The Four Pillars of Investing Part 1

This is a multi part series dedicated to the review of  William Bernstein's book The Four Pillars of Investing.
Numbered Page references are from the hardcover edition.

Value = Bad Companies = higher risk = higher return
Small or Emerging Markets = higher risk = higher return

Pillar One - The Theory of Investing
Chapter 1 (the history chapter)
(pg 12)
The point of this whole historical exercise is to establish the most important concept in finance, that risk and reward are inextricably intertwined.
The low prices that produce high future returns are not possible without catastrophe and risk.
Chapter 2
(pg 44)
But if you can understand the chapter's central point-that the value of a stock or a bond is simply the present value of its future income stream-then you will have a better grasp of the investment process than most professionals.

Then comes a lot of equations of market value and discounting future value to present value. 
An annuity: You can capitalize(that is, discount) its payments by a low rate – say 6%. If your payments are $30,000 a year, this is the same as owning a long bond with a value of $30,000/0.06 = $500,000. If you are older, or it is riskier, use a higher rate, making the value significantly less.

Chapter 3 is all about how actively managed funds cannot and do not beat the market, and therefore, neither can the average joe investor. Total Stock Market indexing is the the key. Sector or selective stock picking increases risk and reward. Better performance overall with an index on the market - slow and steady and earn the boring market return.