart Investor (from Amazon.com)
The most important investing skill is decision-making. Risk exists because of one simple fact: Decisions are always based on incomplete information. Therefore, to meet your investment goals over the long term, you must learn to manage the risks associated with a decision-making process that is by nature flawed. Risk and the Smart Investor provides a framework for making such decisions.
Avoiding unrealistic promises of completely risk-free investing, world-renowned risk management expert David X Martin familiarizes you with the principles of risk management. Based on Martin’s experience in managing risk at several of the world’s largest financial institutions, this principle-based approach presents a unique perspective that helps you manage the risk in every investment you make.
Risk and the Smart Investor provides not only a framework for managing risk in today’s markets, it also prepares you to handle the next financial crisis―which is coming, sooner or later―by separating risk management into four separate processes:
- Assessment―know where you are, but accept the fact that you cannot know everything
- The Rules of the Game―determine your appetite for risk, diversify accordingly, demand transparency, and institute checks and balances
- Decision Making―consider all alternatives, fit your plans into specific time frames, and always have an exit strategy
- Reevaluation―continually monitor the outcomes of your decisions and learn from your mistakes