By James Berman
Classes from the Lemonade Stand explains making an investment, shares and bonds, chance, diversification, commodities, and different occasionally mystifying themes within the context of that almost all vintage of all American companies: the nook lemonade stand.
Rooted within the basic fact that good judgment is the easiest funding software, this booklet slices very important suggestions into uncomplicated sections, sweetening them with folksy, easy-to-read language. the rigors and tribulations of lemonade stand proprietor Lucinda spotlight each inspiration from rates of interest to retirement bills to leverage. Readers examine funding fundamentals as they stick to Lucinda Lemonade Inc. alongside its candy (and occasionally bitter) trip as a start-up, from the squeeze of the 1st lemon to its preliminary inner most fairness deal and its eventual foray into tech, all within the tidy city of Lemonville.
Lessons from the Lemonade Stand simplifies funding techniques with no watering them down. A inventory, for instance, isn't outlined in monetary gibberish yet for what it really is: a slice of the enterprise that entitles the stockholder to a bit drop of each greenback Lucinda Lemonade Inc. earns.
The booklet introduces ten basic Lemonade Laws:
1) each subject within the funding international might be damaged right down to the fundamental idea of offer and demand.
2) If somebody claims an funding is secure, run the opposite way.
3) larger returns suggest greater risks.
4) Hedging can assist, yet there’s continually a price to it.
5) As Warren Buffett says, "If you are clever, you don't want leverage; in case you are dumb, it will wreck you."
6) you'll no longer have the capacity to expect your shares, yet you could consistently anticipate your taxes.
7) by the point you put money into a overseas state, it just isn't overseas to you.
8) possessing a house is (still) the simplest funding of all.
9) making an investment with out paintings is playing: deal with the industry like roulette, and you can land on zero.
10) Counterintuition, now not instinct, is the investor’s most sensible friend.
Entertaining and enjoyable, classes from the Lemonade Stand offers readers with the components they should develop into savvy investors.
"By abstracting out the 'hard' stuff approximately making an investment and targeting the simplest of companies, Berman (a finance prof at NYU and an funding consultant) is ready to progressively introduce extra complex recommendations with out overwhelming the reader with jargon. rather, classes from the Lemonade Stand encompasses a lot of an introductory finance curriculum in e-book shape that reads, good, extra like a publication of fiction than one on investing."