The Little Book of Picking Top Stocks - (Little Books. Big Profits) by Martin S Fridson (Hardcover)

About the Book

"Brace yourself. You're about to see the stock market from a radically new angle. The focus of this book is figuring out which stock is going to be the year's single best performer in the S&P 500 Index. In the period studied here, those stocks have produced one-year returns ranging from 80% to 743%. You've read the standard investment approach lots of times. Financial institutions and personal wealth advisors present familiar themes: "Focus on the long term. Diversify. Stick to high-quality companies with dependable earnings and proven management." These are wise words, well worth heeding if you hope for a secure financial future. But let's face it. Those prudent principles don't even vaguely describe the actions of certain investors. A nontrivial percentage of people who buy stocks are shooting for a monster payday. Not between now and retirement in 40 years but immediately. Or sooner. They have zero interest in "hitting a lot of singles." They're swinging for a grand slam, game over, right this very inning. The instant gratification style of investing made headlines on the business page and beyond in 2021. Hordes of market newcomers became obsessed with meme stocks. The shares of a few companies with a ton of social media buzz went to the moon--and back, in some cases"--

Book Synopsis

How well does it pay to own the Standard & Poor's 500 Index's best-performing stock of the year? Over the 2012-2021 period, the one-year total return ranged from 80% to 743%. This book identifies the quantitative and qualitative traits of stocks that made it to #1 and tells the stories of how they got there. A key indicator, the Fridson-Lee Statistic, makes its debut in these pages.

Aiming for the massive upside of the #1 stocks entails substantial risk. It's not something to do with more than a small percentage of your portfolio. But attempting to pick the coming year's top performer can provide an outlet for speculative impulses that might otherwise spoil a prudent, long-term investment plan. And by investigating the statistically determined best candidates for #1, you'll gain important insights into stock selection.

The Little Book of Picking Top Stocks explains why conventional equity research provides only limited help in zeroing in on the index's future top performer. Spotting the #1 stock isn't Wall Street analysts' focus, although the information they furnish about companies' competitive strategies is quite helpful. Problematically, investment banks' fundamental stock reports are structured around a valuation metric that was discredited nearly half a century ago--earnings per share.

Author Martin Fridson's previous writings on the stock market include the books It Was a Very Good Year and Investment Illusions, as well as articles such as "Ben Graham's Value Approach: Can It Still Work?" He has received the CFA Society of New York's Ben Graham Award and has been named the Financial Management Association International's Financial Executive of the Year. The Green Magazine called his Financial Statement Analysis (co-authored with Fernando Alvarez) "one of the most useful investment books ever."

From the Back Cover

Praise for THE LITTLE BOOK OF PICKING TOP STOCKS

"Marty Fridson's 'Little' book is a recipe for 'Big' equity market returns, especially in a future where active stock selection is destined to radically outperform the passive strategy that dominated for much of the past two decades. Whether you are a seasoned professional or a novice, put this book next to the Graham and Dodd classic on value investing."
--DAVID ROSENBERG, Founder and President, Rosenberg Research

"In The Little Book of Picking Top Stocks, Marty Fridson once again shatters accepted investment axioms and uses empirical evidence and common sense to help one make more thoughtful and better performing investment decisions."
--RICH BERNSTEIN, CEO, Richard Bernstein Advisors

"For those individuals who seek the Holy Grail of investing, finding the next Google or Tesla, that monster stock, either for the intellectual challenge or they have a preference for taking big risks, Marty Fridson's book is highly readable, informative, and well researched, providing the common quantitative and qualitative characteristics of stocks that finish #1 in the S&P 500 for the year. In an engaging style he shows you why following traditional Wall Street research won't lead you to them. Whether you are a stock picker or index fund investor you will learn from Fridson's insights and stories."
-- LARRY SWEDROE, Head of Financial and Economic Research, Buckingham Wealth Partners

"Award-winning analyst Marty Fridson has made a quantum leap in how to identify top performing stocks. Serious investors take note!"
--CONSUELO MACK, Anchor and Managing Editor, Consuelo Mack WealthTrack

About the Author

MARTIN S. FRIDSON is Chief Investment Officer at Lehmann Livian Fridson Advisors, an investment management firm built on fundamental security analysis. He is co-author of Financial Statement Analysis: A Practitioner's Guide and a recipient of the CFA Society New York's Ben Graham Award.