book reviews

136 Posts

Book Review: The Power and Independence of the Federal Reserve

Book Review: The Power and Independence of the Federal Reserve

In this fascinating study of the Federal Reserve System, Peter Conti-Brown shows that much of what investors know about the formulation and implementation of US monetary policy is wrong. He also demonstrates that much of the expert commentary in the media (e.g., regarding future interest rate actions) proceeds from false premises about the central bank’s internal dynamics. Although practitioners should not accept all of Conti-Brown’s conclusions uncritically, they can assuredly profit from his debunking of conventional wisdom about a key driver of the financial markets. Read more

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Book Review: Risk

Book Review: Risk: Your Global Guide

Risk: Your Global Guide is a slim but valuable guide to risk management and fraud detection. The book’s message is simple: Understand the basic principles of finance, reduce unintended risk, and obtain a level of reward commensurate with the level of risk that you assume. This high-level perspective allows the reader to see the big picture and understand how fraud at the highest levels of finance and government affects ordinary citizens. Read more

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Book Review: The Index Revolution

Book Review: The Index Revolution

Author Charles Ellis, CFA, contends that structural changes in the US market have eliminated the prospect of outperforming average market returns, after fees, through active management. The causes include the rise in institutional and high-speed machine trading and changes in regulation. Active management may still pay off in low-efficiency markets, such as high-yield bonds and emerging market debt. The book does not address findings that the most active stock pickers who take large but diversified positions unlike the index weightings beat their benchmarks. Read more

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Book Review: Hedge Fund Investing

Book Review: Hedge Fund Investing

This introduction to hedge funds is also an instructive work of financial history. It discusses hedge funds in relation to other assets and describes specific hedge fund strategies in detail. It also delves into the nitty-gritty of hedge fund operations. Practical rather than theoretical, the book contains worked examples. And a companion website provides practice questions and guideline answers. Read more

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Book Review: Opening Credit

Book Review: Opening Credit

Focusing on traded credit, the authors lay out the basic principles of fundamental corporate credit analysis and illustrate the key elements with recent examples. They explain why credit analysis should be focused on management rather than reported financial results. To be useful to credit analysts, financial results should be adjusted to reflect the company’s “economic behavior.” The authors also discuss common company manipulations and effective methods for dealing with these manipulations. Read more

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Book Review: Trading and Electronic Markets

Book Review: Trading and Electronic Markets

Going beyond the traditional fundamentals of trading that are covered in academia, Larry Harris, CFA, explores the motivations and goals of the wide spectrum of traders, including profit-motivated traders, utilitarian traders, and the newest breed of traders — those resulting from the growth of electronic markets. Understanding other market participants’ motives allows traders to determine the most opportune time to trade. Read more

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Book Review: Money Changes Everything

Book Review: Money Changes Everything

In this extensive review of the history of finance, William Goetzmann covers the evolution of finance from ancient times to today, historic contributions to the financial system from around the world, and the ways the finance industry has affected the world around it. Interwoven throughout the rigorous history lesson are excellent practical suggestions for today’s investment practitioners based on Goetzmann’s analysis of the events of the past. Read more

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Book Review: Environmental Finance and Investments

Book Review: Environmental Finance and Investments

The authors analyze environmental commodity markets and how they can attract investments, focusing on the application of market-based instruments to incentivize the behavior and change needed to deliver environmental quality and mitigate environmental risk. This book can be read linearly, chapter by chapter, or it can be used by fund managers, regulatory investors, and green-finance experts as a reference to gain valuable insights into how to manage carbon markets. Read more

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Book Review: Capital Returns

Book Review: Capital Returns

Although a collection of company analyses may not seem like compelling reading, this volume covers an important and underappreciated topic and boasts a superb introduction by one of the great financial writers of our era, Edward Chancellor. Both real-life and fictional examples help readers deepen their understanding of the capital cycle and teach managers and analysts capital cycle pitfalls to avoid. Read more

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