"It's hard to talk clearly about investing and make sense to ordinary readers at the same time. Katsenelson gives a lucid explanation of today's markets with sound advice about how to make money while avoiding the traps that the market sets for exuberant bulls and frightened bears alike." Thomas G. Donlan, Barron's

"A thoroughly enjoyable read. Provides a clear framework for equity investing in today's sideways' and volatile markets useful to everyone. Clear thinking and clear writing are not often paired - well done!" Dick Weil, CEO, Janus Capital Group

"The bible for how to invest in the most tumultuous financial market environment since the Great Depression. A true guidebook for how to build wealth prudently." David Rosenberg, Chief Economist& Strategist, Gluskin Sheff + Associates Inc.

"A wonderful, grounded read for new and seasoned investors alike, Katsenelson explains in plain English why volatility and sideways markets are a stock picker's best friend." The Motley Fool, www.Fool.com

Praise for Active Value Investing

"This book reads like a conversation with Vitaliy: deep, insightful, inquisitive, and civilized." Nassim Nicholas Taleb, author of The Black Swan

"Thoroughly enjoyable . . for the thoughtful and often entertaining way in which it is delivered. . . Katsenelson takes his reader step by step into the mind of the value investor by relating, in a fictional addendum to Fiddler on the Roof, the story of Tevye's purchase of Golde, the cow. He also describes his own big-time gambling evening (he was willing to lose a maximum of $40) and that of a half-drunken, rowdy fellow blackjack player to stress the importance of process. He then moves on to the fundamental principles of active value investing. What differentiates this book from so many others on value investing is that it describes, sometimes through the use of case studies, the thinking of a value investor. Not just his models or his metrics but his assessments. Katsenelson is an empiricist who weighs facts, looks for contraindications, and makes decisions. He makes value investing come alive. This may be a little book, but it's packed with insights for both novices and experienced investors. And it is a delight to read." Seeking Alpha

VITALIY N. KATSENELSON, CFA, is Chief Investment Officer at Investment Management Associates. While his primary focus is on discovering undervalued companies for his clients, he is also known for his uncommon common sense, which he has regularly expressed in articles in theFinancial Times, Barron's, Bloomberg Businessweek, theChristian Science Monitor, Institutional Investor, and theNew York Post, among other outlets. He speaks frequently to investment groups around the world, and was most recently profiled inBarron's in September 2009. Previously, he was an adjunct faculty member at the University of Colorado Graduate School of Business, and he is also the author ofActive Value Investing.

To read articles Katsenelson has written over the years, visit ActiveValueInvesting.com

Foreword xi

Acknowledgments xxii

Introduction xxiii

Chapter One Fasten Your Seat Belt 1

Chapter Two A Sideways View of the World 9

Chapter Three Dont Shoot the Messenger 23

Chapter Four Tevye Was a Rich Man 41

Chapter Five What We Can Learn from Gamblers 59

Chapter Six Brought to You by the Letter Q (for Quality) 65

Chapter Seven Brought to You by the Letter G (for Growth) 87

Chapter Eight Brought to You by the Letter V(for Valuation) 105

Chapter Nine Add It Up 117

Chapter Ten Nip/Tuck 133

Chapter Eleven The Born-Again Value Investor 143

Chapter Twelve Applying Darwinism to the Sales Process 161

Chapter Thirteen You Are Not As Dumbor SmartAs You Think 175

Chapter Fourteen On a Scavenger Hunt for Stocks 181

Chapter Fifteen Farewell, Blissful Ignorance 189

Chapter Sixteen Think Different 211

Chapter Seventeen I Could Be Wrong, but I Doubt It 223