Take on the Street by Arthur Levitt

The sub title of this book by the ex SEC Chairman Arthur Levitt ist: _What Wall Street and Corporate America Don’t Want You to Know — What You Can Do to Fight Back_ and this exactly what he is telling you in this book. Here is a Chapter overview to help you decide if this is a book for you:

How to sleep as well as your broker

“ _Brokers may seem like clever financial experts, but they are first and foremost salespeople._ ” This is something that TMF and others have started to tell the world about a long time ago, but it is simply true. They are paid based on the commissions they generate, which can take many forms, including something called spreads, the difference between what the firm paid for something and what you will end up paying.

The seven deadly sins of mutual funds

Here he talks about fees, taxes, indexed and managed funds, culture of performance, preaching long-term to the customer and having short-term investments in the fund and misleading names.

Analyse this

How analysts analyse companies and what consulting contracts and other things their employee has with the target companies have to do with it.

REG FD: Stopping the flow of inside information

Before REG FD it was common practice to wisper numbers to analysts before actual numbers appeared. In general, CEOs tried to be nice to analysts for good recommondations and similar things. Well, since REG FD this is getting a lot harder.

The numbers game

Here Levitt goes on about accounting standards. ‘nuff said. The next chapter, beware false profits: how to read financial statements, is going on in the same direction.

Pay attention to the plumbing

This goes a bit deeper into the system how your order is being handled.

Corporate Governance and the culture of seduction

What do the boards of companies really have to do and what are they really doing? Very insightful indeed. The general question is whether boards are really independant and are working for the investors (which they should) or for the CEO (which they often are).

How to be a player

This tells you a bit more about what you can do as an investor to make this turn out well for yourself. Getting your 401(K) in shape is another chapter about … well, getting your 401(K) in order.

At the end, the book includes some wonderful letters that Arthur Levitt received over the time he was SEC chairman.

All in all, I found this book really insightful and interesting to read at the same time. The part about the 401(K) is abviously of less interest to me because I am German but it should be very interesting to everybody living and working in the US who is using such a plan for his retirement. The rest of the book should be extremely interesting though for everyone who is investing money in the stock market in any way or form.