This, if I remember correctly, was the first book about investing that I ever bought (at a Waldenbooks around 1992). It is an introductory book on stocks and was originally published (I believe) in 1969. The latest version (which claims to have the "latest" statistics and regulations) is the 8th edition, and was published in 1994. This book is completely outdated and much of the information is comprised of either useless tutorials about the inner workings of the stock exchanges (which are completely irrelevant to investors), or information that is decades old. Here are a few examples from different chapters:
CHAPTER 9. WHAT YOU SHOULD KNOW ABOUT THE NEW YORK STOCK EXCHANGE - This chapter talks about the exchange's computerized fraud-monitoring service, the requirements to be listed on the NYSE, how to become a member of the exchange, and how much a seat on the exchange costs.
CHAPTER 10. WHAT IT COSTS TO BUY STOCKS. This chapter, about commissions on stock trades, refers only to full-service brokers. It makes no mention of online brokerages (because the book was published before the internet), yet needlessly includes a detailed history of brokerage commissions during the 1970s.
CHAPTER 11. HOW THE STOCK EXCHANGE WORKS. This chapter talks about how you actually enter an order with a broker. Look at the following description of the process:
"Today, customers usually phone thier broker. . . With a computer console at their desk, the brokers can quickly give the customers the latest stock prices or call up other pertinent information."
Brokers have a computerized console which gives stock quotes? I gotta get me one of those! This chapter then goes on to needlessly educate the reader about how specialists operate. And, as if this info wasn't enough, the next chapter is entitled "More About The Working of the Stock Exchange." And later on, another whole chapter is dedicated to "How Large Blocks of Stock Are Handled". ...Anyway, you get the point.
The book moves on to cover topics like: mutual funds, buying on margin, selling short, options, futures, following the market, and so forth. These topics are explained fairly accurately in a very casual and friendly tone that helps you learn all the details without being overwhelmed. If you know absolutely nothing about stocks, you will learn something here. These sections of the book would have been enough to justify a 2-star rating, but the the rest of the book's content is so old and completely inaccurate that readers will actually have to spend additional time un-learning it.
Taking into account how outdated and simplistic this book is, the book's generally favorable reviews (especially the recent ones) might seem bewildering. But I think they can be explained.
A long time ago, when very few investors understood contemporary investing concepts (like market psychology or technical analysis), most investing books were simply reference books. They only had the ability to teach people rudimentary lessons like how the stock exchange worked, or simple definitions of the different investment products (e.g. preferred stock, muni bonds, etc). Hence, the worthless nature of this book is less a judgment about its content and more of a comment about how little people knew about stocks back in the 1970s. It's hard enough to remember the times before the internet, but imagine how little useful information was available when there weren't even any books about stocks. That's why Peter Lynch's books were considered groundbreaking and later became classics.
With that being said, when the authors published newer versions of this book for the modern era, they acted very irresponsibly by not updating the content. The publishers also should have never have printed these stale updates, but because the book has sold very well in the past, it seems to have been grandfathered into the world of contemporary investing literature, and unjustly so. The age of the book and number of editions convey a false sense of timelessness, and the seductive simplicity of the book's title and content seems to have aided it's ability to stubbornly remain in existence.
I have always been concerned that books like this that completely ignore investing strategies and market theories give prospective investors a false sense of confidence and inadvertently lead them to think that there isn't much that you need to know about the stock market in order to be successful. To illustrate this point, there are multiple reviewers on Amazon who rated the book 5-stars and stated that they had read "dozens of books" about the basics of investing. Really? 24 (at least) books on the BASICS of buying stocks? Some of the them also said that they have read the book "many times". The problem is that this once you have read this book, you should be ready to move on to something more advanced. This book is so simplistic that anyone who has read it many times is demonstrating that they don't have the ability to comprehend anything even remotely intermediate. Hence, this book is only for those who specifically don't have the desire (or ability) to really learn anything about investing, but still want to read a book so that they won't be completely clueless. I suppose this is a legitimate goal - as long as these permanent-novices realize that they shouldn't be making their own investment decisions, and don't recommend this book to other investors who may have the more noble goald of actually learning about investing.