Book review: Practical ideas for beating the market
Almost every fund manager says they are 'contrarian', writes Matthew Partridge. Few genuinely are. Those who go against market trends often endure periods of poor performance. That's tough for anyone, let alone a professional fund manager, even if ultimately proven right. Alastair Mundy is an exception. In the 12 years he has run money for Investec, he has consistently beaten the market. So I was looking forward to reading his book on contrarian investing, You Say Tomayto. Overall, I wasn't disappointed.
Mundy's most interesting - and practical - suggestion is that you use a checklist before making any investment decisions. Just as this helps improve surgical outcomes in hospitals, having a checklist can help counter many of the self-destructive behavioural biases inherent in our decision-making, one of the running themes of the book. His view that you should focus on the investments you see as offering the best value, rather than spreading your portfolio thin, also makes sense.
You Say Tomayto does have its share of annoying flaws. In an attempt to widen its appeal to readers outside the UK, many of the numerous references to British pop culture are footnoted. But this means the bottoms of pages are cluttered with long-winded explanations of things like Doctor Who. The editors should also have cut articles based on discussions of single companies, which add little to the collection. And the less said about the cringe-inducing cartoons scattered throughout the book, the better. But overall, it is both informative and entertaining, a rare combination, and the format makes it ideal for picking up and dipping into. The useful bibliography - a feature we'd like to see other authors copying - also adds good ideas for further reading.
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