Efficient-capital-market Books

Haugen's New Finance offers a value-biased review of modern investment management research. The book leaves the reader with a tangible if not implementable example of a value-oriented quantitative investment strategy.

This book and John Cochrane's "asset pricing" complement each other very well. Bossaerts discuss extremely important and overlooked issues in asset pricing theory and empirics in a very compelling way.
As a practitioner with an advanced degree, i found it a valuable read, and recomend "the paradox" to any serious finance practitioner or graduate student.

Let me end quoting the book (p.84):

"Asset pricing theory is both elegant and logically compelling. It is a nice piece of applied mathematics. But this is not suficient to conclude that it has scientic merit. To establish the latter, its predictions need to be verified in a variety of contexts."

Couldn't agree more.

Book came fast and was brand new - free 2 day shipping and the book has a lot of great information for healthcare organizations - The cases are fantastic and provide great real life situations.

I used this text for a class in health care management. I was impressed by the readability of the text, the incredible amount of information it contained, and the great balance of theory with practical approaches. Many books about management are a bit short in the area of practical tools. This one gives you tools to work with. I used the outline of this book to do a strategic analysis of an organization with which I work. The only significant weakness of the book is the uneven quality of the case studies. These were contributed by outside authors. Some of these are terrific, others are not well written and not so helpful. Hope this gets corrected in the new edition.

I would highly recommend this book. It is easy to read, methodical in approach and provides a balance of relevant theory and application. A useful resource for any healthcare organization expanding its services within existin country or beyond.
Thanks extended to the authors...I look forward to other additions!!!

This is an outstanding book. While naturally oriented to strategic management of health care it is also a comprehensive framework to strategic management in general. The book's layout is that of a university textbook but it is also written in an enjoyable style. I read this book as a practitioner and not a formal student and found it extremely readable and helpful. The authors present both conceptual and practical tools for strategic management.

I was fortunate enough to be a student of Linda Swaynes @ UNC Charlotte. We were the first class to use this book. Not only was Ms. Swayne excellent at what she taught but the book was a tool that explained the theories in nice detail. I continue to use the book as a resource. I am currently a hospital CEO.

It is nice to have someone spell out exactly why the market can be inefficient. In this regard, Robert Haugen makes a valient and concise attempt to tackle the subject. A quick and easy read that will help articulate that which is intuitive.

I read Haugen's book as an finance undergraduate. At the time I found the material quite compelling. As I go about reading the book some 9 years later, I now see some of the common criticisms as valid.

As a student, the material was brought to life by an excellent professor at Michigan State University. He was able to provide additional evidence and support for Haugen's arguement. Without the benefit of a good professors insights, the book does seem arrogant to a point of distraction. Not only is arrogance an issue but Haugen's writing style is hardly even par for the academic tome it claims to be.

My opinion of the material has not changed. I still find Haugen's point of view compelling and persuasive. I just find it unfortunate that so many will be left un-convinced primarily due to issues of style. If you choose to read this book, try your best not to reject the message along with the messenger.

FYI, I believe "Qualified Opinion" from NY was wrong when he desribed how EMH means market-superior returns are possible. EMH should mean that all information is priced into securities and thus, it is impossible to beat the market. Haugen's theory rejects this and suggests that due to market innefficiencies, superior returns are possible by choosing a Value strategy. Efficient market hypothesis is also referred to as "random walk" theory because it results in an inability to chart the market. Proponents of EMH suggest selecting Index funds to simply accept the market return.

This book is controversial.
It defends the opposite of what almost all mainstream financial academics belive : Markets are inneficient and somehow forecastable by a money manager with proper analysis tools. Thats exactly why this book is important for a serious finance thinker. It forces one to rethink key assumptions - yes, Haugen's arguments, reasoning and numbers are convincing - for a better understanding.
An open minded reader with adequate finance knowledge (beginners wont benefit much) will truly benefit from this challenging book, be it changing his mind/view on finance (accepting some of haugen's ideas), or simply reassuring his own previous belifs/approach.

Only a courageous professor willing to really find truth would write this insightful book. The fact that he also has a great sense of humor is to be greatly commended. This man deserves a Nobel Prize. It APPEARS THAT HE WILL BE ABLE TO FUND IIT!

"The New Finance" has basically everything going against it.

First, Haugen's writing style is annoying and childish. An engaging use of humor and metaphor are apparently beyond his skill.

Second, Haugen's story is unconvincing. The case against the efficient market hypothesis has been made much more rigorously and interestingly by other authors (e.g. Andrei Shleifer, Hersh Shefrin, and Richard Thaler, among others). Haugen in some case makes mountains out of statistical molehills and misses vital information in others. In short, Haugen is neither convincing nor complete in his critique. The field of economics covered here has a name, by the way, which Haugen never once cites: behavioral finance.

Third, in many cases Haugen is just plain wrong in his assertions. The cases are too numerous to count, but I'll give two examples from page 12. First, Haugen asserts that if no one uses the CAPM to construct their portfolios then markets cannot be efficient. This is not true. The efficient market hypothesis can hold, as Milton Friedman pointed out, if people act AS IF they use the CAPM, even if they don't really use it. Second, of evidence that markets generally react to new information quickly and without bias, Haugen says "Not true." Which is overstating the case, if not outright misrepresenting it. While there is some evidence of investor overreaction and/or underreaction, the case is far from closed. Moreover, anecdotal evidence of occasional over- and under-reaction does not prove the efficient market hypothesis to be a "Fantasy," as Haugen claims.

Fourth, and this point is somewhat related to the third, Haugen is far too full of himself. Assertions of his own intellectual superiority cloud his arguments and reasoning. This can be dangerous when dueling with men like Eugene Fama, Harry Markowitz, Bill Sharpe, and Milton Friedman. More importantly, it leaves Haugen apparently very comfortable making blanket, absolute statements about financial economics that no self-respecting, respected, or respectful economist has any business making. And I say that not only because Haugen is very frequently wrong. It also isn't very becoming. And since the material in this book is reviewed in far superior books, there is little reason to pay much attention to Haugen and his rantings.