Book Description

Praise for Collateralized Debt Obligations & Structured Finance

"Caveat emptor! Never in the history of finance has this warning been more appropriate. With the development of CDOs, credit derivatives, and other esoteric structured finance techniques, market participants–the savvy as well as the novice–are exposed to a bewildering array of new ideas, concepts, and structures. Janet Tavakoli has tackled these subjects in an outstanding mixture of exposition, mathematics, and skepticism. A must-read for anyone who plans to play in these markets."
–Jack Caouette
Vice Chairman, MBIA Insurance Corporation

"A timely and comprehensive survey of the latest developments in structured finance, particularly given the rapid pace of change in the last few years. The author’s depth of knowledge and wide experience are conveyed clearly to the reader. At a time when the industry’s ability to meet the complexities of the differing requirements of market participants is under challenge from both the events of the last cycle and the authorities, the insights offered in this book are especially valuable."
–Mark Hale
Group Strategist, Ansbacher & Co., Ltd.

"Structured finance is central to the continued development of active credit portfolio management. In this book, Tavakoli not only provides an authoritative account of many of the structured finance products employed by portfolio managers, but also addresses, in a forthright manner, a number of the ‘burning issues’ affecting the industry in a post-Enron world."
–John Cross
Global Head, Portfolio Management, Standard Chartered Bank ... Read more

Reviews (31)

Collateralized Debt Obligations & Structured Finance
This book combines expertise and readability in the style of Tavakoli's "Credit Derivatives". I would expect it to become a classic in this market as is her other book in the credit derivatives market. This book has particularly nice coverage on SPEs. Her explanation of the evolution of CDOs from balance sheet deals to arbitrage deals includes lots of practical examples and clear graphics.

Tavakoli's insights are especially valuable when highlighting caveats introduced by the rapid growth of credit derivatives technology in structured finance. She recommends structural approaches to getting fair value for both structurers and investors. Much of the information on synthetics is new material, and losses that are just now being realized in the market place might have been avoided had this book been available six months ago.

Tavakoli also predicts products that will wane and the products that will experience a growth spurt - such as the secured trust -in the Basel 2 environment.

Authoritative and Clear Account of Structured Finance
I noticed the same reviewer seems to have posted multiple negative reviews for this book and Tavakoli's credit derivatives book. One of the reviews echoes the words of a fellow who is coming out with his own books on these subjects, so there may be a motive of self-interest. In that respect the one and two star reviews may be a form of envious homage.

I'm a 5-year veteran in credit derivatives trading. I hedge synthetic collateralized debt obligations (CDOs) and manage the risk for single tranche CDOs. I was very glad to receive this book and like it as much as Tavakoli's book on credit derivatives. Tavakoli clearly defines terms. She then clearly explains the products. There are many aspects of the structuring I wasn't aware of that are explained as an entertaining read in this book. Our structuring group liked this book as much as I did, and bought copies for everyone on the desk, and bought copies for customers.

I work for one of the well managed banks that has been providing good value for customers, but I was happy to see Tavakoli talk about how customers have often been ripped-off and she suggests how customers can avoid this - for instance by dealing with my bank. I liked the way the various structures are explained from the bottom up. Tavakoli makes it seem easy to understand the various complex components and the structural options.

The section on language and gaming is especially important. The debate on deal managers both for and against, and the inconsistency of the rating agencies both internally and externally is clearly explained. That isn't necessarily a bad thing, since we want rating agencies to take independent views, but it is important to realize that discrepancies in the approach to rating structured products exist. Tavakoli did an excellent job of explaining this so that there are no misunderstandings.

I also enjoyed the account of non-CDO structured finance products, since I may gravitate to the structuring side of the business in future.

Excellent Resource for Investors
For investors who need to know more about structured finance including new synthetic securitizations using credit derivatives technology, this book is a great resource.

Required Reading
Collateralized Debt Obligations should be required reading for investors in the CDO market. Tavakoli gives a thorough overview of the market and explains the relative value traps and opportunities. Tavakoli explains several different kinds of possible structures in which cash flows can be diverted to either the detriment or the benefit of investors. The recommendations for the structural protections that investors should ask for repay the cost of the book - and the valuable time you take to read it - several thousand fold.

Rating agencies have a difficult time rating tranches of several structures and as an investor, I wasn't aware of these discrepancies before. This book makes major strides in improving transparency in structured finance.

Collateralized Debt Obligations and Structured Finance
Strange how the reviewer(s) from NY, SF, and London (who rank this book with 1 or 2 stars) all write in the same style, all are anonymous once and identified once, and the same reviewer(s) wrote essentially the same reviews on Tavakoli's 2001 book. Who is gaming whom? My first impression of this book is good - I have only skimmed it so far - but I believe it is worth my time for a thorough study. No, I am not a 'trainee' - I have been trading commodities and currencies since the mid 1970s. ... Read more

Reviews (1)

A practical guide for the manager
I first used this book as a student-I found it useful then, today I insist that all managers reporting to me review, and use, the concepts and techniques provided by the authors.

The book is useful, in that concepts are well explained, the examples are relevant, but most important for me is that it provides managers who have little or no experience in determining project costs with a handy means (including formulae and worked examples) of doing so.

I have tried to get copies of the most recent edition, the popularity seems to be such that the book is sold out. I most readily recommend this to anyone who needs to justify capital expenditure, who needs to do project costing, and who has to prepare proposals for submission to the boss (or the board of directors)in order to obtain funds for capital expansion, refurbishment or simply equipment upgrades. ... Read more

Book Description

This book offers a unique combination of practical valuation techniques and the most current thinking to provide an up-to-date synthesis of valuation theory as it applies to mergers, buyouts, and restructuring. It includes detailed treatments of such topics as free cash flow valuation, valuation of leveraged buyouts, Real Option Analysis as applied to entry and exit decisions, valuation of special offer structures, and more. ... Read more

Book Description

The Third Edition of this highly regarded reference offers unrivaled single-source coverage of the financial aspects of construction funding. Updated to provide more current costs, address environmental concerns, and shed light on the latest methods used to fund projects, it helps readers solve the unique financial challenges facing today's construction industry. ... Read more

Reviews (2)

MBA student
Very interesting  book; very easy to read.
As a small real estate investor I found it very helpful in understanding many of the ins and outs of real estate and financing, especially on the scale i would like to grow to.

A first class book on Real Estate Development
The third edition of Construction Funding by Nathan S. Collier et al is a remarkable demonstration of insight and expertise. Collier and colleagues provide an exceptionally lucid description and analysis of the process of real estate development that is accessible to non-experts while being authoritative at the same time. In addition to being an excellent text for students and others interested in careers in real estate development, this book serves as essential background for all those whose responsibilities include any part of the development process. ... Read more

Book Description

Steve Nison revolutionized the world of technical analysis when his two bestselling books introduced Japanese candlestick charting techniques to the western world. "Candles," he discovered, can signal shifts in trends and price patterns with amazing accuracy, and these "storyteller" charts also contain powerful applications for today’s volatile short-term markets.

In The Candlestick Course, Nison breaks new ground once again. From the basics through the more complex stages of pattern recognition, each chapter includes specific learning objectives, key terms, clear-cut instruction, and practical applications. Plus, each end-of-chapter quiz allows readers to perfect their charting abilities before moving on. This book is the ideal training tool for newcomers, and perfect for veterans looking to refine and hone their skills.

Focused on the needs of today’s active traders and investors, Nison:

• Provides a solid foundation to candlestick charts–reinforcing key skills as you go
• Reveals how to pinpoint critical market opportunities as they arise, by recognizing key candle signals
• Tests your ability to accurately analyze and interpret candle charts
• Demonstrates how candlestick concepts can trigger potent decision-support tools that can confirm–or enhance–buy/sell signals
• Includes a valuable "progressive charting" case study
• Ties all the aspects of candlesticks together through interactive examples and visual tests

Whether viewed as a supplement to Steve Nison’s other books and courses, or as your introduction to candlestick charting, this course book will familiarize you with the intriguing world of The Morning Star, The Hammer, The Dark Cloud Cover–and the many other powerful and precise patterns Nison shares with fellow traders and investors.

Not just a one-time read, The Candlestick Course can be used as a valuable reference source, and quick refresher course, time and again. ... Read more

Reviews (8)

Frustrating
The content of this book is good. My criticism is that the layout is badly planned. You have to refer to charts on different pages, then look at the questions on another different page, then refer to the answers on another different page etc. Lots of flipping pages back and forth, kind of ruined it for me.

Shooting Stars and Belt Holds and Dark Cloud Cover
This is a great basic primer on candlestick charting techniques by the guy who allegedly introduced it into the west fifteen years ago. All the basic one, two, and three formations from spinning tops and high wave candles to piercing lines and cloud covers to three soldiers, harami cross and evening doji stars are there. It is pretty amazing that candlesticks are so much simpler but contain more information than standard western tick and point-and-figure charts. Among the things I learned were that hammers must have shadows twice as long as the real body, and the way windows (gaps) are used for support in Japanese trading. The book is arranged with quizzes, and while repetive (and there are a couple of minor mistakes, including on one of the questions), Nisson really drives home the message. Among the things he emphasizes are that candlesticks are best for signaling reversals, and that they are best supplemented by western techniques for price targets and confirmation. Although not quite a complete novice, I'm a slow reader but it only took me three hours to read this in the library. The last part of the book takes you through a chart and points out the formations-dispelling the common critique that technical analysis is completely subjective. Highly recommended and quite a contrast to the information overload of many other trading books.

Outstanding book! A must have for any technical trader
I'm reading this book now and it's amazing how much you can learn in so short a time. This is a small book but the information and the way it's presented is outstanding. I wish all of the books that required study put their material in this format. Each section has a quiz to determine that you understand the material. Not only that but detailed answers to each of the questions is included. You're getting double re-enforced learning. While it starts with the basics of candlesticks the book concludes with real examples of applying these patterns. What's really the kicker is that Steve shows how he integrates Western charting techniques with candlesticks to greatly improve the odds in trading.

I don't expect to be a trading wizard after reading through this book but I do expect my trades will be thought out more thoroughly with the right techniques.

Get this book even if you don't use candle charts now.

very useful book
this book is more likely study guide for candlestick charting techniques. it contains a lot of useful exercises to test your understanding on candlestick. i strongly suggest to read other nison books before you buy this book. i give this book 4 stars because this book very useful and give more knowledge to understand candlestick

Learn Candlesticks
This is a wonderful book. It does exactly what it claims. I've read a lot of trading books, and this is probably the only one that I've given 5 stars. Every trader has some familiarity with candlesticks, usually just enough to get into trouble trying to use them. Candlesticks can show changes in market psychology much more rapidly than traditional bar charts, but you need to know how to properly use them before using them as a major trading tool. This book really is a course that starts with the basics, then steps you through graduated complexity to using candlestick signals to trade a historical chart. Each section is followed by a quiz, with the answers provided. The answers are actually expanded course material. I learned the difference between a valid and an invalid signal. More than that, I learned how to properly use the signals. The book moves along rapidly, without a lot of irrelevant discussion or philosophy. It stays focused on the subject. I completed it in just a few hours. Get this book! Learn how to properly use candles in your trading. This course has made a difference in my trading. What more can I say? ... Read more

Book Description

The first course in finance for finance and business majors has traditionally focused solely on managerial (or corporate) finance.Now, many schools are indicating a need to introduce these students- particularly the non-finance business majors - to the other two major components of finance - institutions and investments - in this first course but at the same level of rigor as traditional financial management texts.With Principles of Finance, Second Edition, Scott Besley and Gene Brigham begin with a discussion of the principles of financial systems and business organizations, move on to valuation concepts and corporate decision making (managerial finance).They conclude with coverage of investment fundamentals.Key chapters may be covered in a one-term course or supplemented with cases and outside readings for a two-term course. Chapters are written in a flexible, modular format, allowing instructors to cover the material in their favorite sequence. ... Read more

Book Description

"This new edition of Active Portfolio Management continues the standard of excellence established in the first edition, with new and clear insights to help investment professionals."

-William E. Jacques, Partner and Chief Investment Officer, Martingale Asset Management.

"Active Portfolio Management offers investors an opportunity to better understand the balance between manager skill and portfolio risk. Both fundamental and quantitative investment managers will benefit from studying this updated edition by Grinold and Kahn."

-Scott Stewart, Portfolio Manager, Fidelity Select Equity ® Discipline

Co-Manager, Fidelity Freedom ® Funds.

"This Second edition will not remain on the shelf, but will be continually referenced by both novice and expert. There is a substantial expansion in both depth and breadth on the original. It clearly and concisely explains all aspects of the foundations and the latest thinking in active portfolio management."

-Eric N. Remole, Managing Director, Head of Global Structured Equity, Credit Suisse Asset Management.

Mathematically rigorous and meticulously organized, Active Portfolio Management broke new ground when it first became available to investment managers in 1994. By outlining an innovative process to uncover raw signals of asset returns, develop them into refined forecasts, then use those forecasts to construct portfolios of exceptional return and minimal risk, i.e., portfolios that consistently beat the market, this hallmark book helped thousands of investment managers. Active Portfolio Management, Second Edition, now sets the bar even higher. Like its predecessor, this volume details how to apply economics, econometrics, and operations research to solving practical investment problems, and uncovering superior profit opportunities. It outlines an active management framework that begins with a benchmark portfolio, then defines exceptional returns as they relate to that benchmark. Beyond the comprehensive treatment of the active management process covered previously, this new edition expands to cover asset allocation, long/short investing, information horizons, and other topics relevant today. It revisits a number of discussions from the first edition, shedding new light on some of today's most pressing issues, including risk, dispersion, market impact, and performance analysis, while providing empirical evidence where appropriate. The result is an updated, comprehensive set of strategic concepts and rules of thumb for guiding the process of-and increasing the profits from-active investment management.

Reviews (2)

What could have been explained in 50 pages...
Grinhold and Kahn's concept of the Information Ratio being dependant on skill (i.e. the correlation between expected outperformance and real outperformance) and sqrt. breath (i.e. the number of securities a manager follows and the number of times he rebalances his portfolio) is theoretically excellent. However, in the real world these correlations and even breath are hard to measure and mostly propriatary to the manager. Yet G&K go on for 500 pages on quantitive techniques that might be interesting for those with a PhD in Risk Management.

For the average (practical) person interested in portfolio management this book is way too academic, using some 10 Greek letters and Cov, Std per page (and I'm not even talking about the technical appendices), making it very hard to read and comprehend.

Clear, efficient and useful
The book carefully develops the concepts of Portfolio Theory. Topics include: risk aversion, the Capital Market Line, the Markowitz Portfolio Selection Model, the Capital Asset Pricing Model, beta, market equilibrium, etc. Subsequent chapters cover fixed income securities, security analysis, derivatives and active portfolio management.

The book is extremely detailed and very well written. It covers more than the basics. It includes a variety of advanced theories and describes recent academic research.

A excellent choice ! ... Read more

Book Description

Designed to form the basis of an undergraduate course in mathematical finance, this book builds on mathematical models of bond and stock prices and covers three major areas of mathematical finance that all have an enormous impact on the way modern financial markets operate, namely: Black-Scholes' arbitrage pricing of options and other derivative securities; Markowitz portfolio optimization theory and the Capital Asset Pricing Model; and interest rates and their term structure. Assuming only a basic knowledge of probability and calculus, it covers the material in a mathematically rigorous and complete way at a level accessible to second or third year undergraduate students. The text is interspersed with a multitude of worked examples and exercises, so it is ideal for self-study and suitable not only for students of mathematics, but also students of business management, finance and economics, and anyone with an interest in finance who needs to understand the underlying theory. ... Read more

Reviews (3)

A very good book
This is a very good book for teaching financial mathematics. The only snag is the absence of Black-Scholes equations. The discussion of Portfolio analysis is an excellent addition.

A great introduction to financial engineering
This is a great book at a great price. As an undegraduate student reading for a degree in mathematics with financial management, I've found this textbook to be of great help in the derivative securities and portfolio theory modules I am doing this year. There is a nice balance between examples, theory, and exercises (all complete with solutions). The examples and excercises have been particularly helpful to me - they don't just illustrate and consolidate the various topics, but most importantly prepare the ground for the exciting new ideas to come. Compared to other books recommended for my mudules in mathematical finance, this is by far the most readable. What seems to be daunting mathematical theory full of unnesessary abstractions in the other books I have tried, this one has somehow managed to appear easy, indeedd almost obvious when you come to think of it (just look at pricing American options, for example!).

There are a few typos in various places and it is well worth visiting the book's web page at www.springeronline.com/1-85233-330-8 (and click on the accompanying website) for a list of corrections. At the same place, I have also located some nice Excel files that can be downloaed, with numerical solutions to case studies and excercises in the more advanced chapters - these are neatly designed and are of great help in following the text. I just wish there was even more material covered in similar Excel files.

In all respects, a great book this, and well worth spending under 20 quid.

an excellent introduction
Absolutely fantastic introduction to Financial Engineering. The first thing that strikes me about this gem is that it is very readable: the authors' writing style is straight-forward and concise, and at the same time manages to explain the concepts very well: no lecturing, no wordiness. There is a prevailing pattern of presentation to ideas: introduction, example, theorem, proof, excercise, and it works out wonderfully. The text is well integrated with equations. Well worth the money. ... Read more

Book Description

Sound, sensible advice from a hero to frustrated investors everywhere

William Bernstein's The Four Pillars of Investing gives investors the tools they need to construct top-returning portfolios­­without the help of a financial adviser. In a relaxed, nonthreatening style, Dr. Bernstein provides a distinctive blend of market history, investing theory, and behavioral finance, one designed to help every investor become more self-sufficient and make betterinformed investment decisions. The 4 Pillars of Investing explains how any investor can build a solid foundation for investing by focusing on four essential lessons, each building upon the other. Containing all of the tools needed to achieve investing success, without the help of a financial advisor, it presents:

• Practical investing advice based on fascinating history lessons from the market
• Exercises to determine risk tolerance as an investor
• An easy-to-understand explanation of risk and reward in the capital markets

Reviews (42)

Very Good Overview of Investing Principles and Applications
I am an avid fan of Bernstein and his fellow travelers in the Efficient Frontier, Sharpe, and other innovations of Modern Portfolio Theory, so I was disappointed to see so little of this valuable information included in this book. I understand that this book was meant to be less intimidating to the novice and intermdiate investor alike, and he doesn't disappoint with accessible articulation and a witty style that should appeal to every reader.

The two chapters on asset allocation, the ~one~ thing the investor is able to control, and the one thing which directly rewards the investor, doesn't explain the "frontiers" and why four assets or ten is best for the individual investor. The efficient frontier in layman's terms would have been especially helpful. On the other hand, dauntless pages were dedicated to diminishing returns (DR), which were clearly adumbrated for their importance.

Then Bernstein concentrates on Vanguard investment opportunities, with only brief reference to ETFs (exchange traded funds). Vanguard is to be commended for bringing index-investing to the fore, but Vanguard's steep minimums and stiff penalties are impediments for the smaller investor and are downright subversive to the investor who does not believe in a "buy-and-hold" theory of investing. Many ETFs are more asset specific and can be had without excess cost through a discount broker. I wish Bernstein had discussed the merits and demerits of "buy-and-hold" as opposed to, say the Fabian and other methods of entering and exiting the market on certain MDAs (moving daily averages).

I found Bernstein's lack of mention of mid cap stocks throughout the book puzzling. None of the hypothetical asset allocations in the book have any room for mid caps, which can enhance performance and reduce risk. For Bernstein, there are only large and small market capitalization - no middle capitalization. Also, foreign funds and ETFs of foreign assets (such as EFA for MSCI-EAFE index) are considered important, but get only passing and ambiguous comments. The graphs and tables are helpful for the most part, but many are out of date, and some lacked a marked differentiation in plotting more than one overlap, which made for challenging deciphering.

The writing is effusive and accessible, making it a good introductory book and a refresher for bulls and bears alike. Overall, I found the book to be a tad bit too garrulous, but easy to read and informative . My cavils and criticisms aside, this book is truly one of the best books on investment in print.

Best investment book I have ever read
A number of reviewers comment on Bernstein's aversion to active managers.

This is a point which has been demonstrated again and again in the financial literature. See especially 'A Random Walk Down Wall Street' by Burton Malkiel and both books by John Bogle. Although some managers, historically, outperform, they are not the same managers who outperform in the future. This has been demonstrated again and again with different sample periods and different data: it is the dirty secret of the investment management industry, that the rational investor would choose the low fee option.

In the institutional pension fund (defined benefit) market, where fees are *much* lower and sophisticated consultants advise the trustees, you would expect it to be much easier to select good active managers. The reality, which Bernstein addresses, is that institutional pension funds make *more* use of passive or indexed funds, than individuals do.

Bernstein's book brilliantly summarises the main points about investing for the individual investor today:

1. stock returns are likely to be a lot lower in the future, than in the past
2. fees on funds are going to be a very important influence on final returns (1 or 2% of 7% annualised returns hurts a lot more than of 13% annualised returns)
3. since it is impossible to know (in advance) who the superior fund managers are going to be, it is better to lodge the majority of money in index funds, which will provide a return, long run average, better than 2/3rds of money managers, at a far cheaper cost

But the book is much subtler and deeper than this. It looks at how we get 'valuation bubbles' like the recent dot-com/ telecoms boom, and how humans consistently make investment mistakes for deep seated psychological reasons. It helps you to look sceptically at a financial 'advice' industry, that is really there to make a living off your hard earned savings.

Bernstein's bias is towards value investing and he correctly points out that it is possible to pursue this investing style using 'value tilted' index funds, with low fees. Although value as a style has massively outperformed growth over the last 3 years (to the tune of 40% aggregate), it is still a point worth taking in. When stocks in general are expensive (as they still are on any quantitative basis), cheap stocks can still be the way to go.

Reading this book, along with David Chilton's 'The Wealthy Barber' and the books by Burton Malkiel and John Bogle, is likely to be among the most rewarding things you can do for your personal wealth, long term.

Excellent Read - Wonderful Advice
This book is for everyone from the novice investor to the most savvy investor. The author does a wonderful job of explaining concepts and ideas without getting caught up in a bunch of analytical data and graphs. I wish this book had been published when I was much younger. All young people justing getting started in the work world should take the time to read this book. It will definitely help you later. Definitely worth the time to read this book!

Win by not losing.
William Bernstein, market historian, scholar, and strategist, writes this new book with the confidence of his experience and the courage of his convictions, just as he did in his earlier "The Intelligent Asset Allocator." The work is an expansion on the theme that you cannot beat the market by timing or hiring active professional fund managers, so allocate, sit back, and enjoy the long-term ride. His advice is equally applicable to the novice as well as the veteran investor. You get a short course on what market returns you should expect, why you cannot beat the market, why the professionals can't help you, and how to set up your own portfolio using index funds. In other words, he has no use for the investment business other than the index funds it produces.
Chapter 5 on Manias is an excellent history of economic progress, and obviously the groundwork that led to his soon-to-be-published "The Birth of Plenty" (mid-2004) on the origins of the West's affluence. I particularly appreciated his credit to Hyman Minsky on the pattern of bubbles. Although Kindleberger has covered much of the same ground and with greater visibility in the press, Minsky's contributions are more insightful to understanding the distinct nature of economic manias.
Another interesting tidbit is his portrayal of technology as being, in general, a bad business endeavor. Bill Fleckenstein has made this point frequently that technology, unlike Buffett's desired "consumer monopoly," is easily outmoded and supplanted with the new, new thing. Let's just be thankful that earlier entrepreneurs took the time and the risk to create progress.
The true worth of the book comes under the heading of "Why investors lose money." This is the cornerstone of Bernstein's philosophy stating that if you can keep from losing, you will win:
(1) Instead of joining the herd mentality, get out when "everybody" knows that something is a good thing. It only means that everyone who wanted to buy already has; there are no buyers left. Prices can only fall.
(2) Overcome overconfidence by checking the performance figures. Few professionals ever "beat the market." Why do you think you can?
(3) Understand that all investments return to the mean, thus past performance is no indication of future performance.
(4) Don't trade for excitement. Look elsewhere for entertainment.
(5) Keep your eye on the long term and don't be panicked out by emotional short term swings.
(6) Realize that there are no "great companies." The 1000+% returns are few and far between.
(7) Accept that the market is random. Therefore don't get fooled into believing patterns repeat. Index funds are the only way to go.
(8) Check your accounting carefully. Don't overstate your successes while forgetting your losses. Keep track of the portfolio's total return.
(9) Don't get taken for a ride by the investment industry. Trust no one.
It gets a little trickier when he begins building portfolios. Using representative stereotypes, he sets up hypothetical investments using US stock index funds made up of large caps, small caps, large value, small value, REITs, plus Foreign securities. The remaining assets should be split up between cash and bonds (long and short). Your results will be dependent on how well you can approximate this theories. Another catch comes with "rebalancing." Bernstein's advice here is also well taken. Sell out a portion of the superior performers to bring your percentages back in line to their desired weigh in the portfolio and re-allocate those funds into the underperformers to bring their numbers up to desired percentages. Regardless of his distain for decision making, this does require skill and action on your part, but Bernstein has given you enough help to get the job done correctly.

The Best Investing Book I've Read
I began seriously investing in stocks and bonds about three years ago. Since that time, I've read perhaps a dozen books on investing. This is my favorite. It has all the elements a beginning investor needs: clear explanations of basic investing concepts; lucid and entertaining prose; a brief history of the market to illustrate for the reader both the manias and extreme pessimism that have sometimes gripped it; and, most importantly, numerous cautionary tales about the industry that helps beginners make their investment choices.

Bernstein identifies four pillars for building a portfolio: theory, history, psychology and the business. The pillar of theory is about the conceptual framework of investing. This potentially could have been a very difficult section, but Bernstein makes it very readable even though he introduces a couple of ideas he claims most brokers are not familiar with. The second pillar of history is about how markets in the West have behaved in the past. Bernstein argues this history is important to remember so that investors develop reasonable expectations for what their investment will do and recognize both the warning signs of an overheated market or the symptoms of a depressed one.

The third pillar of psychology helps the reader to combat the usual mistakes beginning investors make: excessive trading, following hot stocks and funds, high fees, overconfidence, etc. Bernstein says the investor must learn to emotionally detach him- or herself from the investing crowd while still keeping a healthy respect for all he doesn't know. The fourth pillar of business emphasizes that those who provide investment services for you are often your worst enemy to getting a decent return on your money

This is a great book, but not a perfect one. I wish Bernstein had explained some things more fully - especially in the first section of the book on theory. But what he does explain, he explains well enough to catapult the reader to the next level of understanding, should he or she choose to go there. Some critics of the book might argue that Bernstein says nothing new. This is true. But the effectiveness of the book is in the way it is presented and how it is written. I recently read John Bogle's book "Common Sense on Mutual Funds". It is a superb book, and has many (but not all) of the same points as "The Four Pillars of Investing". But it fails to engage the reader as well as this book does. ... Read more

Book Description

Learn the art and science of trading systems from professional speculators. The authors share powerful long and short trading strategies that span all time frames, including over one hundred annotated charts with commentary and rationale. The book contains a complete implementation of a professional trading platform, including dozens of TradeStation strategies, indicators, and functions. Further, advanced trading techniques such as pair trading and float trading are explained. These systems are integrated into a fully automated framework for position sizing and trade management. Finally, follow the authors as they track their stock selections throughout the week in real time.

Note: All of the free EasyLanguage code needed to run the trading systems and indicators presented in each chapter is given in Chapter 11. TradeStation is required. ... Read more

Reviews (20)

Volatility trading system is good
I give credit to these guys for providing the complete system rules for entries and exits along with some position sizing algorithms. There are many, many books on patterns, and few of them ever give performance statistics. At least with this code you can import it into TradeStation and be up and running in a matter of minutes. That said, some of the systems are good and some are not so good. I suspect that the pairs trading system might have worked when there was intraday volatility but the market has changed since then. The linear regression system (V) is good and should be applied to momo stocks. It has been phenomenal in this market, don't think I'd use it in a bear market. There is another system in the book that is even better but I'm not gonna say here. It's my bread-and-butter, so there ;-).

Great book for system traders
If nothing else, get this book for its rich code base. I downloaded the code from the TradeStationWorld site to save myself the typing. Yes, you do need to subscribe to TradeStation to use the code (the code is written in a Basic-like language for trading called EasyLanguage).

I have been a subscriber to TradeStation for a long time. The authors are generous contributors of articles and free code to the TradeStation community and are well-respected. I would check out their article that uses combinations of sentiment indicators, taken from Chapter 8 in the book.

Enjoyable reading
It's an enjoyable book. Discretionary trading strategies are incorporated into a mechanical frame by means of a Tradestation platform. Most of the systems incorporate well-known price pattern concepts, with the exception of the float analysis system. The novice trader will obtain some good ideas on how to develop a trading system, with the exception on the issues regarding testing and optimization.

Most of the systems incorporate the concept of price contraction/expansion and trading performance is mainly dependent on price volatility. These types of systems are a natural consequence of the bubble trading environment where prices surpassed normal levels of historical volatility by leaps and bounds. The trading environment is quite different now, as the recent rise in the markets is marked by low price volatility. This environment tends to favor trend following systems, something that the book does not present.

Stock selection and stop placement is a bit confusing. First, the position modelling incorporates an ATR factor of 1. The entry/exit default models call for a 0.3ATR trigger above and below the high/low. From the get go, the max. loss potential is 2*0.3+body of the bar, which in most cases will be greater than 1ATR. The exception to the case will be in the narrow range models, where the body of the previous bar may be small enough to limit stop loss at 1ATR. The other dubious issue is stock scanning and selection. It is not clear whether the authors trade the system on a stock for an extended period of time, or whether they scan the markets for stocks that meet the filtering criteria and perform a quick test to determine performance. If the latter, then the trading system works as an automated discretionary system rather than "mechanical" on its true meaning. The latter approach does not take advantage of the statistical edge of a system when only traded a few times in a certain stock, and becomes a random event.

The filtering seems somewhat very restrictive and the ATR trigger rather than the high or low of the bar is not convincing. I have developed and traded narrow range systems where the high/low of the bar works as a better triggering mechanisms. This is because of the nature of the stocks that the authors tend to favor in their selection. The filtering on the narrow range system is restrictive, and when traded on a single stock for a considerable period of time on a daily timeframe, the user might be disappointed.

But overall, the book is an excellent addition to your trading library.

Excellent sampling of Tradestation-based systems
I like this book--even though I don't have TradeStation to actually try the source code out on. It's a great nuts-and-bolts look at the actual step-by-step coding of several different sample systems. I recommend this for any novice trading system developer using the TradeStation platform. For non-TradeStation owners, I don't particularly recommend it, as many of the useful tidbits found in the explanatory parts of the book are drawn from other famous trading books. Without TradeStation, most of the book is rendered useless. Still, I was able to make use of the book because I am a programmer and can convert the tons of provided source code into Wealth-Lab Developer or Amibroker's proprietary languages. And the sample systems gave me some great ideas on how I can improve my existing systems.

Commentary from Malaysia Trading Group
Our comments as follows.

- We computerised our trading floor with pattern code.
- Need Tradestation software
- Separate CD product has good intraday indicators for 3-line break and ACD code
- Rectangle pattern work very well daily and real-time.
- Lots of free code, book cheap for this reason ... Read more

Book Description

From the man the Wall Street Journal hailed as "the guru of Revenue Management" comes revolutionary ways to recover from the after effects of downsizing and refocus your business on growth.

Whatever happened to growth? In Revenue Management, Robert G. Cross answers this question with his ground-breaking approach to revitalizing businesses: focusing on the revenue side of the ledger instead of the cost side. The antithesis of slash-and-burn methods that left companies with empty profits and dissatisfied stockholders, Revenue Management overturns conventional thinking on marketing strategies and offers the key to initiating and sustaining growth.

Using case studies from a variety of industries, small businesses, and nonprofit organizations, Cross describes no-tech, low-tech, and high-tech methods that managers can use to increase revenue without increasing products or promotions; predict consumer behavior; tap into new markets; and deliver products and services to customers effectively and efficiently. His proven tactics will help any business dramatically improve its bottom line by meeting the challenge of matching supply with demand. ... Read more

Reviews (14)

Just consultant's sales presentation in book form
This book doesn't do much to explain revenue management beyond oversimplified results and glossed over examples. It discussed neither strategy nor tactics in any way that was fulfilling

Lots of "why," but no "how to"
This book makes a good case for revenue management, but it provides virtually no information about HOW TO DO IT. It's basically a sales brochure for the author's company.

Save your money. I wish I had.

A good book to start with...
A good book to start with Revenue Management. Nothing too complicated, some vague, wordy spots though. Useful to understand the notion of Revenue Management.

Revenue Management: A Hard Core Book for Knowledge
This book was a great introductory on the theories and applications of Revenue Management in the workplace. Robert Cross combines a great deal of experience and knowledge along with actual examples of his ideas in many different business situations. For anyone who deals with complicated supply and demand models this book is great.

The reading helped me to become more aware of the different ways that revenue management can be used to help the bottom line of company profits. The book gave great examples of how we can earn more revenue dollars out of markets that we have already tapped and how to explore new markets, that at first glance may not be chasing. By using tracking and accurate historical data, we can help correctly predict where out business is going and how to best take advantage of the more profitable strategies.

The real life examples made the reading enjoyable, by showing how the theories work. He made examples of companies that are no longer in business that could have used his theories and stayed successful.

This was a book that was assigned to me to read, and with some dread I picked it up. I would say that this, while not a book to read for enjoyment, is great if you are looking to get information that you can use in real life.

Superficial coverage of a complex topic
This is a 250 page self-promoting sales book. Its essence could have been expressed in five pages; there are no concrete analytics of how the concept should be implemented at all.

Additionally, many important factors are glossed over; the manner in which market segmentation is accomplished is a foundation of revenue management, and is given lines like "you should segment your market" without any real explanation on what that means or how difficult it can be. While airline inventory (and, likewise, car/hotel/cruise inventory) is susceptible to market segmentation, it is very difficult to do this effectively in most other markets. The lack of exploration of those practices is a glaring omission, even in a book so obviously self-congratulatory in its recounts of successful endeavors by its author.

For a more thorough analysis of pricing (which is what I was searching for), I found "The Strategy and Tactics of Pricing" (Nagle, Holden) to be a much more rigorous exploration of theoretical pricing issues and their practical applications. Its basic mathematical models far surpass the overwhelming hyperbole found on most pages of "Revenue Management". ... Read more

Book Description

Praise for Financial Modeling Using Excel and VBA

"Excel and VBA have vast capabilities, yet until this book, users were on their own to figure out just how to use these tools for both single and complex financial problems. Financial Modeling fills the gaps with practical guidance to modeling a wide range of finance problems."
–Tim Koller, Partner, McKinsey & Company, Inc.

Financial modeling is an essential skill for all financial professionals and students–and Excel and its built-in programming language, Visual Basic for Applications (VBA), are the preferred tools for the job. Financial Modeling Using Excel and VBA, designed for self-study, classroom use, and reference, presents a comprehensive approach to developing both simple and sophisticated financial models in all major areas of finance using both Excel and VBA.

The book assumes only basic knowledge of finance and Excel, and no previous knowledge of VBA. From that base, it teaches financial modeling, VBA, and advanced features of Excel using a unique, simple approach that is based on the author’s twenty years of experience in financial modeling in the business world and the classroom. The book reviews all the necessary financial theory and concepts, and walks you through a wide range of real-world financial models–over seventy-five of them–that you can imitate and use for practice as well. A companion CD-ROM includes several useful modeling tools and full working versions of all the models discussed in the book, so you can be more productive.

Financial modeling is finance in action. It is both challenging and rewarding. Financial Modeling Using Excel and VBA shows you how you can both enjoy the challenge and reap the rewards. ... Read more

Book Description

A CFP® Study Guide that delivers what you need to succeed!

This quick study guide for candidates preparing to take the CFP® Certification Examination covers the bare-bones essentials needed to pass this challenging exam in a logical and easy-to-absorb manner. Covering some of the most important disciplines of financial planning–– insurance, employee benefit, investment, income tax, retirement, estate, and general planning–– this text provides a no-nonsense approach to studying that includes:

• A highly logical and efficient format
• An in-depth outline of core essentials
• Explanations of all relevant exposures complete with solutions and practical examples
• Key points, exam tips, multiple choice, and mini—case study questions
• Mnemonic devices and study techniques to reinforce key points
• A format that directly parallels the CFP Board’s topic requirements

For students who have been through the traditional CFP® educational programs and want a book that brings it all together, Rattiner’s Review for the CFP® Certification Examination, Fast Track Study Guide keeps students organized, on track, and focused on what they need to succeed. In addition to its value as a quick-reference guide to supplement all CFP® texts and self-study materials, the Guide also serves as an important one-stop resource for financial services professionals who want information in a hurry.

"Jeff Rattiner has developed yet another valuable addition to our profession. Rattiner’s Review for the CFP® Certification Examination develops an excellent, comprehensive framework to prepare a student for the CFP® exam. The breadth and thoroughness of this book encompassing all 101 topics necessary for mastery will help students excel in their test preparations. "
–Stephen P. Wetzel, CFP®
Program Director and Adjunct Professor, New York University’s CFP® program

"I commend Jeff for providing relevant information in a clear and understandable manner for anyone in or thinking of entering the financial planning field. The book brings the Certified Financial Planner Board of Standards education required 101 topics into focus. I definitely recommend the book to anyone preparing for the national certified financial planner examination."
–Kenneth M. Huggins, PhD, CFP®
Chair, Finance Department
Director, Financial Planning Certificate Program
Metropolitan State College of Denver ... Read more

Reviews (2)

I Used This Book To Pass The CFP Exam
I found this book to be an accurate and concise review of the 101 topics covered on the CFP cerfifcation exam. This book was written in a great "review notes" format, much like I would take notes on a complex subject. I would highly recommend this book as a great CFP certification exam review. It is filled with only what you need to know- no extraneous commentary.

Very useful book
This book is an incredibly detailed outline covering the vast selection of topics included on the CFP exam. Because of the outline format, I wouldn't recommend trying to use this book as a way to learn material for the first time. What it is ideal for is as a reminder of details and distinctions, improving your recall of topics learned in some prior class or self-study, but in much more detail. Because this book is updated each year, it references up-to-date tax dollar amounts you'll need for the exam. ... Read more

Book Description

Recently, reorganizations, restructurings, and bankruptcies have replaced IPOs as the common financial vehicle of the times. However, these distressed companies can still provide an avenue for profitable investing. This eagerly anticipated new reference helps guide you through this treacherous landscape in order to master the multi-move chess-like strategies required to achieve financially advantageous results for your portfolio. It is the most up-to-date and comprehensive book on the market to deal with the myriad of issues surrounding a distressed company.

Providing theoretical and practical insight, Distressed Debt Analysis: Strategies for Speculative Investors presents a conceptual, but not overly technical, outline of the financial and bankruptcy law context in which restructurings take place. The book covers the broader financial environment of the reorganization and the basic process of investment analysis and investment strategies. The author uses numerous real-world examples and case studies to emphasize important concepts and critical issues.

The developments that have created these extraordinary investment opportunities have also created tremendous demand for professionals with experience and knowledge in the restructuring process. Distressed Debt Analysis: Strategies for Speculative Investors addresses the complete knowledge needs of investors and professionals in the burgeoning world of financially distressed companies. It is perfect for bankruptcy departments of law firms, restructuring advisory groups, turnaround consulting firms, and reorganization and distressed securities departments of investment banks. ... Read more

Book Description

This updated, compact desk reference book defines and explains more than 4,000 terms related to investment. They include types of stocks, bonds, and mutual funds, as well as terms that apply to banking, corporate finance, and tax laws, including the most recent revisions in income tax law. The book also features helpful charts and graphs. ... Read more

Reviews (29)

More Than A Book
Expect this little work to be exactly what it is titled, "Dictionary of Finance and Investment Terms". It does not contain a story, or financial advice, or commonly used terms. It is a financial dictionary. Its binding is "professional softcover" and has very thin pages- required due to 600+ pages. I notice some reviewers' felt it was not worth the money. Where else can you find a professional dictionary of specialized terms for under $12 ? I found the book so useful, I purchased Barron's Investment Guide, which includes the dictionary. I recommend both of these books (...)

If your looking for an enthralling read, the Finance Dictionary is not that. If you're looking for an inexpensive, professional little reference book, full of pertinent terms and explanations, this one will definitely earn its keep.

Not Perfect, But Very Useful
When I first got into the financial field many years ago, I kept a copy of this book (an earlier edition) close at hand at all times. As I read The Wall Street Journal and Business Week, this book proved indispensible to help me understand concepts and jargon. Today, it is dog-eared, wrinkled and dirty, but I still turn to it occasionally. Yes, some of the definitions are outdated or incomplete. Yes, some terms are missing. But this is the best dictionary of financial terms I've ever seen, and I recommend it to anyone who needs an easy-to-use reference guide.

Great Tool When Dealing with Finance or Investment
Unless you work in finance and investment, it is virtually impossible to keep apprised of the terminology and jargon. Even if you do, it's probably fairly easy to come across some word that you do not know the meaning of or are uncertain as to its meaning. This handy reference book is perfect for both professionals and non-professionals who find themselves confronted with the often arcane verbiage of the finance and investment world.

This book has frequently been of personal use to me in reviewing contracts for clients, as well as helping me when I stumble across some unknown term while reading. This is a nice little tool that should be on your shelf or in your pocket the next time you talk to someone about finances, investments, or even insurance.

Not a panacea but extremely useful
I find myself somewhat amazed at the financial analysts and brokers who find this book unsatisfactory. The poignant analogy coming to mind is offering the book "Accounting for Dummies" to a CPA. Of course it is unsatisfying. A book like this is not aimed at seasoned professionals in the field; rather, it's intended audience is grounded in those with little or no exposure to the securities/financial fields.

I have been involved in securities litigation consulting for almost a decade now. As my consulting practice has grown, I have hired many individuals, most of whom are not well-versed in securities/financial jargon. In significantly all cases, these new employees feel ill-at-ease initially when reviewing case files and documentation due to the learning ramp and educational abyss. I have found if I offer them a copy of the DICTIONARY OF FINANCE AND INVESTMENT TERMS (DFIT) on their first day, the learning curve is flattened and becomes much shorter in duration. As a matter of fact, several of my employees have taken the initiative to take their DFIT home to look for particular words/phrases common to their daily routines. By derivation, this makes the employee feel much less out of place and instills some level of motivation relative to their work (this has been a definite intangible benefit to my practice).

I keep one in my office and although I don't crack it very often, there are times when I'm not as familiar with a word/phrase and then, I rely on DFIT. This is similar to the situation of reading a book, seeing a word you can pronounce and know but aren't quite certain of its EXACT meaning. Let's face it, with over 5,000 entries in DFIT, most professionals, even those entrenched in the field, will find themselves fuzzy on certain words and phrases.

While DFIT is not a panacea, it certainly fills the void. I would recommend this book for anyone new to the finance/investment fields and most professionals who deal on the fringes of these industries. ... I don't really see how one can go wrong here (particularly given that many reference offerings go for hundreds of dollars).

Endorsed by an elected treasurer.
As the elected treasurer for a Califonia county we have had this wonderful little book since its 2nd edition.

Of all the reference and resource books we have at our disposal, this book ranks the highest.

The book is updated quite often and is worth its weight in gold! ... Read more

Book Description

Market Models provides an authoritative and up-to-date treatment of the use of market data to develop models for financial analysis. Written by a leading figure in the field of financial data analysis, this book is the first of its kind to address the vital techniques required for model selection and development. Model developers are faced with many decisions, about the pricing, the data, the statistical methodology and the calibration and testing of the model prior to implementation. It is important to make the right choices and Carol Alexander's clear exposition provides valuable insights at every stage.

In each of the 13 Chapters, Market Models presents real world illustrations to motivate theoretical developments. The accompanying CD contains spreadsheets with data and programs; this enables the reader to implement and adapt many of the examples. The pricing of options using normal mixture density functions to model returns; the use of Monte Carlo simulation to calculate the VaR of an options portfolio; modifying the covariance VaR to allow for fat-tailed P&L distributions; the calculation of implied, EWMA and 'historic' volatilities; GARCH volatility term structure forecasting; principal components analysis; and many more are all included.

Market Models: A Guide to Financial Data Analysis is the ideal reference for all those involved in market risk measurement, quantitative trading and investment analysis.

... Read more

Reviews (14)

A financial Bible for both profesionals and researchers
Market Models is an essential tool for practioners who would like to gain fundamental expertise on financial modeling. Aside from the practical view, Alexander's book has got such a clear and comprehensive reading that even the most inexpert individuals can get enthusiastically involved in learning issues related to risk management, investment analysis and financial forecasting. Recent econometric techniques on time series are brilliantly applied with real examples on the finance field. The book demonstrates that the author has a great knowledge on both a theoretical as well as a practical basis on market modeling and knows how to combine the two aspects in a very intelligent way. I considered this book to be a fundamental reference for either financial profesionals and academics.

MARKET MODELS
As a Ph.D candidate in finance at the University of Quebec at Montreal (specializing in hedge funds), I believe that Market Models is the leading text in the area of financial data analysis. Professor Alexander is considered as the leader by many in this field. Her many years of experience on both sides of the Atlantic (over 10 years) in consulting on risk management and investment analysis with positions in highly respected banking firms has put together this little gem of a book (long awaited). Professor Alexander's emphasis is based on understanding concepts and implementing solutions. Her past books have been best sellers and are extensively used both in academia and by financial institutions. This book is the only one of its kind that deals with key techniques for selecting and developing models, while using the latest insights into the pricing and hedging of options. At the same time the book focuses on a linear algebraic approach as an important tool for the anlaysis of financial systems. The book nicely deals with traditional time series analysis and is explained using 1)cointegration to long short equity hedge funds and 2) high frequency data prediction using neural networks. This book is a must read for academics, risk management specialists, money managers, analysts and others looking for a clear presentation of the subject. Congratulations on a great text. Hope a second volume is on the way.

Worth the money
If you are looking for detailed rigorous mathematical development then look elsewhere, that is not the reason to purchase this book. It is targeted towards application and there it excels. I have not seen any other book on this topic that so effectively presents a level-headed applied approach that keeps the basic assumptions of the models firmly in sight.
What tool fits when is nicely discussed.

Nice book
I will consider this book as a good introduction to different ways to analyze market data (covering mainly equity but do touch on fixed income as well as currency). I would emphasize that the book model the market more from an empirical point of view. The author gives a good description of the GARCH model as well as PCA analysis. Being a fixed income derivatives trading, I find both sections particularly useful for real world trading. The risk modeling section should expand into topics other than VAR such as coherent risk measures which are more useful. The co-integration section is a must for any traders who want to trade mean-reversion or stats arbitrage.

Overall, I think that the book covers all basic to intermediate mathematics, econometrics and finance necessary for anyone who wants to model market data. The book explains how to use such model for trading, risk management as well as market data visualization / understanding.

A Lucid Essential Reference
Carol Alexander is a lucid writer and illustrator of financial models. It is a joy to find a book that is as well written as this with real-world examples. Professionals who need to refresh their model skills will make this their top book of choice. For modelers of credit derivatives needing good product descriptions, I highly recommend Tavakoli's book "Credit Derivatives and Synthetic Structures". ... Read more

Book Description

"I have always found Elliott Wave difficult to understand and more difficult to apply, but finally Steve Poser has written a book that makes sense and is born from real experience. This is not Elliott made easy but Elliott that makes sense. Hats off to Poser for creating the book the marketplace has needed for so long."
–Bruce M. Kamich, CMT
Adjunct Professor of Finance at Baruch College and Rutgers University
Past President of the Market Technicians Association

"Steve Poser is one of the few people I’ve met who can integrate Elliott Wave analysis into a normal conversation on the markets and make sense."
–Michael Kahn
Editor, Quick Takes Pro technical newsletter
Technical Analysis Columnist, Barron’s Online

Numerous books have tried to capture the essence of Elliott Wave theory, but they either made Elliott more complicated than it needed to be, or, in an effort to overcome the perceived complexity of analysis using Elliott, oversimplified the process.

In Applying Elliott Wave Theory Profitably, author and Elliott Wave expert Steven Poser takes a fresh approach to