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Daniel Nestlerode: Dan's Book on Successful Investing

by on October 14, 2012 7:48 AM

I will soon start my 48th year in the investment business. All my years have been committed to assisting the retail investor and non-profit organizations successfully traverse the investment markets.

Over the past 48 years the nature and character of the markets have changed markedly. Most important was the early adoption of computers by my company and the industry to facilitate trading, information flow and record keeping. The investment industry is at the forefront of computer automation, efficiency and transparency despite some noted recent failures.

Four years ago, I completed a decade long plan to transition my business from the Nestlerode family to the next generation, heeding Peter Drucker’s admonition that the mark of good management is not what happens when you are at the helm, but what happens after you relinquish control. For me, my assessment is that the next generation, now four plus years into running the show is doing a great job.

With the perspective of hindsight, I have taken up writing a book about what I believe are the essential components of successful investing. I have had victories and defeats in my business career, and for me the winners have exceeded the losers. Perhaps I was just fortunate in terms of timing, entering the markets in 1965, just before a 17 year lull in the growth of the stock market, followed by an eighteen year growth period, followed again by a twelve year and counting, lull again in growth of stock prices. Let’s see, that is twenty nine years of no growth and eighteen years of exceptional growth, all punctuated with crashes and bubbles.

Distilling all this down to one thin book on investing is forcing me to focus and crystalize my thoughts on just what happened and what I believe an individual must bring to the game of investing, if one is going to be successful. As our friends in Washington note, past performance is not an indicator of future success. We all venture into the investment markets cutting a new trail with every turn we take. Yet there are, I believe, principals that help to tilt the odds in the favor of the focused participant. More importantly, I note that if you have money beyond your immediate needs, you are automatically an investor. You do not have a choice in the matter. All that matters, therefore, is whether you are winning or not.

I have three or four chapters to finish and I am laboring through a chapter on fundamental and technical analysis and portfolio management issues. Let’s see, then a chapter on selecting investments, or at least the process for selecting investments and a completing chapter wrapping up my forty eight-year career, so far. Further, I am leaving room for another chapter in case I have overlooked something useful to my readers.

To be sure I am not retiring yet as this business of investment management is never boring and always challenging. Whether anyone buys my book is rather beside the point as it has continued my education as to what it is to manage money for other people. In this business, you can never know enough. I am not smart enough even now to say I finally don’t have to learn anything more about this business. I may never be.

I suspect that the book will be done by next spring and I will certainly announce to my readers that I have some further writings they can peruse if they choose to. Hopefully the events of the next six months won’t send me back to my computer for a huge rewrite. But then with the investment markets, you can never be sure and have to continually focus on the here and now and take appropriate action. I just don’t know any better way to manage money for others or myself.

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Dan Nestlerode is the Director of Research and Portfolio Management at Nestlerode & Loy Investment Advisors in State College. A graduate of Penn State University, Nestlerode has been an investment advisor since 1965. He can be reached at danielj@nestlerode.com.
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