Books on Investing: Discussions, Reports & Suggestions
- bob90245
- Normxxx
- bob90245
- Normxxx
- allancoleman
- Normxxx
- Thruhiker
- Normxxx
- Normxxx
- BoltonCT
This archived discussion is "read only".
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» bob90245 - Re: Holiday Reminder
In response to Holiday Reminder posted by Kirk:My candidate for best (but not perfect) book gift for the beginner is The Random Walk Guide to Investing: Ten Rules for Financial Success by Burton G. Malkiel.
-- posted by bob90245
» Normxxx - Re: Re: Holiday Reminder
In response to Re: Holiday Reminder posted by bob90245:Ah-h-h, but the market is not a random walk (a.k.a. Markov Process)-- as many mathematicians have pointed out. It is a martingale!
So beware getting killed by 'fat tails' or 'black swans.'
-- posted by Normxxx
» bob90245 - Re: Re: Re: Holiday Reminder
In response to Re: Re: Holiday Reminder posted by Normxxx:So beware getting killed by 'fat tails' or 'black swans.'
Death by foul play. <img src=http://www.suite101.com/images/emoteicon...>
-- posted by bob90245
» Normxxx - Barron's 25 Best Books of 2004
Barron's 25 Best Books of 2004
Investment magazine Barron's, one of the few mass-market investment publications worth subscribing to, has published a list of the 25 Best Books of 2004. Here they are:
Against All Enemies: Inside America's War on Terror
America's Secret War: Inside the Hidden Worldwide Struggle Between America and Its Enemies
The Coming Generational Storm: What You Need to Know about America's Economic Future
The Corporation : The Pathological Pursuit of Profit and Power
An Empire of Wealth: The Epic History of American Economic Power
The End of Oil : On the Edge of a Perilous New World
Fortune at the Bottom of the Pyramid
The Frankenfood Myth : How Protest and Politics Threaten the Biotech Revolution
Imperial Hubris: Why the West is Losing the War on Terror
Lessons from the Greatest Stock Traders of All Time
The Next Great Bubble Boom: How to Profit from the Greatest Boom in History, 2005-2009
Noble Rot: A Bordeaux Wine Revolution
Other People's Money: The Corporate Mugging of America
Running Money : Hedge Fund Honchos, Monster Markets and My Hunt for the Big Score
Stocking Up on Sin : How to Crush the Market with Vice-Based Investing
Testosterone Inc.: Tales of CEOs Gone Wild
They Made America: Two Centuries of Innovators from the Steam Engine to the Search Engine
Trade Like a Hedge Fund : 20 Successful Uncorrelated Strategies & Techniques to Winning Profits
The Truth About the Drug Companies: How They Deceive Us and What to Do About It
The Working Poor : Invisible in America
The links are to Amazon; if you buy anything from Amazon though one of these links, Suite101 gets paid an affiliate fee without it increasing the cost to you. Many thanks to all the people who have supported Suite101 by buying though the Amazon links on the site and responding to the pay-per-click ads - it's really appreciated, and it means the site doesn't have to solicit donations or charge for subscriptions to support the costs of publication.
Email a link to this page to a friend (uses your own email program so you can add people easily from your address auto-complete or address book).
-- posted by Normxxx
» allancoleman - Re: Barron's 25 Best Books of 2004
In response to Barron's 25 Best Books of 2004 posted by Normxxx:
there is a book review Normxxx on ' The (Mis)behavior of Markets ' by Benoit Mandelbrot and Richard Hudson on message #430 on your forum , " Normxxx Ruminates on the Markets " on november 25th , this year .
-- posted by allancoleman
» Normxxx - Re: Re: Barron's 25 Best Books of 2004
In response to Re: Barron's 25 Best Books of 2004 posted by allancoleman:Yes. I read it and was very impressed. But I hesitated to comment (yet) because I would just have to be drawn into a discussion of martingales ('random walks' with memory) and Kalman Filters, etc. It is a very hairy (and hoary) topic... Leads to 'fat tails' and 'black swans.'
-- posted by Normxxx
» Thruhiker - Re: Barron's 25 Best Books of 2004
In response to Barron's 25 Best Books of 2004 posted by Normxxx:.
Thats a verrrry interesting post in more ways than one.
-- posted by Thruhiker
» Normxxx - AGAINST THE GODS
<img Align="Left" src="http://images.amazon.com/images/P/0471295639.01._PIdp-schmooS,TopRight,7,-26_PE30_SCMZZZZZZZ_.jpg">AGAINST THE GODS: The Remarkable Story of Risk By Peter L. Bernstein
Wiley -- 383pp -- $27.95
Statisticians, in the telling of Peter L. Bernstein, are nothing less than Promethean heroes. He argues that the people who mastered the calculation of probabilities, beginning in 16th century Italy, stole from the gods something more precious than fire--namely, the understanding of risk. We can't see the future, of course, Bernstein writes in Against the Gods: The Remarkable Story of Risk. But by calculating probabilities, we can do the next best thing: make intelligent decisions--and take control of our lives--on the basis of scientific forecasts. The mastery of risk is the foundation of modern life, he contends, from insurance to the stock market to engineering, science, and medicine.
Against the Gods sets up an ambitious premise and then delivers on it. This is a lively, panoramic book that includes tales of everyone from Omar Khayyam to Florence Nightingale to Daniel Ellsberg. Khayyam, the poet, was also a mathematician. Nightingale, the nurse, once offered to fund a chair in applied statistics at Oxford University. And Ellsberg, the Defense Dept. analyst who leaked the Pentagon Papers, specialized in the behavioral psychology of risk-taking.
Bernstein argues that the mastery of risk is what divides modern from ancient times. The ancient Greeks, for example, adept as they were with numbers, regarded mathematics as belonging to a higher plane, unsuited for the messiness of daily life. Amazingly, Bernstein says of dice-rolling: ``Though people played these games with insatiable enthusiasm, no one appears to have sat down to figure the odds.'' Anyone who did would have cleaned up.
Someone who did try to clean up is Bernstein's first hero, Girolamo Cardano, a Milanese born around 1500 who was not only a famous physician but a compulsive gambler. His vice led to his greatest achievement: publishing the first serious work to lay out the statistical principles of probability.
From then on, things happened quickly. Over the years, the field of risk attracted such giants as Galileo, Pascal, Newton, Gauss, Poincare, von Neumann, and Keynes. All of them come alive here. Blaise Pascal, for instance, is remembered as a religious philosopher. But as a youthful mathematician, he teamed up with Pierre de Fermat--famed for the mathematical puzzle known as Fermat's last theorem--on a solution to an old conundrum: how to divide the stakes of an uncompleted gambling game. With its implications for prediction in other fields, Bernstein says, Pascal and Fermat's solution became ``the cornerstone of modern insurance and other forms of risk management.''
Confidence in probability and statistics reached a high-water mark in the Victorian era. By the 20th century, confidence waned a bit. Long-run averages aren't always helpful, John Maynard Keynes famously observed, because ``in the long run, we are all dead.''
Next to take a crack at risk were game theorists, led by John von Neumann, the mid-century genius of bomb-making and computing. Game theory presented life as a contest in which people seek to maximize rewards and minimize risks--while others do the same, often with conflicting objectives. Many game theorists repeated a mistake of the Victorians, by having too much faith that human behavior could be modeled mathematically. Still, their insight paved the way for modern portfolio theory, which says diversification reduces risk. Harry Markowitz put forth the theory at age 25 in a 1952 paper in the Journal of Finance.
Bernstein brings Against the Gods up to the present with an account of how some skeptical researchers--beginning with the Israeli-born psychologists Amos Tversky and Daniel Kahneman in the 1950s--trashed the classical model of rationality by exploring how people actually behave in risky situations. The bottom line: People behave irrationally, even when they know they are doing so. Bernstein relates an anecdote about a distinguished Soviet professor of statistics who showed up at an air-raid shelter during a German bombardment. Until then, he had scoffed at the prospect of being hit. What changed his mind? ``Look,'' he explained. ``There are 7 million people in Moscow and one elephant. Last night, they got the elephant.''
Like Girolamo Cardano, Bernstein himself is a Renaissance man. He's not only an author--Against the Gods is his sixth book--but a working Wall Street economist who consults for institutional investors and companies. Against the Gods is loaded with tidbits of modern economic research and war stories from Bernstein's 40-year career, which makes for an enchanting blend of history and investment advice.
Bernstein clearly relishes this stuff. In a chapter on derivatives, he devotes two pages to describing an intricate ``cotton loan'' issued in 1863 by the Confederacy. Then, he launches into the principles behind the model for the proper pricing of options that was developed in the 1960s by Fischer Black, Myron Scholes, and Robert C. Merton.
After the early chapters, there's not much here outside of finance, which is clearly Bernstein's main interest. Even within finance, Bernstein gives short shrift to important topics such as Monte Carlo analysis, which uses computer-generated random numbers to solve intractable problems. But that's O.K. Bernstein covers plenty of ground as it is. And he does so with the verve of someone who has lived his subject.
By Peter Coy
-- posted by Normxxx
» Normxxx - Get These Great Books While They Last!
Get These Great Books While They Last!
| Conquer the Crash by Robert R. Prechter, Jr. Bob Prechter, the world's foremost authority on Elliott Wave Theory, builds his case, block by block for the onset of a deflationary depression in the U.S. Prechter also outlines a common-sense financial strategy for surviving the rough times ahead. | |
| On Money and Markets by Henry Kaufman For most of two decades, Wall Street and Main Street waited in anticipation for the words of Henry Kaufman, vice chairman of Salomon Inc during most of the 1980s. His pronouncements had the power to prompt dramatic swings in both the stock and bond markets. In fact, it was his remarkable prescience that ignited the bull market that is still running today. This financial titan routinely ranked as one of the ten most influential figures in the financial United States. | |
<img src="http://g-images.amazon.com/images/G/01/x-site/icons/no-img-sm.gif" border="0"> | Devil Take the Hindmost: A history of financial speculation by Edward Chancellor A fun and informative tour of financial manias throughout history. |
| Manias, Panics and Crashes - A history of financial crises by Charles Kindleberger Selected as one of the ten best investment books of all time by the Financial Times This updated version of Charles P. Kindleberger's celebrated classic takes readers through virtually every major crash and financial panic on record. From the currency devaluation in the Holy Roman Empire in 1618, through the California gold rush of the 1840s and 50s, all the way up to the crash of 1987 and the Peso devaluation, this is an engaging, lively, and exhaustive account. | |
| The Great Crash of 1929 by John Kenneth Galbraith Reviewing Galbraith's classic examination of the 1929 financial collapse, The Atlantic Monthly said, "Economic writings are seldom notable for their entertainment value, but this book is. Galbraith's prose has grace and wit, and he distills a good deal of sardonic fun from the whopping errors of the nation's oracles and the wondrous antics of the financial community." For this edition, the celebrated economist has written a new introduction with fresh insights on the legacy of our past. | |
| At the Crest of the Tidal Wave - A forecast for the Great Bear Market by Robert R. Prechter, Jr. At the Crest of the Tidal Wave combines technical analysis with insights into history and economics to warn investors against the commonly held belief that investments will always go up. But this is not just a doomsday book--Prechter also provides solid guidance on a rescue strategy for investors. | |
| Business Cycles by Lars Tvede From John Law to Chaos Theory. | |
| America's Great Depression by Murray N. Rothbard Rothbard turned the conventional one on its head arguing that the severity of the Wall Street crash was not due to the unrestrained license of a freebooting capitalist system, but to government insistence on keeping a boom going by pumping in inflationary credit. | |
| Debt and Delusion by Peter Warburton Central bank follies that threaten economic disaster. |
-- posted by Normxxx
» BoltonCT - The Number, by Alex Berenson
I have just started reading "The Number" written by Alex Berenson. The introduction was written by Mark Cuban, the billionaire, who got out before the great bubble of 2000 collapsed. It is one of the most honest portrayals of the stock market that I have ever read. Basically they present evidence that there is a market "Ponzi effect" that makes the market inefficient but which is a source of great profit for those who understand it. Mark says he made his fortune exploiting it on the long and the short sides.The Ponzi effect depends on exploiting those with a "buy and hold" mentality, as do all Ponzi schemes. By definition the Ponzi scheme takes money from new clients to pay the profits of the earlier clients. Therefore the con requires that the number of new suckers be larger than the number who are cashing out. Therefore the victims must be encouraged to "buy and hold."
The Ponzi scheme is self limiting. Eventually even a small percentage of unfaithful skeptics taking profits will cause the scheme to collapse because the core group of "buy-and-hold" victims becomes so large that the small percentage who take their profits become large enough to wipe out the cash influx from the new suckers born every five minutes (from a P.T. Barnum quote).
The Ponzi effect was clearly evident this past month and Richard Russell was valiant in refusing to call the mini-bubble a legitimate bull market.
The cash flow out of the market today triggered the sell signal for my Market Cash Flow Index MCFI for the NASDAQ. Today it was ten times as great an outflow as the average outflow that began during the last month. It indicates that about 90% of the money that flowed in during the last market advance has now flowed back out. This could be a very deep correction given that it has only just begun.
My NYSE MCFI never ever reached a buy threshold in spite of the mini-bubble due to the low inflow of cash supporting the bubble in the lower beta stocks.
-- posted by BoltonCT
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