Practical analysis for investment professionals

Book Reviews


Active Share Is a Fuzzy Number

Active share’s popularity has largely been driven by two factors. First, it appears simple and intuitive; active share is the proportion of a portfolio’s holdings that is different from the benchmark for that portfolio. Second, the investment industry has become fascinated by the debate over the link between the level of active share and outperformance of the benchmark.

Book Review: Get What’s Yours

This book provides an overview of the Social Security system, detailing its benefits and how they are calculated, with a focus on the general strategies for maximizing benefits.

Book Review: The Nature of Value

Incorporating concepts from evolution and ecology, this lucid and thought-provoking book presents the economy as an evolutionary system on the premise that an understanding of how evolution works in the biological realm provides insight into this process. It will help allocators improve their allocation decisions and will help all investors attain a more robust understanding of the dynamics that create and sustain value.

Book Review: Advanced Equity Derivatives

Sébastien Bossu reviews important concepts and recent developments in option pricing and modeling, including the latest generation of equity derivatives: volatility and correlation derivatives. Readers should have some familiarity with basic equity derivatives pricing and advanced mathematics because this book references the Black–Scholes model and other formulas for exotics.

Book Review: Strategic Value Investing

This book provides a broad overview of value investing and detailed implementation guidelines for a wide variety of value-investing disciplines. The book focuses more on guiding readers in selecting and applying their own approach to value investing than on stories of how the “gurus” achieved success.

Book Review: Keynes’s Way to Wealth

In this examination of the life and investment strategies of John Maynard Keynes, the author argues that the great economist and risk-taking investor believed that it is best to put your investing on autopilot with a sound plan that meets your goals — revisiting it once a year — and then go out and live your life.

Book Review: The Nature of Investing

Katherine Collins, CFA, urges us to transform the investment process from the roots up by drawing on biomimicry — a new discipline that studies nature’s best ideas and then imitates these designs and processes to solve human problems — to help us construct our investment portfolios.

Book Review: Systemic Risk: The Dynamics of Modern Financial Systems

The global financial crisis revealed a critical need for a substantial reassessment of the fundamental workings of financial systems, their interactions with the real economy, and the circumstances that tip such systems from stability to instability. In this book, Prasanna Gai provides a fresh look at these increasingly important fields.

Book Review: Numbersense: How to Use Big Data to Your Advantage

In the era of Big Data, the increased volume of data analysis inevitably entails an upsurge in bad analysis. The author argues that consumers should be extra vigilant when interpreting and relying on data analysis and encourages readers to improve their critical assessment of data analysis to optimize decision making.

Book Review: Rethinking Expectations: The Way Forward for Macroeconomics

Rethinking Expectations provides fresh approaches to macroeconomic analysis, including imperfect knowledge economics (IKE), which models individual behavior and aggregate outcomes and explores the frontier of what formal macroeconomic and finance theory can deliver. These new approaches are needed, given the recent Great Recession and spectacular boom and bust in asset prices.



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