Mark Slauter’s Diary of a Novice Investor is a book about one man’s first serious attempts to manage a portfolio of investments. It offers detailed and practical suggestions for new investors who don’t know where to begin. Slauter sets out his goals in the Preface:
“I wrote this book to provide insight to readers who are interested in investing, but have no previous exposure to the emotional roller coaster investing can create. I am not an analyst nor certified in any way as an investment advisor or financial planner, and I do not intend for anyone to use the information provided in this book as professional investment advice. Rather, my goal is to express my first-person experience learning about investing, and offer the read- er insight into the angst, frustration, elation, and thought-processes I experienced as a novice investor—and continue working through today.”
This is going to be a book about a great deal more than investing.
Slauter’s Diary is also the account of a son’s painful experience with his elderly parents. It is not, like the investing, something new, but rather a story as old as humanity, described in an intense narrative that tells us that there is no “technique,” no adequate approach to dementia and death. Slauter and his sister discover, as we all do, that the decline of parents is not a problem to be solved but a process to be lived through with as much love and understanding as we can muster.
It is difficult to say which narrative is the most compelling, so intertwined are the two. Slauter’s mother becomes forgetful, then begins a slide into dementia. His father, determined to take care of her, has a difficult time letting go and, in the classic marker of so many aspects of aging, he fails a driver’s test. Unexpectedly, he dies. Slauter is left with a mother who is not able to manage her investments.
The responsibility falls to him. It is a job he has never done very well for himself.
A Prologue, called “The Set Up,” tells the story, in the rawest and most personal terms, of the events in his family that led up to his struggles with the stock market and the challenge he set himself of learning enough to not only maintain his parents’ investments but to improve them, and it begins:
“Problems can be elusive creatures. Even though you may recognize a problem as it’s happening, its genesis and evolution become clearer when you stare backward through the looking glass of time. In 2008, my sister, Mary, and I knew Mom and Dad were in real trouble . . .”
A family vacation gone wrong. A glimpse into what was ahead.
Every chapter begins with one of Douglas Fuchs’ full-page illustrations and “You know you’re a Novice Investor when,” images and text both suggesting layers of meaning.
This first one remains my favorite.
What we have in hand is a book about middle-aged children and their aging parents, about self-discovery in the midst of sadness and struggle, and–oh, yes–a book about investing so thorough, such a good read, that it could be the primer for investors who will be delighted that they don’t need to reinvent the wheel.
The “Introduction” plunges us into the world of stocks and portfolios, and pages and pages of numbers, a lot of numbers, charts, tables, columns filled with numbers. I’m not a Numbers kind of girl. I’m a retired English teacher. I still sometimes count on my fingers.
Why didn’t he warn me about all these numbers?
Of the three hundred pages that comprise this book, it appears to me that far too many have charts and tables, estimates and projections all based on numbers.
But Slauter has a plan. He creates a “fantasy investment portfolio.” I had not the vaguest idea what that could be and, given my relationship with this sort of thing, I’m afraid you will have to read the book. But here’s what it says:
“The Diary of a Novice Investor emerged from a need to determine what my skill level was with investing and understand how well I could support Mom’s needs. I only knew one way how to figure these details out for her and avoid costly mistakes: I created a fantasy investment portfolio. Think of this approach as a variation on playing Monopoly where I can buy and sell Boardwalk or Park Place without using real money. Only in this instance, my game board is Wall Street.”
I have to trust the author on the use of this metaphor because I am also not a Board Game kind of girl. That said, it is a masterful piece of writing that captures you with the personal story then gives you a step-by-step path to becoming a successful investor.
Slauter keeps the reader with him every step of the way. At the end of each trial, when he has tried and failed and tried and failed again, he lays out not only his process, but a list of “Lessons Learned” and the results.
If you have never invested, or if you have dabbled in it but never been pressed to get serious, this is the book you need. It can save you a great deal of time.
Diary of a Novice Investor is a rich read, whether you are in the market for advice about investing or not. It is funny, with the kind of self-deprecating humor that brings the reader into an immediate and comfortable relationship with a writer who laughs at himself for his mistakes then comes right back and dives in again, trying one approach after another until he begins to get the hang of it.
Mark Slauter once wrote a guest blog for me. The subject he chose was “Perseverance”!!
He is confronted with the terrible decline of the very people on whom we rely, with the sudden need to figure out how to manage money, and with his own fears and uncertainties all at the same time. It proves to be hard duty and it sparks not only a dive into investing but a season of introspection. In the most difficult circumstances, here is a man who takes advantage of the opportunity to learn and to move forward. He is brutal in his honesty about himself:
“The Diary of a Novice Investor (The Bullet Train to Wealth Left When?) tells the tale of my experiences in coming to terms with Mom’s declining health and my need to learn a higher degree of financial responsibility.”
We are invited into the author’s world, a world filled with the struggle to accept what is happening to his parents, with his flashes of humor and insights, and with his growing excitement with his portfolio:
“Holy crap! The market is off about 560 points in 2 days. The Federal Reserve intimated they will be reducing the bond buying if the economy continues to improve. Here’s the dilemma: I like what I have and don’t want to sell – emotion says hold, but the head says sell; think I’ll sell on those that are still up. Maybe this will afford me an opportunity to buy some of them back cheaper. Part of the problem is the flight mentality of investors… “Well, if others are selling then I’d better sell too!””Of course, this also means I’ll have to find other new stocks to invest in. With bond rates creeping up a little I would expect my bond fund to improve but it has continued to fall. If I sell the winners, I’m stuck with the losers.”
By this point, I’m beginning to like this guy.
”When my co-workers ask me why I bring my lunch every day, I say it saves me money so I can buy more wine. This is only a partial truth, so I’ll describe it another way. Let’s say it costs me $1 dollar per day to make my own lunch, which means I spend about $20 per month for lunch. Now, if I went out to lunch and spent $5 every day, that equals $80 per month, meaning I save $60 in expenses by bringing my own lunch! This means that I could now use this money to invest $720 a year — or buy several cases of wine. The cheapest 100 shares I bought with fantasy money was only $636, and at one point, the stock was up 116%!”
The book’s true genius lies in its easy melding of two narratives–the one, an age-old tale of parents at the end of their lives; the other, the story of Slauter’s determined pursuit of mastery in the world of investing. And, as he moves through both these experiences, we hear the voice of a man who is getting to know himself in some new and important ways.
And, finally, I can avoid it no longer. Here is the very first of the charts logging in the data on Slauter’s Portfolio. For the investors among the readers of this book, this looks like risk-taking and fun. For the rest of us, I include just two more illustrations.
Bravo, Mr. Slauter and Mr. Fuchs. Diary of a Novice Investor:The Bullet Train to Wealth Left When?? lays out a measured and tested plan that might just get you to the station in time to grab your ticket on that train and, in the meantime, it’s a heck of a good read.