Book Review : A Zebra in Lion Country

The Book ‘A Zebra in Lion Country’ is written by Ralph Wanger who used to manage the Acorn Fund.

Ralph used to specialize in small cap investing and the book captures his experience and wisdom in the investing field.

This Book has a cult following amongst investors and its not hard to see why.

The title of the Book’s comes from the author’s comparison of fund managers to zebras. Both move in herds.The Zebra who is outside of the herd gets the freshest grass, but when the lions approach he is likely to be eaten first. The inside zebras may not eat well but they remain alive.

This explains why fund managers prefer playing it safe rather than investing in stocks that give outsized gains but carry risks as well, including career risk.

The author makes a case for investing in small cap stocks-they are easily understandable, the owners are accessible, they can grow more and are under-researched.

He also makes a good case of his investing philosophy -GARP-Growth at a Resonable Price.I believe GARP was a concept introduced by the first time in this Book.

One aspect of his investing style which I found very interesting was his concept of themes.He would identify a theme (or mega trend) that will play out in the coming years and would buy a basket of stocks in that theme.

With hindsight bias,such an approach could have yielded handsome dividends in the  Indian chemicals space when China clamped down on it’s own polluting industries.

Another interesting insight was that instead of investing in technology companies, invest in companies which can benefit from the technology. Our private banks come to mind here.

Another insight was that don’t invest in companies whose competitors are run by geniuses/ferocious folks. 

Written in a breezy humorous style,this book was published in 1997 around 20 years back.But yet, it still feels fresh and insightful

Just goes to show that nothing changes in the markets….the players change, the stocks change but human emotions of greed,fear,despair and hope remain the same.

I would strongly recommend this Book for those interested in the markets especially small cap investing. 


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