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41. Trump Strategies for Real Estate
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42. The Art Of The Start: The Time-Tested,
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43. Principles of Financial Engineering
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44. Investing for Dummies, Third Edition
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45. Fixed Income Securities: Tools
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46. Derivatives Markets
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47. Point and Figure Charting: The
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48. Fooled by Randomness: The Hidden
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60. When Genius Failed : The Rise

41. Trump Strategies for Real Estate : Billionaire Strategies Any Investor Can Apply to Deals Large and Small
by GeorgeRoss
list price: $24.95
our price: $16.47
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Asin: 0471718351
Catlog: Book (2005-02-11)
Publisher: John Wiley & Sons
Sales Rank: 212423
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42. The Art Of The Start: The Time-Tested, Battle-Hardened Guide For Anyone Starting Anything
by Guy Kawasaki
list price: $26.95
our price: $17.79
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Asin: 1591840562
Catlog: Book (2004-09-09)
Publisher: Portfolio
Sales Rank: 1079
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Book Description

What does it take to turn ideas into action? What are the elements of a perfect pitch? Howdo you win the war for talent? How do you establish a brand without bucks? These aresome of the issues everyone faces when starting or revitalizing any undertaking, and GuyKawasaki, former marketing maven of Apple Computer, provides the answers.

The Art of the Start will give you the essential steps to launch great products,services, and companies—whether you are dreaming of starting the next Microsoft or anot-for-profit that’s going to change the world. It also shows managers how to unleashentrepreneurial thinking at established companies, helping them foster the pluck andcreativity that their businesses need to stay ahead of the pack. Kawasaki provides readerswith GIST—Great Ideas for Starting Things—including his field-tested insider’stechniques for bootstrapping, branding, networking, recruiting, pitching, rainmaking, and,most important in this fickle consumer climate, building buzz.

At Apple, Kawasaki helped turn ordinary customers into fanatics. As founder and CEOof Garage Technology Ventures, he has tested his iconoclastic ideas on real- world start-ups. And as an irrepressible columnist for Forbes, he has honed his best thinkingabout The Art of the Start. ... Read more


43. Principles of Financial Engineering (Academic Press Advanced Finance (Hardcover))
by Salih N. Neftci
list price: $99.95
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Asin: 0125153945
Catlog: Book (2004-04-19)
Publisher: Academic Press
Sales Rank: 46142
Average Customer Review: 5 out of 5 stars
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Book Description

Bestselling author Salih Neftci presents a fresh, original, informative, and up-to-date introduction to financial engineering. The book offers clear links between intuition and underlying mathematics and an outstanding mixture of market insights and mathematical materials.Also included are end-of-chapter exercises and case studies.

In a market characterized by the existence of large pools of liquid funds willing to go anywhere, anytime in search of a few points of advantage, there are new risks. Lacking experience with these new risks, firms, governmental entities, and other investors have been surprised by unexpected and often disastrous financial losses. Managers and analysts seeking to employ these new instruments and strategies to make pricing, hedging, trading, and portfolio management decisions require a mature understanding of theoretical finance and sophisticated mathematical and computer modeling skills.

Important and useful because it analyzes financial assets and derivatives from the financial engineering perspective, this book offers a different approach than the existing finance literature in financial asset and derivative analysis. Seeking not to introduce financial instruments but instead to describe the methods of synthetically creating assets in static and in dynamic environments and to show how to use them, his book complements all currently available textbooks. It emphasizes developing methods that can be used in order to solve risk management, taxation, regulation, and above all, pricing problems.

This perspective forms the basis of practical risk management. It will be useful for anyone learning about practical elements of financial engineering.

* Exercises and case studies at end of each chapter and on-line Solutions Manual provided
* Explains issues involved in day-to-day life of traders, using language other than mathematics
* Careful and concise analysis of the LIBOR market model and of volatility engineering problems
... Read more

Reviews (5)

5-0 out of 5 stars All the old & all the new...
The world of finance has moved quickly, with new instruments, synthetics, cash flow instruments, and dozens of other new products. Neftci does a great job explaining all of them, pricing them, and gives wonderful examples of the uses of them. Not as academic as his other works, and I think even more helpful. A must have for those who work in the City or on the Street.

5-0 out of 5 stars Bravo!
It is such a comprehensive and reader-friendly financial engineering book! Neftci explained the complex financial concepts with plain English, simple examples and graphs. Any one with less financial background can understand the concepts with less effort. It describes and covers the most concepts that many financial practitioners may use at daily business. From Volatility surface to Greek Letters, from Convertible bond to Synthetic CDS, it provides the most financial concepts than any other books. It is one of the best reference books that are available in the industry.
Even though it explains the structured financial products, such as CDO, it will be much more valuable to the book, if it describes in more details on valuations of CDO and MBS. Since those structured financial products are started to pick up on Wall Street and becoming fashion in the financial industry at the current stage. After adding those products, the book will become the most comprehensive and sophisticated financial engineer's handbook.

5-0 out of 5 stars An excellent reference for professionnals and students
Principles Of Financial Engineering came as an excellent surprise to me, it will probably make a lot of people feel more intelligent about themselves as it explains fairly complex technicalities in a comprehensible way. Neftci book is a very good reference for market professionals like myself in need of a rapid answer, or anyone with a desire to understand more about fixed income and derivatives. Graphical illustrations enhance the text and should make it particularly easy for finance students to understand subjects like synthetic alterations using various financial instruments.

5-0 out of 5 stars A Sophisticated Treatment of FE as Actually Practiced!
The current crop of texts on financial engineering range from dull and plodding approaches to mathematically rigorous yet borderline unintelligible analyses. By changing the conventional vantage points, Neftci is able to strike a pleasing balance between intuitive justification and elegant mathematics. At the same time he is able to convey the inherent excitement of the subject with a true-to-life flavor. Practitioners will benefit by finding many of their tricks-of-the-trade justified, made explicit, and clarified. Students, on the other hand, will feel ready to march directly from the classroom to the trading floor. If you are looking for detailed mathematical proofs, this book is not for you. If you want a compendium of financial products and their properties, you will not like it either. On the other hand, if you want a sophisticated, up-to-the-minute account of contemporary financial engineering as it is actually practiced, something that has connections to the "real" world, you will thoroughly enjoy this work.

5-0 out of 5 stars A great book for financial engineering
I think, that book is the best financial engineering book ever. I believe that it will be a main text book for finance and financial engineering master- Ph.D. programs together with John Hull's book. It is useful for those who studied (or wants to study) more advanced books like Musiela's or Domiano's, as well. It is a gerat combination of theory and market practice. ... Read more


44. Investing for Dummies, Third Edition
by EricTyson
list price: $21.99
our price: $14.95
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Asin: 0764524313
Catlog: Book (2002-11-25)
Publisher: For Dummies
Sales Rank: 1170
Average Customer Review: 4.14 out of 5 stars
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Book Description

It’s been said, and too often quoted, that the only certainties in life are death and taxes. To these can be added one more: being confused by investing. But remember that no one is born with financial knowledge. It's acquired over time.

If you’ve succeeded in accumulating some money to invest, congratulations! You’ve already accomplished a feat that the majority of people haven’t done yet. But with the increased coverage of the investment world, you may think that investing times have changed. But to a large degree, things haven’t changed all that much. Investments that were lousy years ago are still considered lousy today. But the best investments for building wealth – stocks, real estate, and small business – haven’t changed.

Whether you have a modest or immodest economic means, this easy-to-use guide can help you understand how to increase your wealth by

  • Living within your means and systematically saving and investing money, ideally in a tax-favored manner.
  • Buying and holding stocks, ide ally through the best mutual funds.
  • Building your own small business or career.
  • Investing in real estate.

Equally, if not more, important is understanding and choosing investments compatible with your personal and financial goals. Nearly every professional athlete, movie star, or business big shot that gets on the evening news by making an investment blunder and losing considerable money could have – and should have – avoided the error. With Investing For Dummies, 3rd Edition, you'll discover how to do just that. You'll also

  • Cut through the jargon and get to the heart of what investments are.
  • Figure out what rate of return you can expect and how much risk you should take to get it.
  • Explore the financial markets and how you can participate.
  • Research stocks and how to best buy them.
  • Uncover the best resources to use and the experts worth listening to.

You don’t need a fancy college degree or a rich mom or dad to invest money. What you do need is a desire to practice simple yet powerful lessons and strategies. This book can help by showing you everything you need to start and maintain and investment program. ... Read more

Reviews (51)

5-0 out of 5 stars Helps you build a solid foundation for further reading
I have been investing in stocks, mutuals funds and real estate for about 8 years without ever reading a book on the topic. I bought this book to learn the nuts and bolts of investing. Despite the fact that I am not a beginner I still found the book informative. For example, Tyson says when a stock plummets don't bale out, buy some more at the lower price. I baled out of amazon.com at $11 and of course I deeply regret it now. I have since learned to hold during the bad times and now I am in profit territory with all of my stocks. He suggests that college savings accounts, such as 529 plans, may be a bad idea because it could hurt your child's chances of getting financial aid. He explains how bonds can go down in value and says instead of buying individual bonds it is better to buy bond mutual funds. I had been wary of bonds before reading this book, now I am thinking about buying a bond fund in the interests of diversification.

I didn't agree with Tyson on everything. He is more conservative than I am. I am only in my early 30s, so I believe I am young enough to take some financial risks. Also, he believes that it is a bad idea to pick your own stocks. Yet he also says that if you buy good companies and hold for several years you will always come out ahead as long as you have a diversified portfolio. I see no reason to pay a financial planner (who may put his/her own interests ahead of mine) to do this for me.

One thing I really like about the book is that he doesn't just focus on financial instruments. He also discusses investing in both real estate and small businesses. I will be buying a franchise within the next year and I found this information very helpful. Of course, I will need to do further reading on this topic.

This is an excellent book that I had a hard time putting down. If you want to learn more about investing I suggest that you start with this book. It will provide a solid foundation, and help you move onto more complicated financial books and magazines.

5-0 out of 5 stars Very good book.
Eric Tyson's Investing for Dummies in broad in scope, but still written in plain english. Even the most naive to investing can understand and apply what he writes.I also recommend Personal Finance for Dummies and Mutual Funds For Dummies.You will find these books more informative than Jane Bryant Quinn's books. What is the love affair with her anyway? I made the mistake of buying How To Make the Most of Your Money and found it to be a complete waste. Couldn't get rid of it fast enough. Read and apply Eric Tyson's great work. You'll be glad you did.

4-0 out of 5 stars Practical Introduction for Beginners
Considering that I know hardly anything about investing in stocks, real estate, etc., this book was a very good one because it introduced me to the basics. It starts with each topic on "level one" and gradually leads you to the level where you understand the topic but do not have useless information. It discusses stocks and bonds, real estate, portfolio buiding, and even the interesting psychological obstacles in investing. I thought an interesting idea was that to succeed long term in mutual fund investing, your portfolio must be diversified and well-researched. This book also discusses the pros and cons of having a financial advisor, and gives resources for more information. The book has cartoons, which add humor and taught me how investing would be applied to my life. The section of the book least applicable to me was about running and buying business, but it was interesting nevertheless. It was a great introduction to investing and I feel much more prepared than I did before reading the book.

5-0 out of 5 stars Buy the Third Edition instead of this OLD one
The Third Edition of this book is already out. Why would you buy the second edition if the third edition is newer?

1-0 out of 5 stars Lacking
There are very few good nuggets of information in this one.
I listened to the entire audio version in my car on the way to work. I didn't have to stop once to jot down anything important. ... Read more


45. Fixed Income Securities: Tools for Today's Markets, Second Edition
by BruceTuckman, Bruce Tuckman
list price: $69.95
our price: $44.07
(price subject to change: see help)
Asin: 0471063177
Catlog: Book (2002-08-16)
Publisher: Wiley
Sales Rank: 20858
Average Customer Review: 4.78 out of 5 stars
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Book Description

Praise for Fixed Income Securities, Second Edition

"What distinguishes this book from many others on the subject is that Tuckman has skillfully combined intuitive rationale with mathematical analysis to give readers a clear and deep understanding of the market. Tuckman has written a comprehensive reference book that should be found on the desks of both seasoned practitioners and novices alike." –Gerald Lucas, Senior Government Strategist, Director, Global Securities Research, Merrill Lynch

"This outstanding book offers a well-written and clear tutorial for many of the cutting-edge analytical techniques and models used in practice. Combines a wealth of institutional knowledge, practical tools, and realistic examples, while giving a clear understanding of the underlying theory." –Francis Longstaff, Professor of Finance, The Anderson School at UCLA

"An excellent reference for anyone intending to bridge the gap between financial mathematics theory and the practice of financial markets." –Marek Musiela, BNP Paribas

"This is an extremely readable book with a balance between technical detail and practical application. Unlike other books in the area, thorough and tightly knit chapters reflect Tuckmans unique background as a well-respected academic and market participant." –Tony D. Kao, Managing Director, Global Fixed Income GM Asset Management ... Read more

Reviews (9)

5-0 out of 5 stars Excellent book for novice or practitioner
Tuckman's explanations are practical and clear, his math is elegant, and examples are to the point. Either novice or professional fixed income securities trader can find a lot of interesting material in this book, and I highly recommend it.

4-0 out of 5 stars Good Book
This is very good book with introductory to medium level of description.

4-0 out of 5 stars Excellent but not the best
If you're looking for the best textbook on the subject, you need to get "Fixed-Income Securities: Valuation, Risk Management and Portfolio Strategies" by Lionel Martellini, Philippe Priaulet, and St├ęphane Priaulet.

It is the most up-to-date book on the subject. Moreover, you will get a lot of worked-out examples and end-of-chapter problems with solutions.

It is the best investment you can make on a fixed-income book.

Thank you,

5-0 out of 5 stars A great book
A great book that makes a complicated and necessarily highly quantitative subject accessible to a wider public.
Able to simply explain difficult concepts.
Probably the best in fixed income teaching.
Your money will be well spent. Congratulations to Bruce Tuckman.

5-0 out of 5 stars The best book out there...
Since all of the reviews cover the first edition, it's definitely worth noting that the 2nd edition is much improved. I've read most of the introductory books on fixed income, and none explain the market as clearly and intuitively as Tuckman. Anyone who is joining a fixed income desk or who seeks to learn more about this area should pick up this book before any others. The repo markets, interest rate and asset swaps, forwards, and futures are all covered in excellent detail. There are few discussions of duration and convexity that rival this one. Overall, this book scores high in all major areas and is highly recommended by all those I know who have come across it. ... Read more


46. Derivatives Markets
by Robert L. McDonald
list price: $135.00
our price: $135.00
(price subject to change: see help)
Asin: 0201729601
Catlog: Book (2002-09-06)
Publisher: Addison Wesley
Sales Rank: 35923
Average Customer Review: 5 out of 5 stars
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Reviews (3)

5-0 out of 5 stars Excellent Derivatives Book
The cover and page quality make this book a joy to read compared to other derivatives texts on the market.

Even more important, Dr. McDonald's writing is clear and logical. His theory is current and well laid-out. Compared to Hull it has more PDE's and sound theory. Compared to still other derivatives texts, Dr. McDonald gives more applications to supplement the theory.

If I could only recommend one derivatives texts to students and practitioners needing a thorough overview of the market, this would be the one.

5-0 out of 5 stars A brilliant book by a master teacher
Far too many books on derivatives are written by academics who claim to be writing for intelligent professionals but are in fact really trying to impress their colleagues. This book is a wonderful exception to that general rule. It is written by a master teacher who understands the importance of knowing several different ways to solve problems, and who provides numerous examples so that the reader can check his/her own answer. The book also provides software in VBA (Visual Basic for Applications) so that the reader can experiment with the results explained in the text and apply them to his/her own problems.

McDonald is very concerned to explain the intuition behind the numerous formulas presented in the text, and presents the various chapters in an expertly-designed sequence so that new results nearly always become understandable as more general ways of seeing results presented in earlier chapters. The material progresses gradually from basic to complex, so that the dedicated reader becomes thoroughly acquainted with results that have only recently been discovered. As a consequence, this textbook becomes a handy reference work to be kept at one's desk for daily use.

I came across this book more or less by accident, and as I was browsing through it I noted with particular interest several substantial discussions of how derivative pricing can be done with real probabilities so as to arrive at the same results as pricing done with the pseudo-probabilities (or risk-neutral probabilities) discussed in most texts. These sections provided an extremely important clarification of an issue that undoubtedly occurs to nearly all students of derivative pricing but is nonetheless ignored in nearly all of the relevant textbooks and literature. I knew right then that the author understood what questions were occurring in the minds of his students and how to deal with them.

This book is a bit more expensive than some rival texts, but it is entirely worth it because of its tremendous clarity and because of the software that accompanies it. In reality, this book is a bargain.

5-0 out of 5 stars Excellent Book on Derivatives Markets
I had the privilege of using the manuscript of this book for two advanced finance courses I did at Kellogg School of Management (Northwestern University---the Author's home) and just got a chance to read the final published book. This is an excellent book on derivatives markets which should appeal to three types of readers: 1) MBA students doing their first finance course on derivatives; 2) Non-finance professionals who can easily grasp quantitative aspects of derivatives pricing schemes but lack an an intuitive understanding of why, where and how derivatives are used (I was in this category until I attended Kellogg); and, 3) Corporate finance professionals trying to understand different risk management tools. Bob McDonald did a great job in maintaining a good balance between mathematics of derivatives pricing schemes and logical explanations of several economic concepts one would encounter in derivatives. This book is going to be a popular MBA text book very soon.

In the first four chapters of the book, the author assumes that the prices of different derivative securities are known and discusses how these securities can be used for insurance and speculation (Chapter 4 has a nice introduction to risk management). Chapters 5-8 explain pricing methods for futures, forwards and swaps using simple discounting models. Chapter 6 has a lucid discussion on how would "futures contract price vs. time" curves for different commodities differ based on the seasonality, transportation costs and storability aspects specific to each commodity.

Starting in Chapter 9, the author discusses different option pricing models. The material presented in Chapters 10-13, where in the author discusses binomial option pricing models, Black-Scholes formula and delta hedging, is clearly the highlight of this book. I did not find such a crystal clear discussion of binomial pricing models and the rationale behind delta hedging in any other text book. In Chapters 15-17, the author discusses financial engineering (how to create a required payoff from basic building blocks) and corporate applications of derivatives (including real options). In the remaining chapters (Chapters 18-24), I would recommend Chapters 18, 19 and 24 to all the readers. The other chapters are not really necessary unless you plan to work on developing derivatives pricing schemes.

In summary, I strongly recommend this book to every serious student of finance. ... Read more


47. Point and Figure Charting: The Essential Application for Forecasting and Tracking Market Prices, 2nd Edition
by Thomas J.Dorsey, Thomas J. Dorsey, Marketplace Books
list price: $59.95
our price: $50.96
(price subject to change: see help)
Asin: 0471412929
Catlog: Book (2001-06-12)
Publisher: Wiley
Sales Rank: 88227
Average Customer Review: 4.19 out of 5 stars
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Book Description

The classic source for the technical analysis discipline now brings readers up to date in techniques and technology
Now, in this second edition of the classic text, expert Thomas Dorsey shows, step-by-step, how to create, maintain, and interpret your own point and figure charts. He explains how you can use your findings to track and forecast market prices and develop an overall investment strategy. Perhaps most importantly, he helps you develop confidence in the market and take decisive action at the appropriate time, rather than reacting after the fact. Dorsey also highlights new developments in the field and incorporates the use of recently developed software to track any market using point and figure methods. Written for both new and experienced P & F chartists, this updated edition of a technical analysis classic brings point and figure charting into the Internet age.
Thomas J. Dorsey (Richmond, VA) is President of Dorsey, Wright & Associates, a registered investment advisory firm that uses point and figure charting as its main source of technical analysis.
... Read more

Reviews (27)

5-0 out of 5 stars A vital addition to your library.
Some people find a good thing early on and are smart enough to stick with it. I am not one of those people, but Tom Dorsey is. I've read about every TA book ever written, I've studied everything from stochastic to voodoo and back, and if someone asked me to recommend one single book for learning and successfully applying Technical Analysis in order to make money, it would be this book. The methods described are powerful yet simple, (which usually is the best), concise, (no filler), and include a strategy for any plan to make money in the market and avoid giving it all back.

From the overall concepts of Point and Figure Charting to the specific rules for managing your trades, your portfolio, and your money, you'll be happy you took the time learn what Tom Dorsey has shared about those little Xs and Os.

3-0 out of 5 stars Too Hard to Read, Concepts Available Elsewhere
Mr. Dorsey is a talented financial analyst and amateur weightlifter when he was younger BUT, he is not a good writer (this has been confirmed in my personal correspondence with Mr. Dorsey) and this book cries out for thorough editing. One can learn Point and Figure charting for free at the dorseywright dot com web site (just look for the point n figure university link at the bottom of the home page). Dorsey knows his stuff but the more easily bored one is, the more one will find this book aimless and boring. Point and Figure is superior to bar and candlestick charts because it records meaningful market movement while ignoring the small stuff. Another Point and Figure book, published in the 1930s by de Viller (?), is also very hard to read and not worthy of buying. Let's hope Mr Dorsey, a great guy and always terrific on CNBC, will get this book re-edited and whittled down to about 175 pages. Learn it for free at his website and order "Chart Reading Made Easy" by John Murphy to quickly and economically learn technical analysis.

1-0 out of 5 stars Dow's Theory Rightly Attributed to Charles Dow
"indeed, Dow Theory, while credited to Charles Dow, was actually first put together by S.A. Nelson in the book The ABCs of Stock Speculation."

This reviewer's comment above is a bit misleading. The Dow Theory, as explicated in chapter's IV thru XX of Nelson's book, are actually abridged editorials written by Charles Dow (that orignally appeared between Dec 14, 1900 and July 31, 1902). Nelson in his book accurately attributes Dow Theory to Charles Dow, who was editor of the Wall St. Journal at the time.

Nelson's contribution to Dow Theory was the act of compiling Dow's editorials; William Hamilton (Stock Market Barometer, 1922) and Robert Rhea (The Dow Theory, 1932) were so impressed by Dow's ideas about how markets work that they were keenly interested in documenting his ideas in print, as well as extending those ideas.

5-0 out of 5 stars Provides a Solid Market Snapshot
One of the toughest jobs every trader faces is accurately identifying solid support and resistance. This book clearly solves the problem of identifying reliable buy and sell signals that represent the big picture of longer term trend rather than short term noise.

5-0 out of 5 stars one of the best books available on top down investing
This is first and foremost a specific methodology for a top-down approach. This is a style of investing where you look first at the market, then the sector, and finally the stock itself. This answers the question of when to buy, whereas fundamental analysis answers the question of what to buy.

It's true that much of this information is available elsewhere, a good deal of it on the dorseywright web page, but not all of it. This book is a great book for putting the pieces together in a sensible way.

This is a book for longer term investors, not day traders or swing traders who like to be in and out of a stock in a few days or a week.

This book goes very well with Pring's how to select stocks using technical analysis; this method is easier to use, and more sensible in my opinion, but elements of both fit very well together.

Note: This book has nothing to do with dow theory, which is concerned with identifying the primary trend of the market as represented by the DJIA. In this theory, the DJTA is used for confirmation. This has nothing to do with point & figure charting; indeed, Dow Theory, while credited to Charles Dow, was actually first put together by S.A. Nelson in the book The ABCs of Stock Speculation. Robert Rhea and William Hamilton further refined the theory. ... Read more


48. Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets, Second Edition
by Nassim Nicholas Taleb
list price: $27.95
our price: $17.61
(price subject to change: see help)
Asin: 158799190X
Catlog: Book (2004-04-16)
Publisher: Texere
Sales Rank: 1204
Average Customer Review: 3.84 out of 5 stars
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Book Description

Selected by Amazon.com and the Financial Times as one of the best business books of the year, Fooled by Randomness is an instant classic.It's uniqueness has drawn to it a wide following - from the New Yorker to the Pentagon.Already published in 14 languages, this new edition, expanded by over 80 pages, includes up-to-date advances from behavioral finance and cognitive science This book is about luckor more precisely how we perceive and deal with luck in life and business. It is already a landmark work and its title has entered our vocabulary. In its second edition, Fooled by Randomness is now a cornerstone for anyone interested in random outcomes. Set against the backdrop of the most conspicuous forum in which luck is mistaken for skillthe world of tradingFooled by Randomness is a captivating insight into one of the least understood factors of all our lives. Writting in an entertaining and narrative style, the author succeeds in tackling three major intellectual issues: the problem of induction, the survivorship biases, and our genetic unfitness to the modern word. In this second edition, Taleb manages to use stories and anecdotes to illustrate our overestimation of causality and the heuristics that make us view the world as far more explainable than it actually is. But no one can replicate what is obtained by chance. Are we capable of distinguishing the fortunate charlatan from the genuine visionary? Must we always try to uncover nonexistent messages in random events? It may be impossible to guard ourselves against the vagaries of the Goddess Fortuna, but after reading Fooled by Randomness we can be a little better prepared. ... Read more

Reviews (206)

3-0 out of 5 stars One big texas hedge (long implied volatility)
Read the other reviews to get the flavour of the book. I'll only add a few points that haven't been mentioned.

1) There is good advice on avoiding some common mistakes that lead to "blowing up", which will prove useful to inexperienced market practitioners.
2) Taleb's own (claimed) trading methodology (buying OTM options) could easily fall victim to the "black swan" problem. A regime change to persistently higher implied than actual volatility would result in extended losses for his fund (unless he is bluffing us about its methodology).
3) Taleb only focuses on cases where volatility is underpriced - but some of the best opportunities come when it is overpriced, during market panics. Yet according to what he says in the book, one should continue buying such overpriced volatility! As someone whose bread and butter trade is fading market panics, I can confirm that premium selling can be highly profitable - the trick is to sell at the right time, and to employ risk control. Just because some practitioners are incapable of this, does not invalidate the method, any more than OTM options buying is invalidated because many naive speculators buy in a panic just before the VIX is about to collapse.
4) Taleb lumps MBA and businessmen types into the "fool" category. This misses the point. 99% of business is not about risk-assessment, dazzling insight, or grand strategic thought, but about successful *execution* of obvious ideas, and hard work. How many eggheads have had great ideas, but never done anything to put them into action? There is no point knowing that a beach bar in the Bahamas might be destroyed every 10 years by a hurricane, if you aren't even capable of raising capital, employing people, or working 16 hour days getting it off the ground. Good MBAs and CEOs will in any case employ people like Taleb to assess risk for them.
5) Taleb ignores the possiblity of using praxeological analysis (i.e. taking a set of demonstrable a priori truths, then using a logical train of deduction to discover what those truths necessarily imply about reality) to avoid the survivorship bias & noise problems. E.g. you can predict the effect of supply and demand on price without having to test it in the real world. This technique has been used by Murray Rothbard in economics (which has an even greater "non-falsifiability" problem than trading), and Warren Buffett in investing. As an example, you *can* judge if a good track record is "skill" or "luck", by examining the methodology of the trader/investor. If they operated solely during a period favourable to their style, it is probably luck e.g. if they made money buying emerging market bonds from 1994-1998. If they made a bucketload trading a style that was *against* the market regime, then it is almost certainly skill e.g. someone who made good returns as a shortseller of tech stocks from 1997-2000; or someone who has successfully sold premium during market panics. Since Taleb is a follower of Popper, and a hardened quant, it should come as no surprise that he is ignorant of praxeology, but it is a huge oversight all the same.
6) Taleb's scorning of Buffett as a lucky fool is ignorant in the extreme. Buffett clearly did *not* use naive analysis of past data to make his investment decisions, or rely on luck (he did well from 1969-82, a terrible period for equities). Rather he deduced highly probably consequences from demonstrable truths about investment (i.e. firms with pricing power, high barriers to entry, and low working capital requirements are likely to perform very well), and then saw that the market was not pricing these factors efficiently. Anyone reading his writings can see this. And Buffett's approach is ironically more rigorous and less dependent on luck than Taleb's professed trading methods. To elaborate - Taleb is relying on "black swan" events happening more often than people think. Therefore EITHER a reduction in the frequency of these events, OR an increase in people's expectation of them, would be enough to invalidate Taleb's approach - clearly neither can be ruled out. Taleb thinks he is betting on black swan events occuring, whilst ignoring the possibility of the "black swan" of major regime change making his own system unprofitable. Whereas with Buffet, the laws of supply and demand, and basic investment/economics, ensure that certain business methods will *always* work better than others.

To conclude - Taleb thinks he has a great idea, but it was already well known by most experienced market practitioners (see the Market Wizards books etc where multiple traders continually bang on about rare event risk and fat tailed probability distributions). He then goes on as if this idea is the only important thing, which is clearly not the case. Finally, he critiques some people, such as Buffett, who use totally rigorous methodologies, whilst himself employing a strategy that is by no means foolproof, and relies largely on past observation (data-mining!) to form its conclusions. All I can say is that he better watch out for the black swan of long-term declining volatility over the next decade!

Finally, I would just say that I found the book enjoyable, it's just that (luckily for future my P&L) Taleb hasn't got everything worked out just yet :) Looking forward to the follow-up Nassim!

3-0 out of 5 stars Important topic - flawed explication
I really wanted to like this book because the it discusses an important topic. The role of randomness in our everyday lives versus our innate (lack of) capacity to deal with it without careful education is one that we need to talk about more in the popular culture. However, the problems with this book are several. Its casual and meandering exposition is supposed to make it more accessible, but it actually makes it harder to come to terms with the topic.

Also, Mr. Taleb is a bit difficult to warm to, although there are occasional flashes of wit and humor that help. For example, he is so proud of his personal achievements that he both disparages them (he is ashamed of his Wharton MBA), and uses them as proof of his superiority of almost everyone (he read a lot at the library). He also has some strange peccadilloes such as his passionate and disproportionate dislike of George Will because he interviewed Robert Shiller (Taleb's friend and author of "Irrational Exuberance") in a rather feckless manner.

In the second half of the book he does explain some interesting phenomena about human psychology and randomness in interesting ways, but he goes completely overboard on certain points. On page 173 he states that Khaneman and Tversky have exerted the most influence on economic thinking in the past 200 years. Come on! Name any major economics department that has become behaviorist in any major way. (Taleb might find such resistance to acceptance a proof of concept - but people weighing evidence seriously would find it a chink in Talebs case.

I think the reality is that what Taleb points to is important and does exist, but that it is something like a second order effect in the big scheme of things. It may matter an extreme amount in the narrow world of options trading where Taleb indicates he lives, but for most of us it is a minor issue. Not one of no consequence, but not a determinative effect in the broad sweep of our lives.

So, I continue to look for a really good book on this topic. If you know of one, please email me with information about the book.

5-0 out of 5 stars loves and hates
so taleb loves
1) Sir Karl Popper
2) The Skeptic philosopher David Hume
3) Michel de Montaigne
4) Charles Sanders Pierce
5) Daniel Kahneman et al.
6) George Soros (with a tinge of patronizing)
7) Bob Shiller
8) Nassim Nicholas Taleb (sometimes; depends on his mood)
9) Constantine Cavafis

Taleb hates
1) George Will (he despises him)
2) Nassim Nicholas Taleb (sometimes, especially when exhibiting superstitions)
3) Myron Scholes Robert Merton, MErriwhether , etc. Notes that he says nothign of Fisher Black
4) Hegel
5) Spontaneous reviewers
6) Lawyers

Etc...

Fun read

5-0 out of 5 stars Someone at least is still Thinking.....
Nassim's first edition quick became a touchstone in the markets... Rather than looking at someone's fabricated track record one could simply ask have you read Taleb, and understood him....

The answer was and is far more important than any "random" series of returns you show someone..

Happily, Taleb has not stopped thinking, and the new edition goes even further in exploring the basic roots of how we cope with randomness...
The second edition should give those interested a starting point on how to integrate the new "findings" from both Behavioral Finance and the even more exotic Neuroeconomics.....

2-0 out of 5 stars Much ado about nothing
I found this book enjoyable. However, the salient points could have been written in two pages. The book drags on and seems intent on settling scores with, thinly veiled, former colleagues. A hodge-podge of faux intellectualism. While continually the author dismisses 'middle-brow' colleagues and to tries impress us, I am sure the author has an unread copy of 'A Brief History of Time' on his bookshelf. ... Read more


49. Financial Institutions, Investments, and Management : An Introduction
by Herbert B. Mayo
list price: $108.95
our price: $108.95
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Asin: 0324178174
Catlog: Book (2003-06-05)
Publisher: South-Western College Pub
Sales Rank: 470127
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Book Description

A general introduction to the three primary aspects of Finance and examination of how they interrelate.The book discusses financial institutions and their roles in helping to allocate savings in the economy, along with a description and analysis of securities issued and traded in money and capital markets.The book covers fundamentals of investing in stocks, mutual funds, derivatives, and other marketable securities with an emphasis on securities markets, mechanics of trading, techniques of analysis, diversification, and valuation of assets.Finally, the book lays out the processes, decisions structures, and institutional arrangements concerned with the use and acquisition of funds by a firm.This will include the management of the asset and liability structure of the firm under certain and risky situations. ... Read more


50. Real Estate Riches : How to Become Rich Using Your Banker's Money
by Dolf de Roos
list price: $16.95
our price: $15.25
(price subject to change: see help)
Asin: 0471711802
Catlog: Book (2004-10)
Publisher: John Wiley & Sons
Sales Rank: 19418
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Book Description

"Dolf makes real estate investing simple and accessible to anyone who has the will to succeed. He is an All Star in his field!"
—from the Foreword by Alex Rodriguez, 2003 AMERICAN LEAGUE MVP

An all-time bestseller, Dolf de Roos's classic Real Estate Riches shows readers from all walks of life how to find great deals and make great profits in the real estate market. This compelling book reveals why real estate is such a reliable moneymaker, and how novice investors, and old pros alike, can achieve the biggest return on their investment.

Full of time-honored wisdom, proven tactics, and quick-and-easy tips, Real Estate Riches will show you how to find the best properties, analyze deals, negotiate and submit offers, effectively manage properties, and dramatically increase the value of your real estate without spending much money. Dolf de Roos shows you:

  • Why real estate is the best investment in the world
  • How you can consistently find great deals
  • The eight golden rules of real estate investing
  • How to use tax laws to subsidize your investments
  • How to create income using OPM (other people's money)
  • The pros and cons of residential versus commercial investing

Author Dolf de Roos is proud to say he's never had a real job in his life—because real estate pays him better. Following his powerful and proven strategies, you too can leave the nine-to-five life behind. ... Read more


51. Valuing A Business, 4th Edition
by Shannon P. Pratt, Robert F. Reilly, Robert P. Schweihs
list price: $99.95
our price: $76.00
(price subject to change: see help)
Asin: 0071356150
Catlog: Book (2000-08-30)
Publisher: McGraw-Hill
Sales Rank: 62872
Average Customer Review: 3.33 out of 5 stars
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Book Description

First published in 1981, Valuing a Business is today the world's most widely followed valuation reference. As more professional associations than ever offer valuation education and credentials, this Fourth Eidtion - with 10 new chapters that significantly expand the book's scope - promises to appeal to an even broader market. This easy-to-use reference features increased emphasis on vlauation court cases and decisions; new information on arbitration and mediation; updated data on stock option valuation; and much more. ... Read more

Reviews (9)

4-0 out of 5 stars Super
This book, guide, reference, ... or what ever you name it. is essential for all business, financial and investment guides.

5-0 out of 5 stars An Excellent Private Equity Valuation Primer
I have found Mr. Pratt's book to be an outstanding and practical general reference guide to valuing privately-held businesses. Due to the book's breadth of material and balanced focus on both the science and art of valuation, I have found "Valuing A Business" to be an excellent professional reference for anyone entering the field of business valuation. I highly recommend it.

In addition to the common "science side" valuation techniques, issues, and approaches that are found in many valuation textbooks, Pratt provides unique, valuable insight into the "art side" of valuation. The book also includes real life project execution considerations for litigation support, expert witness testimony, and taxation. "Valuing A Business" offers solid information to assist a practitioner in building a quality framework for conducting a comprehensive private company valuation.

4-0 out of 5 stars Good technique, directed at the professional practitioner
I take issue with the reviewer who suggested that Tom Copeland/McKinsey's book "Valuation" is better than this one or is more directed at valuaing big businesses. ... On the other hand, it should be said that valuation techniques do not differ between big companies and small companies (especially if big/small companies are publically traded). Valuation techniques vary depending on (a) what sort of asset is being valued (public equity, vs. private equity, vs. business assets as a whole, etc) and (b) why valuation is being done (for M&A, litigation between business partners, divorce, ESOPs, for equity investment/divestment). If an investor is valuing a $50 Billion public company and a $50 million public company, the technique used for both is (probably) the same.

If anything, this book does an excellent job in reminding us of the diversity of valuation techniques in use, and the diversity of reasons for doing valuations. Given the frequency with which privately held companies are bought, one would think that knowing how to value companies whose stock is not publically traded is useful for general businesspeople, not just accountants and attorneys. But if you absolutely insist that you just want to know how to value publically traded companies and don't give a hoot for calculating "private equity discounts" or "minority shareholder discounts", then I would recommend Aswath Damodaran's books "Damodaran on Valuation", "The Dark Side of Valuation" or "Investment Valuation". Damodaran, professor of Finance at NYU, actually uses the same techniques taught here, but applied to public equity investing and with different names (for example, what is called the "Market approach" here is just what Damodaran calls "relative valuation" in a different context).

2-0 out of 5 stars Useful, but there are better books out there
The authors have taken an approach from an accounting or legal standpoint. They haven't included methods incorporating EVA or contingent claims analysis. For as thick as this book is--and it is really thick--there is a surprising lack of detail. If you're looking to value companies of any significant size, buy the McKinsey book instead. If you're going to work with only closely held firms, estates, etc. then perhaps this book is for you.

2-0 out of 5 stars Useful but Boring
I bought this book long time ago (6-7 years) when I joined a private equity firm and was hungry for materials which taught valuation technique. Materials in this book is useful. In addition,there were few titles which discuss valuation of non-public companies at that time. This book, in fact, was also a reading material for the CFA exam back in 1995. However, the text is quite boring. Unless you really need to study information about valuation for non-public company, don't buy it for leisure ... Read more


52. Liar's Poker: Rising Through the Wreckage on Wall Street
by Michael Lewis
list price: $14.00
our price: $11.20
(price subject to change: see help)
Asin: 0140143459
Catlog: Book (1990-09-01)
Publisher: Penguin Books
Sales Rank: 2179
Average Customer Review: 4.45 out of 5 stars
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Reviews (148)

5-0 out of 5 stars A must-read, if you are thinking of working on Wall St
I worked for CSFB for three years, and am still in investment banking for a smaller firm. So I have seen a part of the world that is described here. I'm not saying that this is an exact description of what I saw, because Lewis picks the most exotic creatures that he met, but the atmosphere is perfectly conveyed. This book will tell you all the stuff that they don't teach you in an interview or recruitment visit - the pecking order, the politics, and how to get paid.

The other reason to read this is that Lewis is a brilliant writer, with a real talent for describing people and their situations. Lots of other people have written boring books with the same raw material. For a non-specialist like my mother, the technicalities were hard work, but you don't need a lot of special knowledge to like this book. My mother certainly did.

Probably the best way to look at this book is like a travel book - you're not visiting a country, you're visiting a world. Great travel books are not word-perfect descriptions of a place, they are representations of what the author felt like when he was there, and they give the reader a feeling of what it was like to be there. If you read this book, you will understand what it feels like to work inside a big bank, and you'll enjoy the ride, even if you have no interest in actually working there.

3-0 out of 5 stars Obvious Cry Baby
I want you to realize that Michael Lewis is only one perspective albeit a very biased and skewed one at that. If you speak to any one who worked at Salomon they will bluntly tell you that the book is not completely factual. Michael Lewis has an agenda, and it is very obvious that he has it in for the Salomon and Wall Street traders. And, he is willing to bend the truth and exagerate things to make the people look like monsters. Using the endearing term of Human Pirhana speaks to this point. I loved the book, because it gives you somewhat of a perspective on the life of traders, but I don't think you truly know what it is you're up against until you go and do actual trading. I wouldn't believe everything you read in Liar's Poker, and I would weigh each word carefully, because Meriweather isn't the only playing Liar's Poker here. Enjoy, and don't let the book discourage you from hedge funds and investment banking, especially if you really love finance.

4-0 out of 5 stars An insider's view of Solly
'Liar's Poker' is worth a read if you want an insider's account of life on Wall Street. The book doesn't pretend to glorify the easy money that Lewis and his ilk made during the bond schlepping go-go days of the 1980s. Rather, Lewis is disillusioned by the greedy culture and hypocritical short-sightedness at Salomon Brothers, but not enough that he doesn't enjoy the ride for a few oh-so-profitable years. Like his other books, 'Liar's Poker' is fun to read. His anecdotes about the training program and the trading floor, albeit surely embellished, read like a day at the amusement park. The key shortcoming is an oozy 20-something self-righteousness that pervades many of the book's chapters, and reaches a crescendo in the final pages. But hey, arrogance begets credibility. And when it comes to describing Wall Street in the 80s, Lewis is as credible a spokesman as anyone.

5-0 out of 5 stars Excelent insight into the world of wallstreet
Michael Lewis is obviously an excellent writer. The words simply flow from him. He speaks from experience so his perspective is insightful, and entertaining.

I have always been mesmerized by wallstreet, as well as silicon valley, simply because we it allows us, if even for just a few hours, to imagine the possibility of attaining great wealth legitimately thru our talent and hard work.

He reminds me of Kurt Vonnegut. But Kurt speaks of the old wrld, the one our fathers lived in. Lewis in more today. Somewhat ike Po Bronson

4-0 out of 5 stars Good read for a finance novice too!
I picked up this book as it is highly popular among investment bankers. I am not an investment banker and do not intend to be one but I was keen to find out what makes Wall Street special. The book not only satisfied my curiosity but also was pleasantly amusing.

The author traces the glorious and gloomy times of Salomon Brothers, a big financial enterprise in which he worked long enough to be able to tell this tale and become a rich man. He explains some financial innovations of Salomon brother's in lay man's terms, which makes this book very readable for all.

The author's self-deprecating humor and his vivid analysis of the people he came across in his organization make the account entertaining.

Whether or not the author's opinions on technical matters in this book are meritorious-I am not qualified to say. If you are a finance novice and curious to find out about life in that universe, you will find this book worthwhile. ... Read more


53. Financial Markets and Institutions (4th Edition)
by Frederic S. Mishkin, Stanley G. Eakins
list price: $126.80
our price: $126.80
(price subject to change: see help)
Asin: 020178565X
Catlog: Book (2002-04-26)
Publisher: Addison Wesley
Sales Rank: 125558
Average Customer Review: 3.6 out of 5 stars
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Reviews (5)

5-0 out of 5 stars Very good for first exposure to financial markets
This book is not an advanced book on financial markets, but it is a good introductory book. I use this book for my undergraduate teaching. Both I and students are happy about the coverage of the book. It is well organized and well written. Improvements will be valuable in the derivatives markets and risk management areas.

4-0 out of 5 stars Good start
I've used some version of this book for many years now, and I've seen it evolve. I think, as other reviewers have said, that there are some simplified portions of the book, especially those parts dealing with monetary economics. There are other portions which lay out the principles as only these authors can, and those parts are extremely helpful and valuable. This book allows me to teach my notes and thoughts with a textbook serving as a reference and an introduction -- it doesn't get in my way, in other words. I use it along with several other texts, and I think it gets the job done. Students seem to like it as well, mainly for its clarity. For someone wanting to learn the basics, this is an excellent choice.

2-0 out of 5 stars This book insults the intelligence of all but newcomers
Although this might be a perfect book for those looking for simplicity, I would not advise it to anybody with previous exposure to finance.
The book is a way too simple, and reveals huge ignorance on the markets outside the US.
I think the book is very much a benchmark to reveal ignorant finance - teachers.

2-0 out of 5 stars Too many errors of omission and commission for a second ed.
Too many errors to be a useful text for a serious course in financial markets. Virtually ignores the market for mortgage backed securities. Ignores the interest on interest component of total return. Discussion of zeroes is muddled. Discussion of YTM is incomplete. Even the chapters on commercial banks and Fed policy contain the same old mistakes seen in most money and banking texts.

5-0 out of 5 stars Excellent reading
I have never found such a made easy finance text like this before!

A lot of long and hard to understand topics in other textbooks are simplified in plain English.

It is excellent whenever you are puzzled with the topics like Efficient Market Theory and Interest Term Structures in other books and you need a clear understanding! ... Read more


54. Financial Statement Analysis : A Valuation Approach
by Leonard C. Soffer, Robin J. Soffer
list price: $146.67
our price: $146.67
(price subject to change: see help)
Asin: 0130328340
Catlog: Book (2002-11-12)
Publisher: Prentice Hall
Sales Rank: 119848
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55. Option Volatility & Pricing: Advanced Trading Strategies and Techniques
by Sheldon Natenberg
list price: $59.95
our price: $37.77
(price subject to change: see help)
Asin: 155738486X
Catlog: Book (1994-08-01)
Publisher: McGraw-Hill
Sales Rank: 6964
Average Customer Review: 4.38 out of 5 stars
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Book Description

One of the most widely read books among active option traders around the world, Option Volatility & Pricing has been completely updated to reflect the most current developments and trends in option products and trading strategies.

Featuring:

  • Pricing models
  • Volatility considerations
  • Basic and advanced trading strategies
  • Risk management techniques
  • And more!

Written in a clear, easy-to-understand fashion, Option Volatility & Pricing points out the key concepts essential to successful trading. Drawing on his experience as a professional trader, author Sheldon Natenberg examines both the theory and reality of option trading. He presents the foundations of option theory explaining how this theory can be used to identify and exploit trading opportunities. Option Volatility & Pricing teaches you to use a wide variety of trading strategies and shows you how to select the strategy that best fits your view of market conditions and individual risk tolerance.

New sections include:

  • Expanded coverage of stock option
  • Strategies for stock index futures and options
  • A broader, more in-depth discussion volatility
  • Analysis of volatility skews
  • Intermarket spreading with options
... Read more

Reviews (32)

5-0 out of 5 stars Great book for prospective traders
With the popularity rise in options and option strategies, I must admit this is a great book to get started with. I am a clerk at the CBOE and have studied this book thoroughly, and in my experience it's the best options tutorial out there. I have also sampled the John Hull book and the official Options Institute book. The writing is very readable and it does not bog you down with overly complex derivations of each formula (there is an appendix that does derive and explain the details of the Black and Scholes model though.)

If you're serious about trading I highly recommend reading this book first - it'll be a useful tool. Working at CBOE I have seen many other clerks studying their Natenberg books during the slower times. Learning arb (hand signaling) and understanding what you are arbing are the keys for a successful options trader. This can be useful for someone just getting started in options as well or with prior experience.

5-0 out of 5 stars Must reading in order to move up to the next level...
There is a reason why almost all of the reviews of this book are in the Excellent range. It simply is a must read for anyone who wants to be serious about trading options and making intelligent trades. While the book is designed for those on the technical side of trading, it is also a gold mine for those of us simply trading options to make money! Natenberg explains concepts that are essential for the layman to be aware of in order to understand the market. The book is well worth the price just for his discussion of the normal distribution and of how it relates to volatility and investing in options. College statistics teachers could learn how to present this important concept in a meaningful way just by reading this chapter! It is easy to take the information from this book and use Excel to write a program to figure the expected price swings for any stock option based upon its volatiltiy. While the average options trader will not need to master much of the detail in the book, the simple awareness presented here will make you a better and more confident trader. By combining the ideas from this book with those from Max Ansbacher's The New Options Market, you can be in a powerful position to deal effectively in the options market.

5-0 out of 5 stars Great options book
Perhaps the most amazing success story in the markets and investing in the last 10 or 15 years is the growth of the options market, and the advent of inexpensive trading for derivatives such as options, allowing even the small and amateur investor to use these vehicles if he or she wants. I've read that the options market has grown more than ten-fold since the 80s, even more so than the stock market. This book will help you advance your knowledge of this important area of the market.

This is one of the few really high-level options books that are understandable without advanced math. I have a couple of other books on options and derivatives, and they require advanced calculus. It's still geared toward the professional, but as an amateur I still found it interesting and worthwhile reading. Be advised you'll probably still need to read an introductory book or two on options before tackling this volume, which is what I did. But after absorbing those two books, I found I had the background to read and appreciate Natenberg's book. Natenberg discusses all the advanced concepts so you learn such things as how to do butterfly option spreads, synthetic puts and calls, volatility spreads, how to remain delta and gamma neutral, and other such advanced concepts. Overall a great book and essential reading for anyone who wants a better understanding of this important area.

5-0 out of 5 stars Option Volatility & Pricing: Advanced Trading Strategies and
Natenberg has done an excellent job in presenting this book on options. He has very successfully combined theory with practical ideas and examples in the most important area for users of options to get their head around, volatility. Natenberg does well explaining the differences between the different modelling techniques. An excellent book.

4-0 out of 5 stars Good High Level book
This is a good book if you are just starting out and don't want a lot of mathematics. Gives strong high level understanding of how options work. Especially good descriptions of greeks and their behaviors. ... Read more


56. Fundamentals of Investments + Self-Study CD + Stock-Trak + S&P + OLC with Powerweb
by Charles J. Corrado, Bradford D Jordan
list price: $127.19
our price: $127.19
(price subject to change: see help)
Asin: 0072976357
Catlog: Book (2004-01-10)
Publisher: McGraw-Hill/Irwin
Sales Rank: 130641
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Book Description

Fundamentals of Investments was written to:1. Focus on students as investment managers, giving them information they can act on instead of concentrating on theories and research without the proper context.2. Offer strong, consistent pedagogy, including a balanced, unified treatment of the main types of financial investments as mirrored in the investment world.3. Organize topics in a way that makes them easy to apply--whether to a portfolio simulation or to real life--and support these topics with hands-on activities.The approach of this text reflects two central ideas.First, there is a consistent focus on the student as an individual investor or investments manager.Second, a consistent, unified treatment of the four basic types of financial instruments--stocks, bonds, options, and futures--focusing on their characteristics and features, their risks and returns, and the markets in which they trade. ... Read more


57. Mean Markets and Lizard Brains: How to Profit from the New Science of Irrationality
by TerryBurnham
list price: $27.95
our price: $18.45
(price subject to change: see help)
Asin: 0471602450
Catlog: Book (2005-01-28)
Publisher: Wiley
Sales Rank: 736206
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Book Description

From the New Yorker to USA Today, everyone from journalists to market pros are turning to behavioral finance to explain, analyze, and predict market direction. In contrast to old-school assumptions of cool-headed rationality, the new behavioral school embraces hot-blooded human irrationality as a core feature of both individuals and financial markets. The 2002 Nobel Prize in Economics was awarded to scholars of this new scientific approach to irrationality.

In Mean Markets and Lizard Brains, Terry Burnham–an economist who has a proven ability to translate complex topics into everyday language–reveals the biological causes of irrationality. The human brain contains ancient structures that exert powerful and often unconscious influences on behavior. This "lizard brain" may have helped our ancestors eat and reproduce, but it wreaks havoc with our finances. Going far beyond cataloguing our financial foibles, Dr. Burnham applies this novel approach to all of today’s most important financial topics– the stock market, the economy, real estate, bonds, mortgages, inflation, and savings.

This broad and scholarly investigation provides an in-depth look at why manias, panics, and crashes happen, why people are built to want to buy at irrationally high prices and sell at irrationally low prices. Most importantly, by incorporating the new science of irrationality, readers can position themselves to profit from financial markets that often seem downright mean. Mean Markets and Lizard Brains skillfully identifies the craziness that is part of human nature, helps us see it in ourselves, and then shows us how to profit from a world that doesn’t always make sense.

Terry Burnham, PhD (Cambridge, MA), is an economist at the Harvard Business School. He has been an active and extremely successful participant in the financial markets for over 20 years. Dr. Burnham has a PhD in business economics from Harvard University, a masters in finance from MIT, an MS in computer science from San Diego State University, and a BS in biophysics from the University of Michigan. Before becoming an economics professor at Harvard, he worked on Wall Street, and was the President and CFO of a successful start-up biotechnology firm. He is the author of the bestselling book Mean Genes: From Sex to Money to Food, Taming Our Primal Instincts. ... Read more


58. High Probability trading
by MarcelLink
list price: $39.95
our price: $26.37
(price subject to change: see help)
Asin: 0071381562
Catlog: Book (2003-03-17)
Publisher: McGraw-Hill
Sales Rank: 1784
Average Customer Review: 4.69 out of 5 stars
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Book Description

A common denominator among most new traders is that, within six months of launching their new pursuit, they are out of money and out of trading. High-Probability Trading softens the impact of this "trader's tuition," detailing a comprehensive program for weathering those perilous first months and becoming a profitable trader.

This no-nonsense book takes a uniquely blunt look at the realities of trading. Filled with real-life examples and intended for use by both short- and long-term traders, it explores each aspect of successful trading.

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Reviews (29)

5-0 out of 5 stars This is the one!
At the risk of being repetitive, I'm going to have to give this book another stellar review. Like many others, I have read a hundred other trading books and this one stands heads above the rest. The author is obviously an active trader and is not ashamed to divulge his weaknesses, even current ones. He covers all of the necessary bases (psychology, money management, risk management, setups, tradeable markets, etc.) without being exessively wordy. He is one of the few traders who can actually write relatively well. He manages to explain arcane and complex trading concepts using understandable and economical word choices. The review structure at the end of each chapter is an excellent technique to enhance the learning process.

Yes, most of the information is more useful to the novice trader but one neeeds a basic comprehensive understanding of trading to get the most benefit. On the flipside, since it is so inclusive, the book could serve as an excellent refresher for the seasoned trader. That trader might even come across a concept long forgotten and be able to turn it into a profitable strategy.

HPT has become my primer. I come back to it every few months to review sections that I feel weak in. I recommend this book to everyone who asks me for that "one book" that can get them a head start in learning to trade.

Great job Mr. Link! I eagerly await your next contribution to the world of trading literature.

5-0 out of 5 stars one of the best trading books I've read
I've been trading for 15 years and I read as many trading books as I can, and I found High Probability Trading to be one of the best yet. There is no bull or get rich quick trading system in this book, instead the Author lays out some simple but often over looked principles of how to become a better trade. For example he stresses that trading with trend has always been the way to go and one should not get to fancy by trading the counterwaves. Its a simple prinicple but one that I can forget about at times. This book was a great refresher and taught me a few things about my trading, i highly recommend it to any trader.

5-0 out of 5 stars One word...Excellent!!
I've read over 30 books on trading and this book ranks at the top with Dr. Elder's "Trading for a Living". I learned so much from it that I'm reading it for the second time so that I can commit the priciples to memory. It's not for the beginner, but if you've been trading for at least 1 year the book's knowledge will definitely hit home. It's written in a very easy-to-read style which makes it more enjoyable to read, especially for a topic that can be so dry and technical.

5-0 out of 5 stars Best trading book I have ever read.
Mr Link has written a book that will eventually be seen as a must read for aspiring traders.

I initially wanted to write a review after reading only the first chapter of this book. I immediately knew that I was on a winner. My opinion of the book did not change as I read on. I feel that the book is written for experienced traders. I would not have benefited from reading this book 4 years ago when I started trading. Reading his book I could see many of the mistakes that I have made and continue to make to this day.

I will read this book a second time. I will probably read it 3 times.

Well done.

5-0 out of 5 stars A real 5 star
What is in this book works if followed consistently, period. The topics and writing style are great from how to interpret news to using TA and understanding trading psychology. It has principles and ideas that WORK and if thats nothing new then your fooling yourself into believing there is some easy magical get rich quick system out there, no such luck. What is in this book are solid, proven time tested methods and ideas, well written and useful! One of the BEST of the many trading books i have ever read. ... Read more


59. Yes, You Can Become a Successful Income Investor! Reaching for Yield in Today's Market
by Ben Stein, Phil Demuth, Benjamin Stein
list price: $23.95
our price: $16.29
(price subject to change: see help)
Asin: 1401903193
Catlog: Book (2005-03-01)
Publisher: Hay House
Sales Rank: 1087
Average Customer Review: 5.0 out of 5 stars
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Amazon.com

Aimed at those living on a fixed income or on the cusp of retirement, Yes, You Can Be a Successful Income Investor! explains the basic building blocks of fixed-income investing and offers advice on getting the highest possible yield while minimizing capital losses. At a time when interest rates are unusually low and with more Americans than ever reaching retirement(a trend that will continue for the next 15 years), this is particularly timely information. Ben Stein and Phil DeMuth sift through dozens of investment options and highlight the stocks and bonds with the greatest income yields in recent years as well as some strategies and investments that should be approached with caution. They also discuss how to develop a diverse portfolio, name specific investments and explain their yields and risks, and help readers develop an overall strategy based on goals and needs. There are also chapters on the bond market, annuities, winning stocks, various investment products, real estate investment trusts, and a look at the hard numbers on various mutual funds.

Stein, an economist and part-time TV and movie personality, and DeMuth, an investment psychologist, make a good writing team. They combine a wealth of information, including hard data, graphs, and charts, with a clear and precise writing style that investment novices will appreciate. The book also contains practical tips and advice designed to help readers do their own research and know the questions to ask when dealing with investment professionals. --Shawn Carkonen ... Read more

Reviews (2)

5-0 out of 5 stars Excellent handbook to take charge of your financial future
Ben Stein and Phil DeMuth are very dedicated to helping people get serious in preparing for retirement.They bring several strong virtues to this task.First, they not only reject investment fads, they believe in and focus on solid investment basics.Second, they believe that you have the final responsibility for your money, so if an investment or financial program is too complicated for you to understand in every detail, they advise you to stay away from it.Third, they understand and preach diversification.Simply, diversification aids the investor by removing the risk associated with investing in just one firm or one market sector and therefore stabilizes earnings.

The idea behind this book is quite good.For the past two or three decades, all the talk around investing has been about growth stocks where you make your money by realizing capital gains.Before the age of double dividend taxation, people invested for the income provided by dividends.The present market for stocks is priced high in historical terms (see Stein and DeMuth's excellent "Yes, You Can Time the Market" to understand why this is true) and it is all too likely that a correction could provide losses instead of gains.In this book, the authors provide an approach to investing that provides a return by gaining dividend income from stocks and interest income from bonds while avoiding the risk of capital losses as much as possible.

Stein and DeMuth begin by talking about bonds.They provide an excellent primer and then talk about the various types of bonds, their risks, and their returns.Their discussion will help the reader understand that a higher return comes with increased risks.In effect, the higher return is a compensation for taking on that higher risk.The authors help the reader understand that there are some bonds whose increased risk is worth taking and many whose higher return is not sufficient compensation for someone counting on the income for their daily bread.

The discussion then turns to developing a stock portfolio that is designed for income rather than capital gains.This is an excellent and important discussion because it runs counter to most of the stock talk of the past generation.Just as with bonds, they show the effects of various portfolio constructions.They are very good on what matters to the income investor and what is dangerous to your financial health.They have a short chapter on preferred stock that is interesting and gives adequate warning to stay away from complicated investments that you don't understand.

The section on REITs is terrific and will help the average investor understand them.They can be an excellent part of a portfolio and are an excellent way to participate in real estate without having to own and maintain your own properties.Remember, in retirement you want to be enjoying yourself, not going through the hassle of being a real estate manager.

They also talk about annuities in a sensible and helpful way.Stein recounts how annuities helped his parents have a terrific retirement. The authors also balance that with cautions about the balance between fixed and variable annuities and offer solid advice about their complications.They note that most of the people who sell annuities don't really understand what they are selling and to stay away from those you don't understand completely.

The heart of the book is the section on how to combine all of these investments into a portfolio that balances your ability to take risk versus return.They provide various example portfolios while always encouraging you to do your own research.They want you to use the examples as models of what to do rather than as investment recommendations.

Stein and DeMuth also provide a very good website that provides current information and links as well as errata for the book (you know the small typos that creep into any book).

This is an excellent handbook for anyone who wants to take responsibility for his or her retirement and is serious about understanding what is involved.There are too many sad stories of people who work their whole lives to save some cash and then have it evaporate in some inappropriate investment that promised them gold falling from the sky.Stein and DeMuth have provided an excellent guide to understanding what is real and what is fluff.You could not spend $23.95 better than to buy this book and then study it carefully.If you do, you will be a much better investor and steward of your financial future.

5-0 out of 5 stars A New View Towards Retirement
With the approaching retirement of large numbers of Baby Boomers retiring in the next few years it is appearant that the investment plans of many small investors will need to change to provide the retirement income that will be needed. In this book there is a detailed discussion on how to invest for income even in the times of our present very low interest rates.

Beyond the introductory chapters that cover the general subject, there are chapters on preferred stock,k world income funds, real estate investment trusts, leveraged municipal bonds, emerging market debt, and certain kinds of annuities, and several others.

Of course, the usual cautions remain. The Fed has been raising interest rates for some time now, although at a very slow rate. Investing for the future is really rather easy, you just have to guess right about the future of the market and your own life.
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60. When Genius Failed : The Rise and Fall of Long-Term Capital Management
by ROGER LOWENSTEIN
list price: $14.95
our price: $10.17
(price subject to change: see help)
Asin: 0375758259
Catlog: Book (2001-10-09)
Publisher: Random House Trade Paperbacks
Sales Rank: 1459
Average Customer Review: 4.18 out of 5 stars
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Book Description

John Meriwether, a famously successful Wall Street trader, spent the 1980s as a partner at Salomon Brothers, establishing the best--and the brainiest--bond arbitrage group in the world. A mysterious and shy midwesterner, he knitted together a group of Ph.D.-certified arbitrageurs who rewarded him with filial devotion and fabulous profits. Then, in 1991, in the wake of a scandal involving one of his traders, Meriwether abruptly resigned. For two years, his fiercely loyal team--convinced that the chief had been unfairly victimized--plotted their boss's return. Then, in 1993, Meriwether made a historic offer. He gathered together his former disciples and a handful of supereconomists from academia and proposed that they become partners in a new hedge fund different from any Wall Street had ever seen. And so Long-Term Capital Management was born.
        In a decade that had seen the longest and most rewarding bull market in history, hedge funds were the ne plus ultra of investments: discreet, private clubs limited to those rich enough to pony up millions. They promised that the investors' money would be placed in a variety of trades simultaneously--a "hedging" strategy designed to minimize the possibility of loss. At Long-Term, Meriwether & Co. truly believed that their finely tuned computer models had tamed the genie of risk, and would allow them to bet on the future with near mathematical certainty. And thanks to their cast--which included a pair of future Nobel Prize winners--investors believed them.
        From the moment Long-Term opened their offices in posh Greenwich, Connecticut, miles from the pandemonium of Wall Street, it was clear that this would be a hedge fund apart from all others. Though they viewed the big Wall Street investment banks with disdain, so great was Long-Term's aura that these very banks lined up to provide the firm with financing, and on the very sweetest of terms. So self-certain were Long-Term's traders that they borrowed with little concern about the leverage. At first, Long-Term's models stayed on script, and this new gold standard in hedge funds boasted such incredible returns that private investors and even central banks clamored to invest more money. It seemed the geniuses in Greenwich couldn't lose.
        Four years later, when a default in Russia set off a global storm that Long-Term's models hadn't anticipated, its supposedly safe portfolios imploded. In five weeks, the professors went from mega-rich geniuses to discredited failures. With the firm about to go under, its staggering $100 billion balance sheet threatened to drag down markets around the world. At the eleventh hour, fearing that the financial system of the world was in peril, the Federal Reserve Bank hastily summoned Wall Street's leading banks to underwrite a bailout.
        Roger Lowenstein, the bestselling author of Buffett, captures Long-Term's roller-coaster ride in gripping detail. Drawing on confidential internal memos and interviews with dozens of key players, Lowenstein crafts a story that reads like a first-rate thriller from beginning to end. He explains not just how the fund made and lost its money, but what it was about the personalities of Long-Term's partners, the arrogance of their mathematical certainties, and the late-nineties culture of Wall Street that made it all possible.
        When Genius Failed is the cautionary financial tale of our time, the gripping saga of what happened when an elite group ofinvestors believed they could actually deconstruct risk and use virtually limitless leverage to create limitless wealth. In Roger Lowenstein's hands, it is a brilliant tale peppered with fast money, vivid characters, and high drama.
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Reviews (114)

5-0 out of 5 stars Engrossing read
The author gives an engrossing read about the LTCM debacle in this book. His writing style, in my opinion, really captures my attention and almost turns the book into a Grisham-style page-turner. After reading the book, you will have a better idea of the reasons why the fund failed. Also, you will gain more qualitative knowledge about hedge funds, derivatives markets and investing in general. However, if you are looking for equations and quantitative stuff, then sorry man, you will be greatly disappointed. Don't expect to find the Black-Scholes equation here. Nor do I think it's necessary. As a finance student, I'm tired of having to know the complex equations and quantitative stuff inside-out, without the slightest idea of how they should be used and their limitations.
If you have the basic idea or training in quantitative finance, the this book is a must-read. It sheds light on the untold stories in derivatives trading. The downfall of LTCM should be a very somber and sobering reminder of the limitations of the derivatives markets. Too much credit is given to "risk management" and "quantitative finance". I think every portfolio manager and derivatives trader should keep this in mind.

5-0 out of 5 stars BIG MEN MAKE SMALL MISTAKES!
Small traders who break the simple rules are called 'dumb' by the professionals in the industry in their magazine articles, interviews on radio & TV etc. Here we have a group of top academics including Nobel Prize winners in economics who headed a firm that made some of the most silly 'mistakes' that caused them to lose over FOUR BILLION DOLLARS1 The reason: simple over-trading and mis-management of funds - just what the little guy is always told not to do!

This book gives a brief introduction to the various players involved. It gives an indicationl of the greed involved, not only by over-leveraging but by forcing investors to take back their money so the partners could put all their money in the fund and make all the profits for themselves. Interestingly, they did these people a great favor by preventing them from going broke.

Later in the book, when the crisis is really brought forward, we are given a detail day to day account of the stress and problems that the fund managers were creating for themselves and the rest of Wall Street as many banks and other financial institutions had tied up hundreds of millions with this firm. In the end the Federal Reserve arranged a bailout with fourteen major banks to save day.

Ironically, the super-losers went and created another fund after this big crash and sure enough they raised a few hundred millions in trading capital so the 'bright' fellows can get running again!

5-0 out of 5 stars Not enough Cream on the Coffee
1997, 30 year Treasury Bonds Fell to 5.58; traders were selling short to hedge against riskier bonds, treasuries rallied and spreads increased between bonds; Japanese bonds dropped opposite of the bet by LTCM.

Blame the Asian flu, IMF unresponsiveness, and Salomon Barney Smith abandonment of its arbitrage positions as causes for the evaporation of 4 billion dollars LTCM within months. LTCM was too big, possessing $128 billion in assets and $3.6 billion in the bank and 2/5 of money belonging to the owners. Notation derivates reaching leverage 100 to 1 preventing rapid sell off and bankruptcy out of question, for bankruptcy would have caused a world cascade economic crash and loses reaching above $1 trillion. Bankruptcy was not an option; LTCM was too big to fail and the Fed knew it. LTCM only chance was too secure money from warranties, loans, or a buy out; none of which in the end would save them. In the end, the Feds 16 banks would invest $250 million each with a total accumulation of $4 billion dollars rescuing LTCM and the partners would leave with relatively nothing in their pockets. How did smartest guys on Wall Street fail? How did the impossible happen?

1997, Indonesia, Rupiah dropped 85 percent as currency traders forced devaluation revealing a corrupt banking practices and overextension of bad credit; volatility rose to 27 percent.

1998 LTCM bet that no future recession would occur and believed the Bond margins would narrow. Instead, the world economy were experience new global forces as communism was breaking down, China's GNP was heating up, and East Germany was experiencing new economic freedoms. A U.S - 56 point margin increase on the swap, England - 45 point margin, and German - 20 point margin and LTCM was losing money on all of its markets. LTCM had previously negotiated a warrant by UBS and UBS was being seriously exposed while LTCM was claiming "Future expected returns are good" although Equity Volume was in trouble, Swap margins were increasing, and Treasuries were falling as investors fled to safer securities and as Treasuries were being bought up their rates dropping to 5.56.

With Indonesia falling - all eyes were turned to Russia. There was no rescue by the IMF for the Russian ruble. Shares in Europe and Turkey were weak and Venezuelans were buying dollars all the while swaps margins increased. Aug 21, the Dow fell 280 points and investors continued to prefer the safest bonds, the 30 year treasures, US swaps increased to 76 points, 20 points in one day, Britain swaps increased to 62 points and mortgage spreads spread to 121 points, high yield climbed to 276, and treasurers were at 13. LTCM lost $558 million in a single day, 15 percent of their capital. LTCM was certain the markets would correct rationally and the spreads converge. Losses accumulated faster because leverages increased. Additional $200 million in funding was requested from Merrill Lynch. Hedge funds were not considered a bank and so credit extension regulation was constrained. The drop in LTCM performance caused banks to tighten their credit lines to hedge funds. In fact, the hedge funds poor performance screamed default and banks demanded their entitlement to repayment. LTCM was very close to insolvency. Mattone told Meriwether, "when you're down by half, people figure you can go down all the way" and "your out". Aug 31, the DOW crashed 512 points, Hong Kong Authority stopped supporting local markets by buying local shares. For the month of Aug, LTCM had lost $1.9 billion, 45 percent of its equity capital, and still had $125 billion in derivative assets. Death was imminent, the leveraging could not be stopped, LTCM was immobilized by its size, and Bear was threatening to suspend trading. After reviewing LTCM books, Bear allowed LTCM trades and gave a harsh warning, if they dropped below $500 million all trades would halt.

Sep 10, LTCM experiences a sum lose of $500 million dollar for five days of trading. LTCM still has 7,000 derivative contracts totaling $1.4 trillion dollars.

In 1987, Alan Greenspan was appointed as chairman of the Federal Reserves. Greenspan did not totally understand hedge funds, they were fairly private, and the Fed had no authority over them. Greenspan was nervous about the credit lines extended too these funds. Some call the funds, banks. What were the hedge funds? What is a bank?

The New York Fed keeps in touch with its branches and they talk with private industry, so supposedly the Fed keeps a pulse on the private sector. The Fed has a trading desk and trades $450 billions in treasuries, buying and selling to affect the amount of available money supply. If the Fed buys treasures, this act increase money supply and gives banks more money for banks to loan, and interest rates decrease. If the Fed buys back treasures, this act decrease money supply and makes less available loanable money and interest rates rise.

The volatility of LTCM was rising because it was so vulnerable. LTCM was being pressured by Goldman as they continued buying down increasing spreads. Goldman exasperated the European bond market cutting apart LTCM.

Warren Buffet was a seemly friend but of no help to LTCM. Berkshire Hathaway made an offer: 250 million for $3.57 billion to stabilize the fund and all partners fired. Legal confusion forfeited the deal. The last thing the economy wanted was an economic meltdown, so the Fed offered a deal and the LTCM partners were out in the cold with tears in their eyes, a perfect model (Merton, Black, Scholes) and not enough liquid money to save them against the impossible.

4-0 out of 5 stars "...in crisis, correlations go to 1"
The author of this book is a journalist - not a trader or banker - and it's helpful to remember that as you read through this moralistic account of LTCM's rise and fall.

Lowenstein has the audacity to write of Merton, a Nobel Laureate, that he held a "naive belief in perfect markets." Perfect markets may be mythical, but the author is not qualified to call this view naive. The output of the model is as important as the tenability of its' assumptions.

In the end, the fund was too big and successful, not hubristic, to remain in its' sphere of expertise (bond arbitrage) and was forced to become the 800-pound gorilla in other markets like merger arbitrage. Yes, the top two traders were arrogant (a requirement for traders) but the markets broke the fund, not Hilibrand and Haghani.

More details on the transactions would have been interesting but these may have burdened the flow of the book.

There are copious footnotes and the author does a nice job of outlining the players and their stakes in the fund.

5-0 out of 5 stars Ideology and greed defy common sense
There should be a sinking feeling in the pit of your stomach as you read this book. Long-Term Capital Management was almost guaranteed to fail from its outset and, when the end finally did come, the fund's collapse almost took a big chunk of Wall Street with it. The scary part is that there are more LTCMs out there, operating without regulatory oversight and all subject to wrong-headed economic hypothesizing as the basis for their trading operations.

The poison pill at the center of Long-Term Capital Management's very being was the efficient market theory, an almost universal belief among economists and financiers alike that free markets always operate in the most effective, logical manner possible over the long term. They don't, of course, and that refusal to acknowledge fundamental human irrationality led LTCM over the brink.

Lowenstein does an outstanding job of untangling the fund's complicated derivatives trades and explaining how the fund eventually over-leveraged itself into a sudden collapse. We normally read business stories like this for the thrill of seeing moral hazard at work, seeing the rich fall from grace and thinking how well-deserved that fate is. I would recommend, however, that you approach this book as a template for how the next Great Depression could spring from the simultaneous self-destruction of derivatives trading firms. And thanks to Roger Lowenstein, you don't have to be a genius to see how it could happen. ... Read more


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