Winning the Loser's Game

I had the pleasure of interviewing Charley for our book.

He’s a great storyteller. He was probably the first practitioner to advocate for passive index investing. He’s a tennis enthusiast, and his book was inspired by a book he read aimed at amateur tennis players. Ellis learned that to win at tennis, the best strategy is to simply try to not lose, and to not try to act like professional players.

He realized that the same strategy worked for investors as well. That means that investors shouldn’t try to beat the market.

The biggest fear in retirement is not death, divorce, or being lonely. The biggest fear is running out of money.

Winning the Loser's Game is a classic investment book. Instead of convincing you that you can "beat the market" or time the market, the biggest lesson in this book is that low-cost, passive (i.e., indexing) is the way to win the loser's game.

Too many retirees make the mistake of quitting their job but then turn managing their portfolios into their new full-time gig. It's a sure way to lose money and to lose your mind! If you think you… show more.

This is one of the first books I read after becoming a wealth manager, and it had a huge influence on how I view the investment world. 

The title refers to the difference between amateur tennis – a loser’s game – where the winner is the player who makes the least mistakes and professional tennis – a winner’s game – where the winner is the player who makes the best shots.

Ellis argues that most investors are like amateur tennis players, playing a loser’s game where winning means limiting mistakes. Thus, for most investors, the best strategy is to avoid… show more.

This book is a classic. It starts with the observation that only a handful of tennis players in the world have the talent and expertise to play to win. For everyone else, tennis is a loser’s game – they simply don’t have the talent to play an attacking game. Instead, they must avoid losing. The same applies to investing. Only a few truly gifted and experienced investors can play to win at investing – picking stocks, timing the market, etc. Everyone else, including the majority of advisors, fund managers, and stockbrokers should be defensive – they should invest to avoid… show more.

This classic, now in its eighth edition, delivers a needed antidote to the broker- and media-promulgated delusion of easy and obvious paths to index-beating results. Ellis emphasizes less sexy methods that genuinely enhance performance. They include focusing on long-term wealth-building, holding down costs, and paying attention to tax consequences. He supports it all with up-to-date research findings.