Guy M. Girardi shares the step by step how-to of his investing system and techniques in the information-packed guide The Investing Machine.
The book is a manual for investors who favor an active approach rather than a buy-and-and-hold strategy. It begins with the origins of Girardi’s system, which was inspired after he suffered large stock market losses. Subsequent chapters detail the construction and maintenance of a “machine” that generates growth and income, while protecting against risk. This figurative machine utilizes a quantitative approach, with options and margin leverage as tools and maintenance requirements that consist mainly of monitoring, buying, and selling positions to take profits or limit losses.
The author’s explanations are thorough and satisfying, but despite Girardi’s efforts to simplify his examples, they do require a reader’s willingness to follow complex, technical ideas. For example, near book’s end, several strategies that utilize options to mitigate risk are explained, such as the Zero-Cost Collar and The Short Strangle. Charts, graphs, and dollar values are used so that their functions within the larger system can be understood.
As per the title, Girardi draws ongoing parallels to machines, referencing schematics, circuit breakers, flywheels, safety glasses, etc. While these may resonate most with other systems engineers, the comparisons are simple and apt enough that even non-engineers can benefit.
A wide variety of subjects are touched upon. AI is addressed as a potential tool, with an enlightening analysis of its abilities and limitations pertaining to investing. The book also discusses lesser-known investment measures such as Gamma, Theta, Vanna, and Vega. A glossary lists these and many other financial terms, while a Troubleshooting Matrix at the end of later chapters offers answers to questions that may arise. A final assessment includes ten questions about topics discussed in the book, with detailed answers provided.
Overall, this is a complex, fascinating, and well-researched investment guide. Even readers who don’t plan to implement these strategies will learn much from Girardi’s discussions.
Also available in hardcover and ebook.