Book Review – The Monopoly Method

August 26th, 2011  |  Published in Investing  |  1 Comment

I received a free copy of The Monopoly Method: An Insider’s Guide to Navigating Wall Street and Becoming a Better Investor: Make Decisions Faster, Make Them More Profitable, and Make Them with Less Risk (Volume 1) for review. The monopoly mentioned in the title has nothing to do with the board game. (joke)

It refers to the author’s strategy of investing in companies that have monopolies or near monopolies in their industry. One example he gives is Google which has a large share of the search market. There is much more to the method than that though. The method includes a scoring system made up of eleven different variables that each receive their own value. The total score of the variables is used in determining whether the stock is a buy,hold, or sell.

I’m not an investor that does detailed fundamental research but he gave a good explanation of the different fundamentals in the scoring system that enabled me to at least have a basic grasp of the items he was discussing. He also includes some technical analysis which would take quite a bit of study for me to get a firm grasp on the subject. I think I’ll just stick to fundamentals for now.

The author also includes three case studies that are extremely helpful in understanding how to use the method. The three companies are Apple,Cisco Systems, and Wal-Mart. The method seemed to work quite well in screening these stocks but some of the variables are subjective so not every investor would end up with the same result. If you are looking for a system of researching stocks according to fundamental and technical variables that gives you a clear buy,hold, or sell result this book provides that system.

  

Responses

  1. Retirement Age Guru says:

    August 27th, 2011 at 9:54 pm (#)

    Monopoly enriches the insiders or the people controlling the market. One good example is OPEC. It is made up of a group of oil producing countries, and they can control how many barrels of oil to produce per day and increase/reduce the supply to cause the oil price to fluctuate. However, the members of the monopoly can disrupt it, when one or more of them start to not play by the rules and over-produce to gain more profits.