Course: The Small Investor’s Survival Guide

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This course is designed to equip participants with the knowledge to better understand financial markets and the confidence to make better investing decisions. Play to Prosper by Yuval Bar-Or

Course Content: among others, the following questions will be addressed: What is investing? What is the investing playing field? Who are the essential and non-essential players in financial markets? What are Wall Street’s attitudes toward investors? What is the role of government? What are the basic and advanced investment instruments (stocks, bonds, funds, derivatives, hedge funds, private equity, etc)? What does the scientific evidence say regarding passive vs. active investing strategies? What are the main financial and non-financial risks investors must be aware of? Why are we often our own worst enemy when it comes to investing? How do we select a capable financial advisor? Can we invest without an advisor? How do we win the investing game?

Textbook(s): Dr Yuval Bar-Or’s book: Play to Prosper: The Small Investor’s Survival Guide (2010) will be used throughout the course.

Course Hours: Six sessions of 90 minutes each, delivered online, for a total of 9 in-class hours.

Preparation: Participants are encouraged to read relevant textbook chapters in preparation for sessions. The textbook page numbers are provided immediately following topic titles in the detailed outline, below. Participants may also be directed to selected magazine or newspaper articles.

Cost Per Participant: This course is currently free

Logistics: Participants should register for the course here. Please allow one to two weeks for arrival of book(s).

Missed sessions: Course sessions will be recorded and our intention is to make these recordings available to participants for 30 to 45 days after their original broadcasts.

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Outline of individual sessions


Below is the anticipated course coverage. The instructor reserves the right to amend coverage as necessary to ensure the most important items are covered. Any sections not covered in class should be read by participants on their own.

SESSION 1: THE INVESTING GAME

Introduction: why do we use Game and Play analogies?

The Investing Game basics

· The Small Investor (You) 13

· The Other Players (Everyone Else) 14

· Who Is on My Team? 16

· The Playing Field 17

· The Basic Game Pieces 20

· How is the Game Played? 25

· Who is the Referee? 25

· Game Terminology 26

· The End of the Game 27

· Winning the Game27

· Can I Stop Playing?28

· Call to Action 28

SESSION 2: THE PLAYERS (MOTIVES AND ATTITUDES)

Essential Players

· Small Investors 37

· Industrial Corporations 39

· Entrepreneurs 39

· Government Entities as Issuers 40

· Government Entities as Referees 40

· In the Gray Area 41

The Coaches

· The Basic Functions of Advisors 46

· The Fundamental Characteristics of Advisors 48

· Why Do Some Advisors Destroy Value? 52

· Avoiding the Bad Advisors 61

· Finding the Good Advisors 62

· Trust But Verify 63

· A Case of Customized Coaching 67

Non- essential Players (intermediaries, middlemen)

· Game Piece Builders (Banks, Fund Managers, Insurance Firms) 70

· Casino Dealers or Sports Agents (Brokers) 75

· Quality Control (Rating Agencies, Auditors, Media) 77

· Professional Players (Institutional Investors) 83

· The Medical (First Aid) Unit 91

· How Intermediaries Entered the Picture 94

· Who Is on My Team? revisited 98

Player attitudes

· “We Are Masters of the Universe” 103

· Money Talks and BS Walks 103

· Time is Money 103

· Only One Thing is Worse Than Losing the Client’s Money… 104

· Money Doesn’t Grow on Trees 104

· Caveat Emptor 104

· It Ain’t Cheating if You Don’t Get Caught 105

· There’s a Fool in Every Market 105

· Go Where the Money Is 106

· It’s Better to Be Lucky Than Smart 107

· It’s Better to Look Good Than to Be Good 108

· Stick with the Pack 109

· Ignorance Is Bliss 110

· Complexity Rocks! Transparency Sucks! 110

· Suspicion Means Survival 111

· Some Examples 112

· A Call to Action 115

Refereeing the game

· Governmental Monitoring & Enforcement 118

· Professional Industry Groups 123

· Internal Compliance Departments 125

· Consumer Activists 126

· An Example of Regulatory (In)Action 127

· A Call to Action 129

SESSION 3: GAME PIECES

Basic game pieces

· Equity or Publicly Traded Common Stocks 133

· Bonds (Debt or Fixed Income) 136

· Cash (Money Market Instruments) 140

· Preferred Stock 140

· Mutual Funds 141

· Exchange-Traded Funds 144

· Issuing Stocks vs. Bonds: Amazon.com 145

· A Word of Caution 148

Advanced game pieces

· Real Estate 151

· Private Equity 152

· Commodities and Natural Resources 153

· Absolute Return Investments (Hedge Funds) 154

· Derivatives 155

· Fancy vs. Basic Game Pieces 155

SESSION 4: PLAYING THE GAME

A dose of reality

· The Dismal Science 159

· What We Do Know 164

· Some Examples 170

· The Way Forward—Passive Investing 173

Game risks and hazards

· What is Risk? 177

· The Role of Risk in Games 178

· Risk and the Investing Game 178

· Risks for the Small Investor 179

· Leadership Risk 187

· Risk Reduction Alternatives 194

· Reducing Risk through Better Leadership and Decision Making 199

SESSION 5: WINNING THE GAME

Game psychology

· Our Destructive Emotions 203

· Barriers to Decision Making 208

· Overcoming Barriers to Decision Making 230

· Some Words of Caution 239

Winning the game

· Redefining Victory 241

· Winning Moves 243

· “Give Me a More Specific Game Plan” 257

· How About Being a Bit More Hands On? 263

SESSION 6: LEVELING THE PLAYING FIELD

· Seek Knowledge 270

· Demand Change 270

· Change Demand 284

· Change Supply (Encourage Disintermediation) 295

· A Common Theme—Transparency 306

· If It Ain’t Broke, Don’t Fix it 307

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