How to Smell a Rat | Review

The following book review of How to Smell a Rat was written by Kelly W. Peavey – an avid reader with a less than six-figure income and minimal personal investments outside his 401k.

This is my review of How to Smell a Rat: The Five Signs of Financial Fraud by Ken Fisher with Lara Hoffmans. You are the target audience of this book if you have money to invest, and want to learn what the five signs of financial fraud are so that you can protect your investments from criminals. This book delivers what the title promises, but it is not without its faults.

The book retails for $24.95 in the U.S. Starting at the Introduction through the last printed page: “About the Authors”; it comes in at 209 pages. It’s the sixth book of author, Ken Fisher – a prominent business man in the financial sector, columnist for Forbes magazine and a billionaire. If you want a book written by an expert in the field, this gentleman seems to have the necessary credentials and experience.

First Impressions

My first impression of the book was that it was fairly thin. Upon opening the book, I found that I really liked its layout. In addition to the main chapters of the book, it includes an introduction, index, and a section with additional reading suggestions for those who want to go more in depth. It also ends each chapter with a recap. This format makes it easy to get the substance out of the text, expand your knowledge of the subject, and very quickly find items that you might want to review after your first read.

Mr. Fisher presents his five signs by devoting a chapter to each. He provides concrete steps to take in response to these signs of fraud: how to use regulatory bodies, what to look for on specific forms, and questions to ask of your prospective money managers and custodians; just to name a few things. One particular thing I found interesting is the description of different types of investor, and the importance of knowing which one you are. It seems each type can be more susceptible to certain types of fraud.

As for the basic content of this book, I found no earth-shattering revelations. To be certain, the author goes beyond basic common sense for the investor, but the major points Mr. Fisher makes are an internet search away. I know because I tried it.

Another issue I had with the book was with the actual presentation of the information. I found it a bit distracting. There’s a common wisdom, or advice, shared with those leaning how to present information. It says that you must do the following three things: tell them what you’re going to tell them, tell them, and then tell them what you told them. Mr. Fisher seems to take this idea and extend it exponentially. For me, it got to the point that the redundancy was somewhat annoying. In one particular section, in the space of two paragraphs, the same root word was used no fewer than six times.

Additionally, the “rat” metaphor got old rather quickly. There were some obvious attempts at humor in the text, both using the metaphor and also using some play on names; but, these attempts often fell flat for me. More often than not, I was distracted from the heart of the message. For me, the “hook” of the rat motif was not worth what it brought to the book.

Overall, the book was very accessible and presented some important information in a very useful format. I don’t think it’s quite worth the price of admission, though.