If you read my review of The Big Money, you know that I didn't give it a great rating. Nevertheless, the author of the book, Fred Kobrick, agreed to complete an interview with me. I have to admire him for that -- for the fact that he wanted to explain what his book was about and why people should read it. So without further ado, here's part 1 of Free Money Finance's interview with Fred Kobrick, author of The Big Money:
Free Money Finance (FMF): Your background is quite impressive. Can you give Free Money Finance readers a quick overview of your career and accomplishments?
Fred Kobrick (FK): I started as a security analyst at Wellington, out of Harvard Business School, covering airlines, restaurants, and some technology. Early on, I was given some money to manage. I loved finding great CEOs, and that is how I developed relationships with some of the world’s best, as their companies came public. My experiences led me to a focus on the key things that make companies and stocks great, and my performance benefited increasingly. Identifying great stocks early and having knowledge to buy more in terrible markets helped me to have one of the 5 best public mutual fund records in the country for 15 years, and be one of Money Magazine’s Six Funds of the Decade, and later, to be the only manager to ever win USA Today All Star Fund of the Year more than once (1998, 1999).
FMF: What led you to write The Big Money?
FK: I had great mentors and so naturally loved giving back, and teaching graduate students. I could see that all the frustrations and questions of students, professionals, and average investors centered on a few things that were all the same for virtually everyone—they did not know how to stop beating themselves, and they did not know a simple system of identifying growth stocks that would lower risk and work, and be done by anyone in a practical way. I realized that I could make it truly work for people if they could see that investing could be simple and fun. Thus, I wrote a book teaching my simple identifying factors (BASM) by the case method (stories).
FMF: Tell us in your own words what the book is about.
FK: Two things. First, the Seven Steps are simple ways that investors can overcome the biggest problem out there—beating themselves, as emotions and lack of knowledge and lack of patience overwhelm what they read and try to do with stocks. The Seven Steps can be as easy and natural as using both your arms and legs while running—one just needs to know what to do.
Secondly, instead of using the information age to speed up the investing process and enrich it, investors are being overwhelmed—they lack focus of what to do, so they try to do everything, and fail, and go back to gambling or just give up all too often. Four factors to focus on simplifies and employs an investor’s common sense instead of using formulas that look deceptively simple, but do not solve the problem of defining what will be a great company and stock going forward.
FMF: What are the core concepts of the book?
FK: Business model, assumptions by management, strategy, and management—factors termed “BASM”---define the greatest investments, and can be learned through example very easily, just as military leaders learn the great battles of the past before graduating from West Point and Annapolis. The greatest companies that either maintain their lead, or come from behind as did Nike and Microsoft and countless others, have great BASM. Investors who learn this, have knowledge, power and confidence, and are well on their way to finding the right stocks, and avoiding market timing and other foibles that constitute beating themselves.
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We'll stop here today, but be sure to come back tomorrow when Fred addresses who the book is written for and why people should buy it as well as addresses my concerns with the book.
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