The Bible of Compounding Money Book Review

I have read many, many books about economics and investments. What most investment advisors overlook is that, “One of the most important issues when investing is that it fits your personality and risk profile.” Andrew Abraham’s book contains many other great investment insights, which will help you improve your investment returns.
MF
Marc Faber
Marc Faber Limited


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The Author Andrew Abraham of several books “The Most common mistakes stock traders make“, “The Power to Profit with MACD indicator”, “The Bible of trend following” presented me his new book for my review.

The book clearly shows the lifetime expertise Andrew has in trading & managing investments with money managers, I would regard this book as a “Manual for Investing on Money Managers”, another aspect I find stunning is the writing methodology which the author has adopted, the important instructions on investing has been presented in this manual from very beginning & recurrently throughout. This is relatively new aspect of forceful writing handled by very few doctorates, post doctorates & spiritual gurus who wants to ingrain their key points to their reader where the readers get the point ingrained subconsciously, because of the repetition, enables readers remind at critical junctures helping them to avoid pitfalls while making decisions. Andrew has also succeeded in proving in this book how he has compounded his money with CTA’s from 1994 & how his obsessive compulsive due diligence saved him from fraudulent managers.
This book has given me lot of incredibly important insights, on how to select a money manager, focus on transparency, importance & what to focus on due diligence (Even gives detailed set of questions to be asked in due diligence), to invest in which high liquid markets that will be handy on liquidity run scenarios, how much to invest on each, power of compounding & inevitable draw downs. The author has given websites where we get information for free on money managers and is also gracious enough to list out few managers he relies based on their previous records. It’s like he has directly given the name of golden egg laying geese where we need to wait to invest during drawdowns!!
Lot of his teachings/experience are very well known to all levels of participants in the markets; however these are so important & fundamental that they cannot be afford to be missed even once. These can be written on our desks/wall posts to read it every day. I would say these are the basics of investing on money managers; failure to follow one point could devastate us tangibly & intangibly.

I deeply thank the author to give such a valuable education for free in name of review. I would request him to write more books which will enhance the readers with his experience to avoid some great pitfalls the readers could face in real time.
Regards
P.B.Pradeep
Sr.Equity Research Analyst (Buy Side: US CND & Retail)

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The book is not an academic tone; it is a light read and largely revolves around investing in managed futures and the CTA arena. It sets out a number of investing guidelines in a readable fashion: not putting more than 1% to 5% of investible capital with any one manager, the math’s of compounding and the dangers of inflation to name a few. The book contains write ups for a number of well-known trend following money managers and tables of results taken from IASG.com. There are sensible suggestions on how to conduct due diligence and to collate further information on CTAs from regulators and other sources. Andrew stresses the dangers and lack of certainty in the investing world and is right to do so. Nonetheless, he conveys quite a big feel good factor – he suggests that if you can get it right and can pick tomorrow’s winners amongst today’s CTAs, the rewards could be substantial. He looks for a 10 year track record and a 15% CAGR net of fees in his own investments and gives a number of examples of CTAs who have achieved such performance.

Easier said than done but no denying the reality of the historic performance figures provided

Anthony FJ Garner
Tradersplace.net


I just finished reading (some sections twice) your book. I loved the Dentist story - it made the book and you real. I have found that most successful people have a story like that, but don't let it out. I really liked the inclusion of yours. It made you real. Work + Passion = World Class Results, since reading this I've used it on my daughter. She is 11 and wants to play on the tennis team at her school. The story of your neighbor's son and soccer resonated big time. Be a patient investor with managed futures. I really enjoy this chapter. I've seen many investors chase program highs and sell drawdown lows. They are always losing money. Doing it in reverse would turn the tables for them. Warren Buffett - so many people forget his 50% drawdowns and multi-year recovery times. I remember articles saying his strategy was all but dead. Of course those same articles are published about trend followers too. He is now at a career high point, reminding your readers of what he went through is a great tool. I liked the introduction to each manager you selected and appreciate the attention given to me. The story behind the name sometimes gets lost and the advisor tends to turn into their track record. Providing the story keeps them human and real. I enjoyed the attention to risk. Return is great, but risk is where the game is made or lost. Great book, I thoroughly enjoyed reading it. I really needed to read it now too. It was great timing.


Justin Vandergrift
Principle Chadwick Investment Group
Commodity Trading Advisor




Andrew does it again. In this book he outlines time tested principles to be considered when investing in money managers, focusing on the importance of compounding – the key to true wealth generation in any investment business. Numerous examples are presented, adding a real-life perspective which is often lacking on this topic. An insightful, timely and fun read overall

All the best
Erico Matias Tavares
Sinclair limited