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Saturday, November 13, 2010

My review of Derek Foster latest book: The Idiot Millionaire

It wasn’t at the Montreal Chapters yet, so I order Derek Foster latest book online through his Web site last weekend. I am in Montreal, and I received the book on the following Wednesday. It took me a short 3 business days before being able to read the one and only useful financial book! I keep talking about Derek Foster over and over again on my blog but it’s for a good reason: Derek Foster books are what had made my profit EXPLODE! If it wouldn’t be of Derek Foster, I would still be investing in mutual funds – but mutual funds only. Would be surprise by the amount of people who had send me emails saying that Derek Foster books also help them in their financial journey.

Anyhow, this time, I am mentioning “the” name, Derek Foster, because I finish the reading of Derek Foster The Idiot Millionaire.

What’s Derek Foster The Idiot Millionaire book is about?

Well, The Idiot Millionaire is a nice continuation of Derek Foster first book Stop Working: Here’s how you can! If you a fan of the Stop Working or even if you are not aware of Derek Foster work, you can easily begin by reading The Idiot Millionaire, you won’t get lost. And actually, The Idiot Millionaire is even better because for the first time ever, Derek Foster provides the symbol ticket of the companies is taking about (because before, Derek Foster was not provided the ticket and I had to do my own search to find the ticket symbol!).

Because yes, just like in his previous books, Derek Foster provide an update version of his very own investment portfolio (very precious and valuable information!!). Also, Derek Foster propose a series of individual US and Canadian stocks for perfect, not to say “idiot”, but for people like me – and maybe like yourself who’s reading this blog right now – who are complete stranger to the stock market.

2010 mark by second year investing in the stock market and yes, even after a short but intense 2 year trading period, I still consider myself a complete idiot of the stock market. Being not sure about everything keeps me in a secure position where I can, as an “idiot” wanna be millionaire, react to anything that I wasn’t expecting – a laid off from BMO Bank of Montreal, of a 2 000 points loses from the TSX. The idiot attitude is actually the best attitude to have while investing because in the past couple of years, many events (like the 2008 market crash) had proof that even experts can be idiots. And we can certainly name here Henri-Paul Rousseau. Another stupid Quebeckers, just like my late fellow of BMO Bank of Montreal (BMO). When it come to finance, Quebeckers had no skills. Why? Because they have that super arrogant attitude toward everything. Quebeckers don’t have the “idiot” attitude and that’s why they are falling in everything they do and that’s exactly why they will keep falling. But that’s something else, isn’t

Ok, so here I am coming – back in 2008, Henri-Paul Rousseau was the president and chief executive officer of the Caisse de dépôt et placement du Québec. Actually, Henri-Paul Rousseau had been the president and chief executive officer of the Caisse de dépôt et placement du Québec for the period of 2002-2008. In 2008, following the bad management of Henri-Paul Rousseau and the heavy stock crash, the Caisse de dépôt et placement du Québec had lost more than 40 billion of dollars! Despite heavy losses, no criminal accusations had been put against Henri-Paul Rousseau. At the time of the events, Jean Charest was prime minister of Quebec – yes, the same one who had used his political power to name a few of his friends in important governmental position. The one and only Jean Charest, the one who fail to buy New Brunswick Energy Power.

In his fabulous The Idiot Millionaire, Derek Foster had made what I will consider – only from my personal point of view of course – a huge mistake. At page 51 of The Idiot Millionaire, Derek Foster name Power Financial (PWF) as a potential investment. Investing in Power Financial (PWF) would be a huge mistake! Please be aware that after leaving the Caisse de dépôt et placement du Québec in a rush in 2008, Henri-Paul Rousseau had been hired at the Power Financial (PWF) as a Vice-Chairman! Can you believe? This is the same guy who makes Quebeckers loose millions of dollars!

Power Financial (PWF) had that very conservative way to manage their business. They have a profitable business, but that’s only because the company is a major stockholder of other companies like Manuvie who currently are not doing well at all on the stock market right now.

I really appreciate Derek Foster work, but you definitively need to do your part of the search before investing! But don’t you ever worry, I am here to help you. I am going to show you “how you can” like a real New Brunswicker (because I am a real one).


Arunan said...

Derek Foster is an "idiot" because he sold all his holdings on March 2009 (at bottom), and he advised his followers to sell their stock at bottom (Toronto star March 2009). His not a youngest retiree in Canada because he is still writing books and making money from some unthinkable people like you. I like his idea, but he didn't follow his own rule. "Praying for recession" -Derek Foster (Idiot Millionaire/writer)

Anonymous said...

Just saw your book review. A big thanks to you! Derek admits he's still learning along the way and it great he is sharing his journey. The topic sounds really interesting - how to do well even while making a few mistakes along the way. I have found dividend investing along the lines he discusssed in this first two books very helpful for me personally over the past two years. I am going to get this book too and your additional insights into his book was appreciated. Luv your blog. Keep up the good work.

- EG

Avrom said...

Arunan, with all due resepct your comment that the Dividend Girl is "unthinkable" is both demeaning and rude. While you have a good point, being rude to others is not the way to do that.

The fact is the Dividend Girl has a nice small fortune, can sell off any assets to pay down her debt, and her portfolio is growing in leaps and bounds.

How about your portfolio ?

Anonymous said...

I love browsing your site because you can constantly get us new and awesome things, I feel that I should at least say a thank you for your hard work.

- Henry

Anonymous said...

Terrific work! This is the type of information that should be shared around the web. Shame on the search engines for not positioning this post higher!

Anonymous said...

It's nice to see fellow Canadians working on this most noble and worthy of pursuits: the creation of wealth.

I have but one question for the esteemed young author, do you not think it contraindicated to hold down debt and attempt the generation of capital at the same time?

Anonymous said...

Superb blog post, I have book marked this internet site so ideally I’ll see much more on this subject in the foreseeable future!

DC said...

DC comments:

Pay down debt stay away from the plastic and don't mortgage yourself to the max!!invest in good historical performing mutuals for RRSP purposes low management fees is essential. This industry needs to work on performance and fees or they are going to disappear faster than the dinosaurs! Mutual funds are ok but depend on them entirely. Dividend paying is the way to go! My number 1 tip is "action" do something that is not going to put you in more debt (as long as the investment is covering the debt ie rental income from real-estate ) as long as you sit on the sidelines your losing in today's fiat based currency!! Get moving do your research and get in the game!!Just like Foster!!!

Sunny said...

Hi DC,

I got the point. The debt I hold are for leverage purposes only (except the student loan, but I didn't pay my student loan yet because I wanted to use the money to invest). I use a credit card to pay my everyday expenses, but I pay the full amount every month. That's good for the credit score.

I am getting better at investing. I have work still to do. It's always ongoing. I agree that I have work that need to be done for the RRSP side.

It's a portfolio under construction still that you are seeing here. Hope it will only get better.


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