Fund-of-funds Books

Ms. Wagner does an excellent job on helping the reader understand how fundraising fits into the world today, including concrete suggestions on how to be the best professional. By enlisting other experts in the field, Ms. Wager taps into a wealth of information that expands her own understanding and expertise. I first purchased this book as someone who was in the middle of a career change. I was able to use the information in this book to help identify the direction I wanted to take. As I am now looking into the next phase of my career, I am using tapping into the information in this book to help as I plan my next steps.

I would highly recommend this book to anyone either entering into, or already in, the fundraising profession.

Dr. Wagner first begins by providing the reader with an understanding of how fundraising fits into today's world and then she transitions into suggestions on how to be the best all-around professional in your field. Over time the material in this book will continue to be helpful and can serve the interest of people at all levels of fundraising, as well as professional outside the field. This is an inspirational book that is extremely thought provoking and no professional should go without reading!

This is my favorite book to give to new fund raisers or people considering fund raising as a career.

Dr. Wagner's book is insightful. From understanding the history of fund raising and philanthropy to finding the right job, this book examines the major topics one should consider when considering a career in fund raising.

The book won the Skystone Ryan Prize for research on fundraising and philanthropy for good reason.

One thought that struck me as I read this book is that I wish it had been available when I made a career switch several years ago. I recommend it to individuals who engage me for career networking interviews. It also provides a good uplift to professionals already in the field - the numerous resources are worth the price of the book alone! The book is very readable and full of wonderful advice and wisdom - a trademark of the author.

This book reminds us that philanthropy is noble, and that a career in fundraising is a challenging but worthy professional path. The book offers very practical approaches to fundraising, and to coping with the stresses and triumphs of the profession. It's a practical handbook for every professional who seeks success in fundraising.
-Adam G. Martinez

This book is a well-written exposition about becoming a millionaire. The central theme of the book is simple: put a fixed amount of money each month into an S&P index fund--if you can have the money automatically deducted from your checking account, so much the better. The reason why Millionaire does not get five stars is because the system is not sure-fire. Although the authors cite the United State's upward productivity and stock market, you can't drive a car by looking in the rear-view mirror. What if you lived in Japan (where the Nikkei average has crept lower for the past twenty years) and followed this advice?

This is a short and simple guide to investing. It's easy to read, easy to understand and provides a straightforward plan for accruing wealth.

What a wonderfully written book on how to succeed in accumulating wealth. Extremely well written. Sound advice. Excellent ideas that make perfect sense. My only regret is that this book wasn't written 30 years ago! Should be read by everyone from 25-to-60 who hasn't given serious thought to investing for retirement or for their future. My compliments to the authors.

Was there an editor's strike in New York and nobody told us? If you're one of those people who finds the "Dummies" series of books too complex and technical, then this is the tome for you! 160 pages of homespun homily about the authors, their family and friends, lots (WAY lots!) of success/failure stories. I was midway through this (thankfully) short book before the authors approached anything of substance as far as how to set out a savings plan. But then, there's nothing here you've not read before (save money, do it now, don't give up.) Venita VanCaspel did a much better job of making invesment planning more user-friendly than this facile, rambling collection of stories of the writers' buds. Instead of an investment guide, this reads more like a gift book from a shopping mall card store. What would have made this a GREAT book? As Sargeant Joe Friday was so fond of saying: "Just the facts, ma'am." But then it would have been a "pamphlet" rather than a "book."

In some ways, it is unfortunate that a book like Millionaire is necessary. However, the personal savings rate in this country is so low (at some times even negative) that in aggregate our country faces a staggering financial crisis as the aging population nears retirement. Complex investment strategies are not what most people need. It's a simple, low-cost, sound, systematic, long-term plan for dealing with the high cost of retirement. This is what Millionaire is all about.

I would highly recommend this book, and I would also highly recommend the Government Funding and You book and video series. Click the link below for more information.

Government Funding and You: Registering For Grants On-line 2007 book and video series.

this book really sets you up with the information you need to know about funding. it's nice that there is an example of a grant in the book to help you understand exactly what you need.

Now in an expanded and updated second edition, Shaking The Money Tree: How To Get Grants And Donations For Film And Television by Morrie Warshawski is a ground breaking instructional manual in the art of fundraising for the financing of noncommercial film and video projects. Presenting the basics of how to apply for and earn grants and/or donations from individuals, foundations, government agencies, corporations, and more, Shaking The Money Tree combines direct decorum with an invaluable insight for how the financial side of the film business really works, as well as being peppered with useful grant forms and superb grant writing examples. If you have a film or television project that you need to finance -- begin with a close and careful reading of Morrie Warshawski's Shaking The Money Tree!

This is a great book...after searching high and low and all over the internet, I found a concise, informative and helpful resource to walk me through the complex world of fundraising for media. I'm applying Morrie's suggestions to my movie's business plan. Everyone interested in film/video should read this book.

If I ever meet Morrie Warshawski, I will probably embarrass us both by giving him a huge hug. In 97 easy-to-read pages (plus another 60+ helpful pages with sample grant proposals, budget forms and a bibliography), he succinctly lays out a viable process for successfully seeking grants for film and television projects.

What struck me about "Shaking the Money Tree" was how it is actually a basic primer for all fundraising projects, not just film. Warshawski starts with the basics: developing mission and vision statements (Chapter 1 - "Laying the Foundation: Your Career"). While these steps should be obvious to any nonprofit organization, this is new territory for many independent filmmakers. Warshawski asserts "funding problems are almost always routed in a basic set of unresolved career issues." Not only does he contend that mission and vision statements are necessary, but that filmmakers must identify a set of values by which they choose projects and people with which to work. All of this, claims Warshawski, adds focus to filmmakers' efforts, and keeps them from wasting time on projects for which they have no vision or passion. Valuable lessons for any nonprofit organization.

For the rest of Chapter 1, Warshawski takes the reader through a series of career development steps: articulating major short and long-term goals; identifying people and organizations with which to interact in order to succeed; evaluating progress against the career goals; acquiring promotional tools to spotlight the filmmaker and his/her projects; and networking to avoid isolation.

In Chapter 2 ("Where's the Money?"), Warshawski provides an overview of the various categories of funding potentially available to a filmmaker (individuals, foundations, corporations, government agencies, other nonprofits). He correctly points out that there is an abundance of funding sources (not to be confused with an abundance of funds), but the challenge is determining which sources are appropriate for the particular project. He recommends creating a fundraising plan, identifying the most suitable prospects and determining the most effective way to formulate and make the request. (Again, a sound methodology for any nonprofit.) Warshawski identifies the upside and downside to each category, reviews how to find them and, generally, how to approach them (more information on research and proposals is provided in subsequent chapters).

Chapter 3 ("Patchwork Quilt - Putting Your Project Together") was one of my favorites. Warshawski points out that a major impediment to successfully finding funds is beginning fundraising before the project is fully developed and thus not being able to completely answer all of a potential funder's questions. He highlights the difference between "this is a story that must be told" and "this is a story that must be heard." As is the case with all fundraising, one must start with the need. Warshawski runs through the elements of a solid plan, and explains the questions that must be answered. He also points out that fundraising will take longer than a filmmaker might expect: one to two years to complete the funding is not unusual.

The remaining chapters - 4 ("Getting Personal - Individual Donors"), 5 ("The Paper Trail - Foundations and Government Agencies") and 6 ("All the Rest") explain the types of funders, their motivations and how to research them. He offers some excellent tips that the novice fundraiser/filmmaker might miss, such as Chapter 5's recommendation that, when researching foundations, don't just research "film/video/media/TV," but look for funders of the issue area(s) that the film is tackling. Most foundations are not really funding the film, but are funding the visibility to the subject matter that the film is providing. The last two pages of Chapter 6 provide "Morrie's Maxims" - sound advice for fundraising for any type of project.

I did have some quibbles with the book. The Public Broadcasting Service (PBS) is not a government agency. The address for the Foundation Center in Washington is out of date (the book was published in 2003, and the Center moved to 1627 K Street, NW in 2001). Foundation giving levels are directly affected by economic trends: foundation endowments slump when the stock market declines and the effect is often felt for several years after the stock market starts to recover (Warshawski makes it sound as though foundations are relatively immune to economic shifts, other than facing increased requests for support). And finally, it would have been helpful to mention that the National Endowment for the Humanities and National Endowment for the Arts will provide, upon request, samples of successfully funded film proposals under the Freedom of Information Act. But these are minor blips in an otherwise superb book.

There are two positive outcomes for a filmmaker who reads Warshawski's book and puts his words into practice: a funded project, and a successful second career as a fundraiser. "Shaking the Money Tree" should be required reading at all film schools. But even beyond that, it offers extremely helpful information for anyone who needs to raise money for a project.

Oh no, no. The Wealth of Nations didn't come out of the blue.
Adam Smith would probably be famous today for his 'other' book even if he had not written his second.
People do not understand the concept of self-interest well. They would if they read this book.

Ok, so the style needs work! Buy, hey, they wrote like that in the eighteen century.

This is not so much a review of the book, but the formatting. Unfortunately, Amazon lumps all reviews for the same "book" together, so I'll specify this one by its publisher: FQ Classics. If you're looking at another edition, feel free to ignore these comments. Anyway, the FQ Classics version has no table of contents and no cover, making the book nearly impossible to navigate quickly. Since Theory of Moral Sentiments is so useful as a reference, this severely hinders the usefulness of this edition. Additionally, the in-text table of contents (no links) refers to page numbers that don't exist on the Kindle. Do yourself a favor and buy the Oak Grove edition. It has an excellent table of contents which functions like it should!

The Theory of Moral Sentiments gets far too little attention. Smith's other book, The Wealth of Nations, is perhaps the most famous book on economics ever. Yet one can hardly understand the WON without also reading The Theory of Moral Sentiments. Many modern economists interpret the idea of the invisible hand of markets in terms of competitive general equilibrium. Other people simplistically assert that Smith believed that `greed is good'.

The Theory of Moral Sentiments is Smith's explanation of the moral prerequisites of capitalism. In keeping with the enlightenment, there is an optimistic tone to this book. We are naturally sympathetic and can be empathetic. Yet Smith is not naïve about less admirable human characteristics. The positive side of human nature must be nurtured.

The Theory of Moral Sentiments should receive more attention as a matter of history. After all, this is a major part of Smith's explanation of commercial society. We cannot understand Smith with the Wealth of Nations alone. More importantly, the lessons of this book are no less valid today than they were centuries ago. We must follow Smith by delving deeply into moral issues if we are to really understand the potential benefits of commercial society.

There is no doubt Adam Smith is one of the greatest minds in history and this book embodies his insights on human nature. He did a theoretical review of ancient perspectives on moral theories, followed by his comments on each of the different schools of thoughts. It is always enjoyable to see how he explains and refutes on the fallacies of those thinkings, and in the process offers refined versions to the original.

Though several examples of his brilliance have been mentioned by other comments, two uncited instances/traits of this book are probably worth mentioning:

1.) His insights on the system of sympathy. His analysis on sympathy is about as clear and concise as one could get, and is definitely enlightening to those not well learnt in moral philosophy. Symphathy, accordingly, is the basis for much of human emotions, and he argued forcefully on how the system of sympathy works in shaping our bahaviors and emotions, and how sympathy works differently when perceived situations changed. However, his usage of the word `sympathy' seems to cover the domain of both `compassion' and `sympathy' in normal man's vocabulary, indirectly suggesting that both are actually the same sentiment but differed because of different standpoints. Though so, one of his greatest contributions to moral philosophy is in the construction of this descriptive system of sympathy.

2.) His ability to strip twisted logics into manageable pieces and reconstruct them into good logic. For example, he explained that the doctrine of Bernard Mandeville, who "by means of this sophistry that he establishes his favorite conclusion, that private vice is public benefits." It is obvious from Adam Smith's point of view that private vice is not equal to public benefit, but because of the sophistication of the logical deduction involved, the less skillful or diligent minded people will fall prey to it. A quote from Part VI Section VII "These, described and exaggerated by the lively and humorous, though coarse and rustic eloquence of Dr Mandeville, have thrown upon his doctrines an air of truth and probability which is very apt to impose upon the unskillful."

Anyway, there's lots of wisdom in this book, so read it slowly and only when you could focus your attention on it. There are some who find this book too long, but frankly it is not. Every sentence makes a point.

Lastly, a favorite quote for your enjoyment:

"Though none but the weakest and most worthless of mankind are much delighted with false glory, yet, by a strange inconsistency, false ignominy is often capable of mortifying those who appear the most resolute and determined."

I guess it says so somewhere in the fine print, perhaps even in the medium sized print. But I just wanted a copy of TMS and this one seemed reasonably cheap. So I bought it. It's a pamphlet consisting of the first 'book' or chapter. In other words, sold as TMS it's a hoax - probably about a third to a fifth of the actual book.

And I'm in Australia so I doubt there's any mileage in returning it.

TMS is a great book. This is not.

All my missionary-in-training students spend a minimum of week going through every page of this book. It's a regular part of our YWAM School of Evangelism (SOE) in the Philippines. I wouldn't run a school without taking our workers through these principles and than doing our best to apply what we've learned I've been using it for six years!!

An absolute must for all those in the US and other English speaking countries (I am from the UK) who need to raise funds to participate in Gods work. Fun and easy to read with a huge amount of good solid information and practical tips.

We used this text in our Ministry Partnership (fund raising) training at Mission Aviation Fellowship. I found that it answered a few theological questions that I had about fund raising very well. It was also a very practical how-to book

This book is THE book to purchase if you are venturing into the world of raising support. Simple, effective, practical, easy to read. I highly recommend it.

This is an excellent source for anyone considering raising support. It helps you understand your attitudes toward fundraising and leads you to understand the biblical basis for ministry support.

I found this book interesting in several regards. I have enjoyed the writings of Doris Lessing very much. As an author she went through three distinct and overlapping periods, one as a feminist, one as a socialist, and one as a Sufi student. Following the insights gained through her contact with Sufi teachings (which show up strongly in THE FOUR GATED CITY and in the Shikasta series), she shares the theme of "influence", all the ways which we are influenced to conform to group think and to make purchases of items we either do not need or which are not healthy for us. There are roots to why these conformist pressures work, some biological and some sociological. Lessing discusses these. The book lacks documentation for some of the assertions made, but I think this is understandable because they were lecture transcripts and because Lessing herself is speaking more from what she observes. There is an assumption that we can take her words as a lens and look at what is going on through them. Most of the themes are present in our daily lives, if we are awake enough to look and verify them. It takes a kind of self reflection that is part of Sufi training. She does not present her observations as a Sufi exercise, though, but simply invites listeners/readers into a self reflection about what is going on, and then perhaps curving back to ourselves to see how we are influenced and how we can break free of this. This particular edition has a beautiful black and white picture of Lessing inside the front cover and a one page biography. Unlike many of her writings, this book is a fairly speedy read, making it an ideal introduction to her writings.

I love Doris Lessing! I have read many of her works of fiction but, I am new to her essays. I was blown away by her honest "bird's eye view " of our world. She has the insight to look around us and truely see what the world has become and how we got here. Her points are simple yet, seem to escape most of us. Reading Prisions will give a first time reader the oppertunity to experience the witt and prose of a master. After finishing try The Fifth Child!

In a time of polarization, Lessings small book shines a much needed light on how we use out-groups and outsiders in general as projection points for the feelings that society and religion tell us are unacceptable. We want to think of ourselves as noble when we identify some evil to correct and go about righteously eradicating it. Unfortunately, the core problem is that we are angry and feel a need to hurt someone or something. That is the real evil that we never look at. How noble were the people in her book who cut down a beautiful and historic tree because it was used to hang someone they liked? Was it the trees fault or did their need to express rage simply find a helpless victim?

The behaviors discussed in this book need to be recognised, not only because we will engage in them without thinking, but because they can be used against us by governments, religions and other social groups who fully understand their power. No group can survive for long if the natural aggressions of its members is not diverted toward some outside source. Every group is going to have something, or someone that they are against.

While she can go on too long in making some points, If you really think about the studies discussed in this book and began to apply them in your life, you will wakeup to some uncomfortable "slights of hand". Currently religion and politics in this country seem to be focused on homosexual marriage and abortion as "the problems". The message is, "spend your time fixing these people and you are part of the good group." You might want to stop for a moment and ask yourself why someone is trying to divert your aggressive feelings toward social groups and issues that there is a 95% likelihood you will never be part of and whose members are unlikely to ever impact your life. When that righteous feeling wells inside you ask yourself...what is this great group I belong to asking me NOT to look at?

Doris Lessing's collection of essays are very insightful into human behavior and how society is changing as a whole. Even though this collection is slightly dated, it is eerily appropriate for today and the current world situation. It has helped to change my perspective on current events and the world in general.

So often one comes across a piece of literature that asks for nothing from the reader, this is not one of those works.

We are all guilty of branding and labeling, the point is that one examine oneself during the process so that we understand the meaning behind those labels. AS humans we have a tendency to use words in ways that make them meaningless or less powerful. Yet the implications are still evident and strong. So often we fall prey to the whimsy of the age we live in, yet Lessing implores us to look deeper. If you enjoy the metaphysical in literature and other Lessing works such as The Golden Notebook, then Prisons we Choose to Live Inside will be a riveting read. Please do not become discouraged by those who say this is a tough read (or scholarly), this book is a MUST read for those of us who are, or would like to become more self aware.

The authors describe in detail how the RAFI index methology works and answer also many critisism to their approach. What is still missing is a significant real track record (they mix proforma and actual results, unfortunately). It also shows clearly the shortcomings of the current marketcapweighted indices. In short: Very important subject but maybe too many pages for one idea.

First of all, a market portfolio is holding capitalization-weighted stocks. So when Arnott says his "fundamental indexing" beats a cap-weighted portfolio (like on p. 160), he's simply making the same argument active managers make when they say they can beat the market.

It's important to note too that a fundamental index is only a fundamental index once per quarter. These things don't rebalance daily, folks. Even with quarterly rebalancing though, the turnover is higher than with cap-weighted index funds or ETFs. So that's one cost that fundamental indexing must overcome.

The other thing to point out is merely with the fact that more oversight and work is required on the part of the fund company, the expense ratio will be higher than a completely passive cap-weighted index fund. Are the higher fees worth the bet you're making on this strategy?

If markets are truly efficient, then cap weighting is the way to get the market rate of return. Anything else is almost by definition an active or quant (which is what fundamental indexing is) bet.

Your best bet as an investor is to skip the hype and go for the market rate of return.

With all that said, I do still recommend this book to further your investment education. I give it 4 stars out of 5.

I believe the book is a must read for professional investors as well as non-professionals, advisors, trustees and most certainly the academic community. It offers a (deceptively) simple explanation to a series of widely debated issues in modern portfolio construction. While I wouldn't dare entering into a debate with any of the rather well-known critics of the concepts I would propose that they all read the book carefully and contemplate the principle known as Occam's razor while doing so; "Occam's razor (sometimes spelled Ockham's razor) is a principle attributed to the 14th-century English logician and Franciscan friar William of Ockham. The principle states that the explanation of any phenomenon should make as few assumptions as possible, eliminating those that make no difference in the observable predictions of the explanatory hypothesis or theory." (Quote from Wikipedia) The Fundamental Index concept as such may not be new, other will have to be the judge of that, but at least I know of no other formalization of the concept, nor of any other text offering the richness in its explanations of the sources and applications of the concept. (Disclosure: I am on record as being a supporter of the concept and I work for a firm that is a Research Affiliates, LLC, licensee.)

This book written by the strongest advocate practitioner (Arnott) of Fundamental Indexing (FI) is well written. But, you should not confuse a FI manifesto for a balanced analysis on FI vs Market Cap Indexing (MCI). Arnott goes as far as stating that FI has redefined the entire investment Efficiency Frontier (pg. 241) as for any level of risk, he believes FI earns a higher return. And, for any level of return FI reduces your risk. To his credit, Arnott does a good job of addressing the main critiques against FI in chapters 10 and 11. However, for more challenging FI rebuttals, I recommend the articles by Paul Kaplan and Andre Perold.

The logical advantage of FI is unclear. In the Foreword, Harry Markowitz makes an example with a two stock portfolio and shows how stock mispricing will cause MCI to be over weighted in the overpriced stock. When such a stock reverts back to its fair value, MCI suffers a return drag vs FI. But, Andre Perold using Bayesian analysis, takes apart this exact same example because you don't know beforehand which stock is over valued. To further confuse things, Arnott early in the book (page 38) contradicts himself. He states that a MC index does not have a negative Alpha. But, capitalization weighting does. That's not possible. Either they both incur negative Alpha, or they don't (besides the minor cost difference). Later, on page 208 according to his own analysis, Arnott recognizes that with large caps only 1/3 of the FI value added comes from its actual structure. The other 2/3 come from small cap and value tilts.

To clarify this issue, I will review: a) what I expect the difference between FI and MCI to be, b) the historical records, and c) the FI outlook.

Because FI is under weighing growth stocks, I expect it outperforms during Bear markets and underperforms during Bull markets. Because Bull markets are much longer than Bear ones, I expect FI to earn lower returns but with lower volatility. On a risk-adjusted basis the two should earn equivalent returns. When factoring FI higher turnover resulting in higher operating costs and taxes, MCI should come out slightly ahead.

FI historical back tested records are very impressive. Contrary to my expectation, over the 1962 to 2007 period FI outperformed MCI in Bull markets (by a small margin). And it killed MCI by several percentage points in Bear markets. Overall, FI beats MCI by 2 percentage points p.a. (for large cap) while incurring the same risk (same standard deviation). FI beats the MCI for just about any segment of the equities market: large cap, small cap, value, growth, international, country specific (pg. 123), emerging markets, and REIT. The FI advantage increases from 2% to up to 6% as you move into less efficient markets such as emerging markets. Such historical results are not entirely explained simply by FI smaller cap and value tilt. Any higher return is usually associated with much higher risk (but not for FI). Also, FI beats MCI when focusing on either value or small cap stocks only. Thus, something is going on besides small cap value tilt. Arnott states FI superiority is due to the inefficient allocation of MCI that overweighs the growth stocks that suffer the worst returns in Bear markets. But, FI under weights this same growth stocks during Bull markets. What the FI gains during Bear markets, it should give back during Bull markets. But, it did not. It beat the MCI during Bull markets too. The few times the FI fell behind is during short bubbles such as the late 90s dot.com bubble.

Actual live performance of FI funds has been so far not impressive. This contradicts the author's assertion on page 176. That's because my data set extends another 7 months since the book was published. I investigated the two RAFI funds with available public records: RAFI US 1000 (PRF) covering large caps started in December 2005 and RAFI US 1500 (PRFZ) covering smaller firms. The funds history is short, but is a good test as it captures a Bear Market that started in May 2007. Thus, I would expect the RAFI funds to do better than their MC index fund counterparts. I compared PRF and PRFZ with the traditional index funds most correlated with them, respectively Vanguard Large Cap Value (VIVAX) and Vanguard Small Cap Value Index (VISVX). Since inception the RAFI funds have earned the same return (essentially zero) while incurring the same volatility vs their traditional index counterparts. Since May 2007 (beginning of Bear Market), PRF return is - 23.1% vs - 22.7% for VIVAX. (PRF did a bit worst than VIVAX). Meanwhile PRFZ return is - 20.3% vs - 21.9% for VISVX. (PRFZ did better than VISVX). In both cases, those RAFI funds way underperformed a plain total stock market index fund, especially in a Bear market. This short term track record, especially in a Bear market that should favor RAFI funds, does not give you confidence that such funds will duplicate the impressive historical back tested record.

Paul Kaplan suggests already the next step: MCI with boundaries delineated by certain multiple of fundamentals. He calls this a collared index. When a specific stock would bubble its weight within the portfolio would be reduced by the delineated fundamentals boundaries. By doing so you would preserve the advantages of MCI (low cost, diversification) while avoiding excessive concentration in over heating stocks (FI advantage). I hope Kaplan puts this concept into practice.

If you find this book interesting, I recommend the following books that also defy existing investment theory: Market Volatility, Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets, and The Misbehavior of Markets: A Fractal View of Risk, Ruin & Reward. If you want to better understand what traditional investment indexing is about, I recommend the classic A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing, Ninth Edition.

Arnott claims his fundamental index historically gives a 2% improvement in return compared to conventional cap-weighted indexes [page 263 from 1962-2007 with S&P 500 with a return of 10.3% and sigma of 14.6%.........and his RAFI U.S. Large with a 12.3% return and sigma of 14.4%]. Arnott also says the RAFI returns shown in the appendix are before expense ratios are applied [p. 262]. Some RAFI funds have expense ratios of 0.75%. If you assume a typical Vanguard conventional mutual fund ER of 0.2%, then the fundamental index advantage in U.S. large caps falls from 2% to 1.65% [S&P 500 return of 10.3% - Vanguard ER of 0.2% = 10.1%........and RAFI return of 12.3% - ER of 0.75% = 11.55%.......gives a 1.45% advantage to RAFI]

Many critics of Arnott claim his fundamental index is really just a value tilt and investors could achieve the same value tilt with typical Vanguard low 0.2% ERs versus Arnott's high 0.75% ERs (of course Arnott would not get rich from his cut of the 0.75% ER if investors just value tilted using Vanguard funds).

The only historical returns data set I have available to me runs from 1972 to 2007. I calculated the historical returns from 1972 to 2007 assuming actual Vanguard expense ratios and the RAFI index having a 0.75% ER. I got the annual RAFI U.S. Large returns before expense ratio fees from the appendix of Arnott's book. I got the Vanguard fund returns from the Excel sheet referenced on the Bogleheads web site [Bogleheads dot org].

Fund Name...................Symbol..............1972-2007 CAGR...RAFI comparison

RAFI U.S. Large.............n/a...................12.88%

Vanguard Index 500........VFINX...............10.91%.......1.97% less than RAFI

Vanguard Large Cap Value...VIVAX...........12.94%......0.06% more than RAFI

Vanguard Small Cap Value....VISVX..........14.15%......1.27% more than RAFI

Arnott only provides data in his book on his RAFI international from 1984 to 2007. Comparing RAFI international to Vanguard's international value fund gives:

Fund Name...................Symbol..............1984-2007 CAGR...RAFI comparison

RAFI International..........n/a...................14.09%

Vanguard Intern'l Value....VITRIX............13.82%....0.27% less than RAFI

From this historical returns data, it appears the pundits of Arnott's theory are correct: Ordinary investors could achieve the same results as Arnott's fundamental indexes by simply tilting their portfolios towards value index funds.

Arnott claims the largest return advantage using fundamental indexing occurs in emerging markets.....with a 10.7% advantage from 1994-2007 [page 281]. Unfortunately, Vanguard does not offer an emerging markets value fund to compare to Arnott's RAFI index.

One could speculate on how to come up with a snazzy new index in which you could collect a licensing fee for use of the index...using the following questions and answers:

Q: What determines the return of stocks?

A: Fama and French showed that returns are a function of style (value versus growth) and size (small versus large)

Q: How could we create our snazzy new index based upon F&F's work that showed that value stocks have higher returns than growth stocks?

A: We could base our snazzy new index on typical value indicators of company....like dividends, sales, cash flow, book value.

Q: These 4 typical value indicators are not very exciting and are well known...with book value dating back to the 1930's with Benjamin Graham. How could we make this sound more exciting to the average investor?

A: We call these 4 typical value indicators Main Street versus Wall Street indicators.....this will appeal to the average Joe.

Using the above Q & A's as a line of thought........we now have a snazzy new index name called Fundamental Indexing and an appealing story of using Main Street versus Wall Street indicators to rank the stocks in the fund. We can claim the idea is revolutionary and we are therefore justified in charging high expense ratios to use the new index.

The one RAFI index that might be attractive to ordinary investors is his Emerging Markets index. Historical data has shown a 10.7% advantage over conventional emerging markets index funds. Vanguard does not offer an emerging markets value fund, so this asset class is not easily accessible to investors. DFA does offer an emerging markets value fund, but you can only buy them through a DFA advisor with a typical 1% fee. The relatively high 0.85% ER for the Powershares PXH fund might be worth it to try to capture some of the 10.7% return given there are no other ways to easily invest in this asset class.


Over-all, this book is easy to read. Time will tell if Arnott's fundamental indexes outperform value based cap-weighted index funds net of expenses.

Other books which are based upon traditional cap-weighted index fund investing are shown below:

Index Mutual Funds: How to Simplify Your Financial Life and Beat the Pro's
The Richest Man in Babylon
Bogle on Mutual Funds: New Perspectives for the Intelligent Investor
The Millionaire Next Door
The Four Pillars of Investing: Lessons for Building a Winning Portfolio
A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing, Ninth Edition
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I read this book for the first time about ten years ago, and have just re-read it. Both readings were delightful and edifying. The first reading was like a slap in the face. It was a shock to have a writer attack the pre-eminence of utility. For nearly a half-century, it was pressed into my mind that usefulness was a virtue-- and not just a garden-variety virtue, but the foundation of all civic virtues. I dare say that practically everyone brought up in the West in the Twentieth Century was similarly molded, by the education establishment, by the penalty-reward system,by the politicians and (for a large part) by religious leaders. If you weren't doing something useful, if you weren't somehow contributing to the general utility of society, you were not a good citizen.
An example (trivial, perhaps)is as follows: There was a time when kids could leave the house on a summer day, run around, hang out, play games, and finally come home for dinner. Not today! Little League, Soccer league, tennis lessons. Hup! Hup! Hup!
Pieper cries out with a message that is, I claim, carrying with it more and more urgency. We have to start looking at each of our activities and asking "Is it good?", and not "Is it useful?" But even before this, we have to learn that those two questions are not identical.
One of the other reviewers objected tp Pieper's world view, asserting that in the modern age, we have more spare time for leisure than in years past. He said: "we work much less than people use (sic) to have to work and this is due to being able to produce more in less time."
This is utterly false. At the height of human civilization, (in the West, anyway), there were less than 140 working days per year. The rest were Sundays and Festival days. There was more "spare time" in the 13th Century than there is in the 21st. But, as Pieper points out, "spare time" does not equate to "leisure". One can use his spare time watching TV, and wind up with zero leisure.
So, the first time through this book, it was like a slap in the face, challenging the shibboleths under which I had labored for so long. The second time through was sweeter. The book wears very well. It will be read in the 22nd Century.

Pieper makes the argument that freedom and philosophy are closely related; bad philosophy can lead to enslavement of oneself or of societies as a whole. The Greeks (whom we take most of our higher level concepts from and who had perfected the ideals of freedom to their greatest level) viewed philosophy as closely linked to wonder, hope, and the marvelous; an open system that never doubted the presence of mystery even in one's ultimate thoughts, as opposed to some modern attempts that have created a "complete" philosophical system like Hegel's or Marx cause. One of the main points of Pieper is that our notion of work and how the word is used today is due to the influence of Marxist socialism upon our psyche and attack on our freedoms. Anything worth doing had to justify itself as work in the socialist/Marxist scheme, which included something that traditionally had been known as the antithesis of work being school or learning. We use words that justify what should more rightly be known as educational "efforts", or "studies", or "learning" as school "work". Everything has to serve a utilitarian aim as work in the modern jargon or become suspect. Pieper explains how this change, and others, in concepts of things has done something on par of putting more links in the chain that enslave us, we are our own keeper in how we think, or worse are enslaved by the system of government. Work more rightly is seen as taking care of the necessities: food, roof... The word for school comes from the Greek word for leisure, leisure is the proper use of extra time to make oneself a greater whom ever you are supposed to be.

This is what Aristotle means when he says, "I work in order that I may have leisure." Which really means I take care of my basic needs in order that I have time to examine being in relation to all things.


Acadia, sloth, laziness, a sitting in front of the tv jell-o"ing" is rightly opposite of leisure. This change in terminology is significant in how people view themselves; Marxist socialism did effect English speakers to their very linguistic core and continues to have an effect today on how we use words to justify things and those same words interact with related concepts. Without the proper usage of leisure as a concept sloth and slothful activities have been given free reign to run rampant only hindered by the term "work" which is a pitiful replacement for leisure which means time to make oneself the more beautiful person you were supposed to be includeing efforts to understand creation and interrelations of all things both inwardly and outwardly. Work is more analagous to laying brick and morter, leisure to the making of pottery on a potter's wheel (although this is simpistic). The book's messages have broad meaning. It contains only a minor insignificant attack on what is known as the "Protestant Work Ethic" only as it might be blind to Marxist inroads on linguistic attacks and its comments on leisure's effect on the contemplative life are interrelated to the good life in a broad sense, not just the contemplative life. The book is mostly about how Marxist jargon has infected Western concepts and language and distanced ourselves more from our true Greek legacy concerning the ideas of freedom and the human condition and its relation to the meaning of words and how we have become more like slaves because of it. His intent is to kill the false vain idol of work for work sake which has obfuscated a right relation to the divine. Pieper explicetly denies that this is an attack on egalitarianism or a longing for rigid class destinctions on par with archic aristocracy. It is merely a desire to revive the right place of words and exclaimation of loss in how great Western concepts have been tossed aside and consequently our humanity.

A summary of the book really doesn't do it justice.

I am no philosopher, but I have always loved Plato and have with Pieper's help learned to appreciate Aristotle again. This little book is the most influential for me besides perhaps Plato. I have been rereading it for 14 years, and wish I had read it more often. Until recently I don't think I understood the second piece, and every time I read it again there are gems of insight, undiscovered before.
Read it with friends, preferably. If you are the skeptic or cynic, Pieper has an antitode. He did at least for me.

One note: I have the original translation by Alexander Dru with introduction by T.S. Eliot. I don't know why another was made. I don't know German, but the English is very clear and flows well.

Josef Pieper's LEISURE: THE BASIS OF CULTURE is a short but poignant commentary on the difference between joy and idleness. This book is not for those who have an aversion to serious reading and thought. Nor is this book recommended for those who are addicted to the Idiot Box (TV). Those who carefully think of "Ultimate Values," serious religious convictions, etc. would benefit from this book.

Piefer distingushes between "practicle learning" and the joy of learning. In an age of "practicle" learning, cheap religion, shallow philsosphy, etc. serious reading (The Great Books)thought, and good writing are slowly being eroded in favor cheap goods and ideas. Practicle learning may enhance one's ability to improve income. One may ask as Piefer does, at what cost. In line with Piefer's views, one may refer to the biblical injunction of "Gaining the whole world and lose one's soul." Some enter the profession to earn huge incomes and often do. They have nice homes, new cars, swimming pools, etc. Yet the pressure to "keep up with the rat race" causes early death. These men are wealthy all right. They are the wealthest men in the cemetary.

Piefer prefers another sort of learning. He wants learning to be a joy. According the Plato & co., joy consisted of insight to Divine Love and Widsom. The Medieval Scholastics argued that God was Man's ultimate joy and end of life. St. Thomas Aquinas is cited in Piefer's book as one who used reason, insight, the Catholic Faith, etc. to enhance his careful study of philosophy and theology. This type of learning was to promote the Faith and to improve one's character rather than to have more economic success. Piefer is not opposed to earning a living. His complaint is the obsession of wealth at the expense of knowledge, character, honesty, character, etc. which he believes can only be enhanced by careful reading and thought.

Piefer's short book could have been written more clearly. However, he raises serious questions that should be carefully considered. For those who take ultimate values seriously, his end notes cited books and pages for further study and thought.

This work places supreme value on the contemplative silence , the deep receptive mode which comes according to Pieper in 'true leisure'.
I do not deny the importance of contemplation, of stillness, of allowing ourselves to be open and receptive to the Divine Presence.
But I think the criticism of work, and of human activity which Pieper makes undermines what is most great and good in us. After all we are creatures of creation, created in the image of God to walk in God's way. This means that at the center of our life and being is not withdrawal and contemplation but proper action in being with and helping others. In the Jewish tradition this walking in the way of God in compassion is the ideal way of being.
In more down- to- earth perhaps and pragmatic terms, the human being does not act 'machinelike' in work. There are all kinds of work and for many the only deep way of being with themselves is through their creative work. This kind of creativity and work is often part of our everyday life and mind, as philosophers of the James, Pierce, Dewey American Pragmatist school have shown.
Another important point. Piepper published this book in 1947 .The world has been transformed in many ways since then. One of them is that great mass of mankind have opportunities for learning, for creative work, for ' contemplative thought' for other kinds of mystical work that they have not had to this degree before.
In this sense I have a feeling of this book as somewhat dated. But again my main problem with it is that it does not really give credit to the full range and meaning of human creative activity.

Von Mises's whole premise of "why socialism can never work" has been successfully and easily rebuked throughout the years. The classical paradigms, of which Mises and the like defend, do no properly explain the functioning of Capitalism in the advanced industrialized western nations in the present, or perhaps ever. Liberty, what Mises and the like hold dear, is much harder to hold as an ideal when this foundation is shattered. As far as his premise, that Communism would fail because of the lack of a price system - this is completely absurd and elementary. An oversimplified idea of what I am referring to is that fully planned economics would function as a refined form of redistribution, which would be built off of the form of redistribution that lasted far longer than any form of Capitalism has (and which Capitalism itself budded from). What is in question here is relative performance, and unfortunately it is far too complex of an issue that goes much beyond simple economic distribution. Social values and political realities must be included in any initial assumptions.

What I find ironic from this forum, however, is that Mises has built a following of zealots that rivals the radical Marxists. If you are a follower and this offends you, I assume you recognize that your dashing and simplistic categorizations of socialists offends them just the same. Perhaps you should actually read Capital or many of its offspring's before you come to dangerous conclusions. I recommend David Harvey's "Limits to Capital" or "Beyond Capital: Marx's Political Economy of the Working Class" by Michael A. Lebowitz to inquirers. Note however, relative to this book both the level of writing and the command of economic theory in these two recommendations (and in Capital itself) is on a completely different level.

Ultimately, I recommend this book for people who already have a set belief in accordance with Mises's belief's and wish to reinforce it. Otherwise, if you can pass the blockade of believing only what you want to believe, I would recommend Schumpeters Capitalism, Socialism, and Democracy for the inquirer of economic systems in conflict. For those hesitant due to my obvious stance on this matter, know that Schumpeter was a professed Capitalist. His work is highly unbiased and gets to the heart of the virtues of Capitalism and Socialism, both their strengths and weaknesses, and why he as a Capitalist believes that Socialism is fully functional in many different forms and with a continuity of institutions. He also lays out quite clearly that Socialist economies need not conform to the conventional wisdom of "what Socialism is", for example a Socialist economy need not be based on equality. The problem may lay in the fact that it is quite a complicated read. If you are serious about learning both sides however, I recommend it over this.

So, in conclusion I do recommend that everyone who plans to read this also challenge their mind and conventional wisdom with reading its counterparts, some of which I recommended above, to get a clear idea of what the real issues with both are. As for many of the other reviewers on this book, I do not believe that they have an idea of anything other than what they want to have. Marx's arguments go well beyond what Mises ever attempted to touch. Having read Marx, Mises, Hayek, Friedman, Keynes, Stiglitz, ect. thoroughly, I find all these five star reviews very one sided. Normally I would rate this a 3 star book, however politics is a reality and I rate it 1 simply to counter all the fundamentalist reviewers.

Goodluck.

This is THE definitive work on the impracticality, impossibility and immorality of socialism. Von Mises, who observed socialism first hand before having to flee his home in Europe, and who lived through the age of great collectivist experiments, has written a simply devastating critique. The (supposed) reader below who wrote the review entitled "Propogating Utopian Fallacies", obviously either has not read the book, or completely misunderstood the entire thing. A more ignorant review of this book can hardly be imagined. He makes several dubious assumptions in his review and attributes them to Von Mises. He makes statements like, "Mises doesn't understand," or "Mises believes" and then proceeds to use these statements to try to refute the idea of free markets. He also fails to apply his own logical excercises to himself. For example he states that if Mises were consistent, he would have rejected all government and not just some collectivist programs. Yet the reviewer seems to be a believer in a half-way system where markets are mixed with socialism, "democracy", and government intervention. I guess he must have a monopoly on believing that governments should do some things and leave others to the anarchy of the market. Anyone familair with the rest of Mises's works and with free market and libertarian theory in general can't help but laugh at the claims he makes. This reviewer clearly does not understand property rights based, modern anarchist theory (as opposed to the Rage Against the Machine variety which he makes reference to), nor does he understand this book. The claims he makes in the last paragraph of his reveiw are so outlandish and naive that they do not even warrant a response. An important lesson can be gained here though. Without some prior (correct) understanding of concepts like markets, anarchy, liberty, the true nature of government, and without some understanding of logical processes, it is easy to fall prey to such overly-simplified arguments. I would recommend along with this book, also reading other books by authors such as Mises, Murray Rothbard, Henry Hazlitt, and F.A. Hayek.

October 25th 1817- The Bolsheviks stage a coupe in Petrograd and overthrow the Kerensky regime. For the first time ever Marxists seize control of a major nation. It will be several years before the Bolsheviks overwhelm their opponents within Russia. However, one question demands an answer. Will it work? Can socialism at least match the results of capitalism? The full answer to this question came in 1922- the year that Mises published Socialism, an Economic and Sociological Analysis. Here Mises proved that socialism must fail.

Why must socialism fail? The simple answer is because it lacks private ownership and a market for the means of production. As Mises put it "where there is no market there is no price system, and where there is no price system there can be no economic calculation". The full answer has several parts. First, economic calculation requires functioning financial markets. Second, economic calculation requires actual rivalry in markets. Third, economic calculation requires entrepreneurial alertness to profit opportunities. With these three elements in place monetary calculation of private profit reflects true economic costs. As Mises put it economic calculation "is essentially a matter for the capitalists- the capitalists who buy and sell stocks and shares, who make loans and recover them, who make deposits in the banks and draw them out of the banks again, who speculate in all kinds of commodities". Perpetually changing economic conditions mean that- "it is above all necessary that capital should be withdrawn from particular lines of production, from particular undertakings and concerns and should be applied in other lines of production, in other undertakings and concerns". Speculation in financial markets directs resources to the most urgent consumer demands because the most profitable ventures satisfy consumer demand at the least economic cost. Socialism fails because it lacks speculation that takes place only with entrepreneurial rivalry and exchange in financial markets.

The issue of economic calculation is economic, but Mises also inquired into the political and psychological reasons behind the socialist movement. He also discusses historical and cultural issues. Socialism is a full-scale treatise, comparable to Smith's Wealth of Nations. Some might think that a book from 1922 might have lost its relevance, but this is untrue. Mises explained principles that are as valid today as they were originally. In fact, Socialism is more relevant today than many recent books on economics. This is because Mises dealt with the real life problems of a dynamic economy, while much of modern economics focuses on static models that apply only to imaginary economic conditions.

Socialism is not only Mises' best book; it is one of the greatest works ever written on social theory. Mises addressed vital issues with penetrating analysis and delivered profound results. All those who are serious about political economy should read this book, but only after having read Menger's Principles of Economics, and before reading Hayek's Road to Serfdom. Those who are less ambitious should read a shorter book by Mises- Liberalism in the Classical Tradition. In any case, Socialism is a towering intellectual achievement. Were its arguments more widely understood many of the tragedies of 20th century state socialism might have been avoided. This book remains important today because it explains why we live in an age of unprecedented prosperity, and how we can achieve further progress. To put it simply Socialism is as indispensable to intellectual development as property rights are to economic development.

Does anything else need to be said?

Mises' Socialism is, perhaps, the most sociologically and economically "sound" theoretical attack on socialism to date. Happily, Dr. Mises' general position has been promulgated in economic journals since the post-war generation, and is the topic of the still relevant "calculation debate." It is not so pleasant that the insights of Mises are largely ignored by the sociology profession (probably because most sociologists continue to be prepossessed by Marxian materialism). However, sociologists who are seduced by the Marxian doctrine will be interested in this theoretical work because it asserts that social life can only be completely transformed, for the worst, under a centrally planned socioeconomic system. Further, Mises' erudition is manifest as he demolishes the work of Karl Marx and other utopians.

The central insight in this text for sociology is that "socialism" must manufacture an "artificial market." That is, a non-private property based market economy where managers will be given incentives in order to perform as private private owners who do business in a socioeconomic system analgous to "rational capitalism." This implication of an overhaul of social institutions (e.g., legal and monetary institutions) is a trenchant one. Hence, the idea of socialism is largely a sociopolitical problem, and one must move outside the perimeters of economic theory in order to address them. And Mises does just that!

The economic and sociological acumen in this work makes the price a steal. I must add, however, that more social scientists outside of economics need to read this tome because one cannot truly understand "society" without an understanding of economics.

This great work concentrates solely on the most important aspect of the Third Reich: who and what were responsible for the success of its leader. History is replete with accounts of bought and sold politicians and the inevitable tragedies that result from the merging of corrupt politicians with political power. Hitler's story is simply the most ominous, tragic, and pure evil of them all - the Mother of corrupt politician sagas, if you will, and is accurately recounted here in well-documented detail. The book thoroughly describes and documents the various moneyed interests, both individual, such as Henry Ford (the subject of entire chapter, including a stunning photo of Henry Ford receiving the Grand Cross of the German Eagle from the Nazis), and organizations and groups, such as virtually the entire German coal and steel industry, who bought Hitler and raised the Nazi Party from failure and obscurity into the nemesis it became. Hitler returned the favor by fronting for their interests, such as by suppressing (and ultimately removing) those within the Nazi Party who believed in such socialist agendas as nationalizing industry, and by advocating for rule by business hegemons, just as their modern-day counterparts, the neoconservatives, do today: "The capitalists have worked their way to the top through their capacity, and on the basis of this selection, which again only proves their higher race, they have a right to lead." - The book quoting Hitler from Nazi leader Otto Strasser's book "Hitler and I" (1940).
The book is a chilling warning of what happens when democracy is subverted by oligarchs.

Pool is able to give us a compelling report about who really financed the Nazi-party and why Hitler had friends in high places, and that despite the fact that many first hand historical documents disappeared.
First, there was the fear for communism (Fritz Thyssen, Henri Deterding of Royal Dutch, Norman Montagu of the Bank of England ...). These people supported Hitler's party to win the working class and the ruined lower middle class away from communism.
Secondly, his anti-semitism (Henry Ford). Third, his racist/nationalist stance (the secret Thule society: a group of lawyers, judges, professors, policemen, aristocrats, scientists and businessmen). Fourth, friendly régimes (Mussolini).
And last but not least, the donations of his party members and his daily newspaper (a milk cow).
Pool gives us a penetrating picture of the political/economical situation in Germany after the First World War: the unbearable Versailles Treaty, the poverty, the unemployment, the hopeless division of the political parties and the plotting of von Papen and his backers, who supported Hitler when his party was losing support, for fear that his followers would jump over to the communists. Von Papen thought that after the elections, he would easily get rid of Hitler, a terrible mistake.
Pool convinced me of the ease with which money can subvert the democratic process.
One of the more controversial statements in this book is the reason of the abdication of King Edward VIII of England: not because of Mrs. Simpson, but because of his pro-Nazi attitude. This statement needed more underpinning.