market-economics Books

I enjoyed the book, empathizing with the emotional struggles of being the low man on the totem pole lacking the clout to make positive changes while somehow your boss is an idiot making stupid managerial decisions based on a narrow self-interested view. At the same time, the final "dialogue" just bled liberal tree-hugger. At the same time, for an interesting read on the idea of America's consumer culture, try reading "The Paradox of Choice" which I thought was just great.

Anywho, I did enjoy the part of the book talking about how one can lose oneself if there's continual go-go-go without time for reflection, which seems to typidfy the Wall Street existence- and more and more the typical American existence. I think my dad said it best: America teaches you to thrive, but has nothing to say about balance.

Although the author's knowledge of Finance is fairly limited, the book's focus on the political environment inside a Wall Street firm provides valuable insight to the person interested into entering this field.

Many people pursue a career in Wall St. simply to make money; and this was the intent of the author. Furthermore, the author's background is quite similar to those who are entering the field some years after having finished college. Moving from the slow paced lifestyle to the hectic routine of a Wall st. analyst, the author is able to convey the difficult transition into Sales and Trading.

My only wish is that the author focused less on New York lifestyle and more on how a Wall St. firm works. It would have been nice to delve into the investment banking side and equity side. The author is limited by his lack of experience on the street and most of the writing is based on only a short-term experience. For those interested in pursuing a career in Bonds this might be a good read. Also, it is fairly long considering the author doesn't detail too much information. So you've got to look for the subtle things to make some kind of perception.

This is definitely not a read for anyone experienced in Finance. Solely for those interested in getting into the field.

Every now and then you come across a really inspiring rags-to-riches tale of Wall Street, a story of a streetwise poor kid full of ambition, raw brains, and moxie, who risks it all, works like a demon, and makes big money in the financial jungle.

This is not one of them.

Paul Stiles, Harvard grad, smart dude, worked at the National Security Agency for five years: by about 1994, he'd decided "good enough for government work" wasn't good enough for him. North of his little cottage near Annapolis, the trenches and bunkers of Manhattan, a great battle---fought with derivatives, and tranches of collateralized debt, and high-yield instruments of death and destruction---was being fought: a war with, potentially, far greater ramfications for the United States than all the post-Cold War subterfuge for pennies wielded in Washington DC.

So he did what all of us Wall Street hopefuls have done, once upon a time: he road the shuttle north, an interviewed like a banshee.

The first thing you'll pick up in "Riding the Bull" is the verve of the writing: Stiles has a gift for words, for framing a scene, for setting up Manhattan in the mid-nineties, in the heat of the Bull Market, and Stiles---after the agony of inquisitorial, mercurial, stress-driven interviews masterminded by the newest lords of the manor, the calculus-fuelled quants---secured a plum role in emerging markets debt at Merrill Lynch, whose sigil and symbol---the rampant bull---was emblematic of that intoxicating, wild-eyed age.

Stiles, then, is an alien---or an ape, your choice---in this brave new world of bond trading, the Mexican sovereign crisis, the convergence of High Finance, High Octane, and Super-Duper international skullduggery.

Oh, with a little aside on the craziness of trying to settle down in Brooklyn, New York, 20th century, on a pittance of 100 grand a year. Sheesh.

Now: as I said, Stiles has a gimlet eye: of his work in the trenches at Merrill, as he was handed a nasty, thankless assignment as, effectively, a minister without portfolio, a trader without a country, a hapless Gringo amid the so-called Latin Mafia that ran the South America debt operations---how he tried, failed, tried again, and got sacked---trying to carve out his own little kingdom in the jungle of the Bull.

It's fun reading. It's scandalous, witty, engaging, capable of beoing devoured on a red-eye flight from Boston to LA, and consummately engaging.

Moralistic? Possibly. Stiles nails the pyschology of Manhattan, the city that grows up, not out. An island with skeletal coastal development? Go figure, in a place where the eyes look to the sky, not to the sea.

Some might complain that a one-year tour of duty on Wall Street hardly qualifies for the jeremiad that is "Riding the Bull", but I disagree: in the wake of Enron, Tyco, Worldcom, Adelphia, and countless other Wall Street turmoils, "Riding the Bull" is a merciless little piece of pungent journalism, a fly-on-the-wall in America's boardrooms where the caviar is probably laced with salmonella and the Crystal is jacked up with arsenic.

Here be Dragons.

JSG

I wrote RIDING THE BULL to provide a first-hand account of the corrosive effect of extreme capitalism on human society. The book is a true story of a year I spent working at Merrill Lynch in New York City. It has now been seven years since I was hired by Merrill Lynch, and five since the book was published. In that time Merrill Lynch has paid half a billion dollars in fines both for its role in the Orange County bankruptcy and in the fraudulent promotion of dot-com stocks; the phony technology bubble has burst, just as the phony emerging markets bubble burst; and an unprecedented series of corporate scandals has rocked the American economy, causing a historic decline in the stock market that has erased an estimated $45 billion from the GDP. The magnitude of the problem has even led that champion of the Big Apple, the New York Times, to finally see the light: "If you have to choose the primary breeding ground for the various business misdeeds now consuming national attention, New York, I'm afraid, is the place...if infectious greed is the virus, New York is the center of the outbreak." (City of Schemes, NYT Magazine, 10/6/02).
One is tempted at this point to issue a strong I-told-you-so. I won't.

Stiles made it a year in the derivatives business. What I found surprising was that he made into Merrill Lynch at all. Here was a guy who hasn't even taken his series 7 and he's wondering why he's completely lost.

The lack of communication apparent in Merrill Lynch is unfortunate, but no different than other large finance companies (I can attest to that.) I found it hard to understand why the bureaucracy drove Stiles nuts considering his previous job was with the government. Rather than explain it as it was, I couldn't help but think Stiles was looking for someone to point the finger at. It seemed to me the truth behind the corporate culture lies more along the lines of "we don't care what you do as long as it makes money." The "Latin Mafia" and the rest knew this and were playing the game using the cards they were dealt.

What I did enjoy were his escapades (or lack thereof) outside of work. Sorry New-Yorkers, even though I was born there, I cannot understand why anyone would choose to live there and this book reinforces the opinion. Stiles did a great job of conveying life in the Big Apple, from the sense of tension just getting to and from work, the rationalizations that come out when crime hits close to home, to a valid summary of why a dual income family making over $100K a year still has nothing to show for it. (Any Brooklynite reading this is probably thinking, "if you don't like it... leave" which is exactly the point.)

Whereas "Liar's Poker" is probably overly congratulatory, "Riding the Bull" is overly accusatory. I'm not sure if the author needed to sell his soul to continue working at Mother Merrill, but he should've realized he might have to make that decision before he took the job.

This book is for those who have already started investing in stocks. If you have read this book and have found it not very deep, do not be upset. Keep investing in stocks for a few months more, reading in the meanwhile "The Only Three Questions That Count" by Kenneth L. Fisher, "Buffettology" by Mary Buffett, and the other books. Then get back to "Value Investing Masters", analyzing your past performance, and what did you learn from the other books. I guarantee that you will find it as a completely new book.

In this book, you will find the similarities and the differences between the 18 top mutual fund managers. Despite the key differences in the strategies of some managers, all of them managed to outperform the market in the long run. For example, some of the managers only buy stocks with low PE, while others buy with very high PE or even companies without earnings. Another difference is that some of the mutual fund managers always talk with a company management before buying the stock, the other never meet management and consider this waste of time: they claim that you can get everything by reading consecutive annual reports and comparing what did the management promise a year ago with what they promise now.

Now let us go to what do all the managers have in common. They all stick with the market; think like an owner of the business; pay attention to price; buy what's out of favor; build the portfolio from bottom to top (not from top to bottom); know when to sell; have patience; are wary of Wall Street recommendations; know the company and who runs it; and minimize risk.

I can recommend you "The Only Three Questions That Count" by Kenneth L. Fisher and "Buffettology" by Mary Buffett in addition to this book.

If you're looking for deep investing insights from the masters, this is the wrong book. The author seems to have missed a golden opportunity to ask good fundamental questions and then pursue them more deeply.

If you're looking for short biographies of famous investors, coupled with a high level discussion of investing philosophy this is the right book.

As someone who has had poor results with momentum trading for several years, I have been searching for a new approach that will work better. I read The Intellegent Investor and have since been studying value investing in several books. I have to say that Kazanjiun's book was a very helpful orientation from some of the "Masters" that has deepened my desire to understand value investing better. I think it was interesting that I got more out of the Dreman interview in this book than I did out of Dreman's own too-long book. I recommend this "orientation" to anyone who wants to examine the broad strokes of value investing in one place.

I'm not sure I found one worthwhile idea in this book.

Christopher Brown
1. First look for stocks with a Price/Earning or Price/Book less than 80% of all stocks.
2. These stocks must outperform the indexes
3. Make sure the company has good management and solid plans and strategies for growth
4. Focus on stocks with above market returns (7%). The stocks market returns must exceed the cost of money and inflation.
5. Invest and hold
6. Act like a business owner of the stock and now a momentum trader
7. The top money managers with 20 year records are value guys. Take for example, American Express, this stock compound 22%, for 10 years.

David Dreman
1. Buy low Price/Book, Low Price/Earnings, low Price/Cash flow stocks.
2. Contrarian investing has out performed markets spanning 50 years and the S&P for the last 10 years.
3. Buy good blue-chip stocks, which, on the whole, are growth stocks with 10-15 % growth.
4. Seek a solid balance sheet and above average dividends
5. Volatility is helpful. Contrarians are looking for top-performing stocks that have been knocked down. They love bear markets. Bear markets represent bargins, too buy cheap, wait until the market recognizes the value, and sell when price changes and other factors combine to suggest a sell. Bear markets allow the contrarian to purchase 10,20, 30 percent growers at a cheap price.

William Fries
1. Emerging franchises are younger companies and represent good potential for growth and emergence into saturated markets.
2. Establish a target price based on 12 to 18 month interval. Note that an analyst has 1/14 billion chance predicting price within 5%.
3. As a stock reaches its 12 to 18 month target price; we look to see what has changed.
4. One of the biggest mistakes is to sell emerging franchises to early.
5. The sale of really great companies can lead to lost opportunities.

James Gilligan
1. I'm particularly interested in how the company is getting to profitability
a. By examining trends in sales and administrative expenses
b. We want to see how the ratios stack up against the competition
2. To determine normalized earnings, we predict what sales should be, and then put a margin that the company has been able to generate over time on those sales.
a. Historically, 8 times Peak earnings to get Price
3. If the current earning estimate is higher than normalized earnings, we are not interested.
a. The best companies grow between 8-15%
b. The return on capital that exceeds the cost of capital
c. Sell a stock when the story turns out wrong or when you find something better.

James Gipson
1. Buy companies that can be easily understood.
2. When buying a stock, look at what might go wrong. Weight out the risks.
3. Sell when the price goes up or the value goes down.
4. Hold as long as the stock has value, the company is growing, and operations are good
5. Measure the value in ratio to the cash flow
6. Buy a stock that over the next 5 years will outperform the market
7. The market between 2000-2010 prediction is that it will experience a 10% return.
8. Growth investors do well, they do well because the companies they bought grew faster and longer than the market believed. The value investor bought when the company was undervalued; undervaluation was caused when the market becoming pessimestic about a negative event, as a result the market overreacted and panic sold; the value buyers realizing the overreaction and the value of these companies bought cheap; the market realized their mistake and began to buying up the valueable stock, raising the price, and the value buyers recognized overvaluation and sold for a 20-30% profit.
9. The problem for a value investor is finding stocks that look statistically expensive, but are cheap.
10. Management activity is important; the business value and management ability to execute a profit plan. Management must play the confidence game and create the perception they can provide value.

Ronald Muttlenkamp
1. P/E of 17 is the mean (Boggle would agree)
2. 4.5 is the normal interest rate (this was a revelation)
3. A value oriented P/E should be no more than 2.5 multipled by the growth rate
4. Find a value stock means going to the value line
a. It must have a good return on equity (14%+)
b. Fairly priced
c. P/E value must below the ROE
d. If the company is good and no management changes and the price suddenly drops then buy more and leverage profits on the return to fair price.

Good and grounded analisys, well written, interesting perspective about the financial and real estate crises. Good sugestions for the outcomes and structural changes in the financial system and economy.

The bubble cannot be explained by interest rates (takes Alan Greenspan of the hook), population growth and construction costs. The professor thinks that psychological/sociological phenomenons such as social contagion, information cascades, zeitgeist and common opinion are the cause. And the public believes in the real estate myth that the price of real estate must inevitably trend trend strongly upward through time. Professor Shiller make a case that the public's belief in real estate is not justified because inflation, income growth and "amounts" of housing consumed are not properly considered by the public. On page 70 he writes: "If one looks squarely at the issue, it is clear that the rise in value of existing urban areas has shown no tendency at all to make investors rich." This statement severely discounts thousands and thousands of get rich real estate books. There is a disconnect. It could be that the author is not considering income property (that is rents)? Something is wrong. Too many real fortunes large and small have been amassed through real estate. There are too many exceptions to the "tendency" detected by Dr. Shiller. Squarely looking at the issue, I rechecked the Internal Rates of Return (IRR) on my eight investment condominiums depicted in my book: How to Invest in Condominiums, none of them go along with the professor's tendency, all to this day continue to be highly profitable. How many exceptions must there be to a tendency to disprove it?

The various changes to the financial system proposed by the author to achieve "Financial Democracy" on the surface sounds good, but are quite technical and difficult for a non-expert to fully comprehend. The changes are significant. How would they really work when implemented? What unanticipated side-effect would there be?
Figures 2.1 US Real Home Prices and 2.2 Real Home Prices in a Sample of Cities are very revealing and instructive.

Everyone nowadays seems to agree on the root cause of the current economic crisis; it is the bursting of the real estate bubble. But what caused this bubble? What hazard does its bursting pose to the solvency of financial institutions? What steps can be taken to heal the economy and prevent similar calamities in the future?

In The Subprime Solution, Robert J. Shiller proposes answers to these questions. The answers that he offers represent a furthering of earlier research that he has done on the subject of bubbles that have occurred in other markets besides real estate. In the first edition of his earlier work, Irrational Exuberance (2000), Shiller correctly predicted the bursting of the bubble in technology stocks. According to Shiller, both the technology bubble and the housing bubble are due to the same basic cause, namely widespread and misplaced confidence among the investing public. As such, they can be characterized as speculative bubbles, the "speculative" modifier being the key point that distinguishes Shiller's analysis from other competing theories.

Shiller explains that speculative bubbles are psychological in origin. When a home buying frenzy ensues in a given locale, home prices rise due to increased demand. The price increases support the widespread belief that declines in real estate value will not occur, in turn feeding the buying frenzy. In effect, the phenomenon is a vicious circle, which feeds upon itself. Eventually, the prices of homes become inflated far beyond what is explicable in terms of building costs, land availability, and other economic fundamentals. It is under such conditions that the market is ripe for a downturn.

The misplaced confidence in the real estate market not only affected individuals, but it affected lending institutions as well, and here lies the key to the current crisis. For years, there has been a culture among lenders of rubber-stamping home loan applications, and a failure take the obvious steps of verifying the borrower's income and credit history. These practices resulted from a misplaced confidence in the quality of the home as an instrument of collateral, and accordingly the expectation that cases of default would not cause a significant loss to the lender. Lenders have relied on economic models that failed to take into account the devastating effects of a sharp downturn in home prices, on the assumption that such downturns would never occur.

What can be done to heal our economy, and to prevent similar calamities in the future? The first and obvious answer is better education for both individuals and institutions as to investment risks. Another, more controversial answer is bailouts, and Shiller supports their use. Shiller is quick to admit that bailouts are unfair, in that they penalize those who behave responsibly and forgive the misdeeds of the reckless. Interest rate cuts designed to ward off foreclosure for those with variable rate mortgages are one type of bailout. These represent a hidden transfer of wealth from the conservative money-market investor to the over-leveraged home buyer, and as such are unfair. But, according to Shiller, the rate cut is a necessary evil to prevent a devastating loss of confidence in our financial institutions.

We have all been led to believe that a house is a solid investment, and prominent writers on personal finance for the lay public have historically stressed this point. But for most individuals and families, home buying violates all the standard principles of investment science; it is a single, high-value undiversified asset with no available means to hedge changes in price. In light of these considerations, is there anything that can be done to make the risks for home buyers more reasonable? According to Shiller, there is, and this takes us to the most exciting and innovative part of of his work. In the chapter entitled the Promise of Financial Democracy, Shiller proposes the creation of new financial instruments that could lend sanity to the real estate markets. A detailed understanding of such instruments demands more knowledge of the field of finance than is at the disposal of most readers, so some explanation is in order.

If you ask a homeowner in New York what he thinks about the stability of his real estate investment, he is likely to tell you that it is solid. He lives in the place, and to own it he has had no choice but to leverage himself and accept great risk. It is difficult for a person in such a situation to make a disinterested assessment of risk. He is affected by the psychology of his neighbors, who are similarly leveraged. Ask the New Yorker if he would own a house in Los Angeles, where he has no personal stake, and he is likely to say, "No way. Too many earthquakes and fires." It would be desirable for the New Yorker to be able to register his unfavorable opinions about Los Angeles and take short positions in the LA housing market. Such would exert downward pressure on house prices in Los Angeles, and subject their prices to a more democratic bidding process. The introduction and widespread trading of new types of real estate derivatives, which would allow investors to take both long and short positions, can be expected to do a positive social good; they would lead to better price discovery in the real estate markets, and could ward off the formation of speculative bubbles.

In practice, most homeowners would not want to take any kind of speculative position, either long or short, on the housing market in other cities. However, Shiller argues that such speculative instruments could be repackaged as retail financial products that would allow the homeowner to hedge risks due to unpredictable fluctuations in price. Under such circumstances, the homeowner's confidence in his investment would be rational and not subject to the psychological contagion of "new era" hype. Towards the end of the book, Shiller argues that being able to secure the price of one's home against spastic variations could prevent the panic selling and "white flight" that has occurred in urban areas.

All these innovative, forward-looking ideas make The Subprime Solution an exciting work. It should be on the reading list of anyone who wishes to get a better understanding of the current crisis.

Robert Shiller, Professor of Economics at Yale University, has written an intriguing book about the financial crisis.

He writes of the US housing slump in the 1980s, "All this could have been prevented if people had simply adopted inflation-linked mortgages, but the public seemed unable to grasp the concept." He seems to be blaming the public, for having imperfect information. But if markets only work when everyone has perfect information, then markets don't work.

Excessive lending and speculation in housing created the house price boom of the early 2000s. Shiller blames `the contagion of market psychology', a contagion without borders because of capitalism's global nature. But the cause was not `market psychology', but the globalised financial system which provided the opportunities and incentives for speculators. The system created the psychology, not vice versa.

Shiller proposes to revamp the financial system: improve the provision of financial information, extend the scope of financial markets to cover a wider array of economic risks, and create retail financial instruments to provide greater security to consumers. He defends the top executives in the financial sector and calls for extending and developing financial markets. But even more opportunities and incentives to speculate would lead to an even bigger crisis next time.

Yet he does make some sensible proposals, like improving insurance against unemployment and illness. He says that to restore confidence, capitalism must bail out the low-income victims of sub prime mortgage deals and support homeowners, to prevent mass evictions. He opposes bailouts to maintain high values in the housing market, stock market, land market or any other speculative market.

He points out that unfair land use restrictions benefit landowners by keeping land prices high, preventing new construction. We need cheaper land, so that we can build more homes.

But of course if capitalism could do all these good things, it wouldn't be capitalism.

For those reading this book hoping to find the root cause of this crisis I suspect they came away lacking. Reading this book was like eating cotton candy. A whole lot of chewing but not much substance. High level fluff without detail. Let me help you out. This phase of the mortgage crisis is due to subprime mortgages. 75% of subprime borrowers took out adjustable rate mortgages. The most popular of which was the 2/28 ARM. The first two years of this mortgage offered a low teaser rate. When the teaser rate expired the monthly mortgages payment went up on average 30%. Now here is the unbelievable part. All of these subprime lenders qualified people for the loan solely based on their ability to make the initial low teaser rate payment without worrying about whether they could make the payment once the mortgage reset. Which is why we have this massive default rate. Now the lenders knew this was going to happen. They were counting on refinancing the loan every two years when the mortgage reset. To help grab the borrowers equity they added a 3% prepayment penalty. They were going to milk them for fees every 2 years like a milk cow. This works as long as the house prices are going up. It doesn't work when house prices go down because no one is going to give you a loan for more than the house is worth. Now did you get any of this detail out of the book?

This is one of the two books about money management that I would recommend to anyone who is trading, the other one is Trade Your Way To Financial Freedom by Van Tharp.


This book actually covers all issues related to position sizing and teaches a method especially beneficial to traders starting with a smaller account. I understand the numbers in the book is not properly illustrated, and the examples are somewhat intentionally designed, by the logic behind the method is very robust. Meanwhiles the author does not exclude the possibility of other position sizing strategies, he does suggest to switch from fixed ratio to fixed fractional method once you have build up your account to some point(on page 220).IMO, it is actually the best money management plan that will cover the whole life of a trading account.

I strongly recommend this book, as the best book on position sizing, and one of the best( together with Tharp's book) on money management.

If you really want to optimize your Forex trading returns, you need to understand the principles of money management. This book by Ryan Jones is probably one of the best books available on the topic of Money Management. If there is such a thing as a Holy Grail then Money Management is it. With proper money management you will be able to stay in the game for the long term. One of the biggest mistakes novice traders make is that they don't know how to manage their trading risks, that is why the failure rate for beginning trades is greater that 95%. Most novice traders blow out their account within the first year.

This book will be a real eye opener; it will provide some great insight into why proper money management is critical to your success. The following is a sample paragraph from the book:

"you don't need $1 million to achieve $1 million. You only need to build profits that total $100,000 based on trading a single contract. What this means is that a person who trades a single contract and makes $100,000 at the end of 5 years, instead could make $1 million by implementing proper money management"

Ryan does an excellent job at detailing the various Money Management methods along with their short comings. Parts of the book are complex; you may have to read them a couple of time to fully understand the concepts. Ryan does include a lot of tables and calculation in this book but they are easy to follow and comprehend. You don't need more that a high school math background to understand the calculations. This is another one of those "Must Have" books that you need in your trading library. We here at EffectiveFX highly recommend this book. It can make the difference between financial success and failure. Any trader serious about trading for a living must utilize proper risk management principles to be in the game for the long term.


Go to our site to see a list of highly recommended books for successful forex trading.

It's always been surprising to me that this book sells so well and the classics are not as popular. The sensational sub-title "Playing by the Numbers to Make MILLIONS" must convince readers that Jones can give them the secret to becoming a millionaire.

Thing is he doesn't give you any secrets to success, instead he sends you in the wrong direction by stating that "risk of ruin" isn't important and that the "Jones Fixed Fractional" approach is better than the standard "optimal F". Neither claims are true, and you'd be better off learning about "risk of ruin" from Balsara and about "optimal F" from Vince, the true grand daddy's of money management. If Vince and Balsara are too complicated, a newer author, McDowell, simplifies both of these concepts so that you can get on the right track.

A Trader's Money Management System: How to Ensure Profit and Avoid the Risk of Ruin (Wiley Trading)

The Handbook of Portfolio Mathematics: Formulas for Optimal Allocation & Leverage (Wiley Trading)

Money Management Strategies for Futures Traders (Wiley Finance)

Check out the review of Ryan Jones book "Apples and Oranges" dated July 7, 2001, that reviewer has a real understanding of money management and what works and explains the flaws of Jones' book with great clarity. At the end of the day, you'd be better off getting a Vince, Balsara or McDowell book if you want to improve your trading results.

PS: If you look at the back flap of Jones's book jacket in "The Trading Game - Playing by the Numbers to Make MILLIONS" you will see him say that he says his book gives you "...a complete, workable method for making $1 million in five years or less..." then on page 232 in his "A Final Thought" he says "...Open a $10,000 account and day-trade the S&P when you feel lucky if you want. But when that money is gone (and it most likely will be) do not alter the plan. Do not pollute the plan...".

If he is teaching effective money management - then why on earth does he believe that his students will lose their entire trading capital? Very odd indeed -- he lures readers in to buy the book with a "get rich quick" title and book jacket text -- then tells them that they'll "most likely" lose all of their money -- but remember -- even after they lose all their money he doesn't want them to alter the plan or pollute the plan.

That just doesn't make any sense.

I liked the ideas in the book about position sizing, very helpful material. But the author will throw all kinds of numbers at you without really explaining how or where he got those numbers. The material is probably obvious to the author, so he assumes that it will obvious to the reader, as well. If you buy this book be ready to read and reread sections.

Here is an example: "After having acquired $100,000 in profits using the $5,000 as the delta for the fixed ratio method, we would be trading 20 contracts. The minimum level of profits to trade 20 contracts is $1,000,000. Therefore, what took 4 years to generate $225,000 estimated profits, generated $750,000 more in profits during the next four years"

Did he not say in the first sentence that 20 contracts would be traded for $100,000 in profits? In the second sentence it is $1,000,000? He does not explain how he got $225,000 or $750,000. I am sure Mr. Jones knows how he got these numbers but readers are left to figure it out for thmeselves.

The parts of the book that I did understand, I have begun to apply, such as position sizing. But it is a long and frustrating read.

Explains the principles of money management; covers in detail the various aproaches (pyramiding, martingale, fixed fractional, optimal f et al) and shows why they are not optimal for traders. Finally offers his own money management approach called Fixed ratio. Loosely derives from fixed fractional, but reduces drawdowns and risk, while still allowing for improved growth.

The book is complex and somewhat dry, there are LOTS of tables of figures and you will need to re-read many sections. The method of money management seems sound enough although I haven't incorporated it into my approach yet.

Defintely worth reading as money management has been shown repetedly to be key to success in trading (alongside psychology, emotions and good exit strategies - which are not covered in this book).

"Financing the Venture" is difficult to read and comprehend. The presentation and illustrations are not always clear. It is hastily bundled together in an attempt to impress the reader about a few innovative thoughts (developed by others) and rearranged by an amateur writer. The book has two themes: how to prepare a business plan to an investor, and learning how and where to obtain financing.

First, if anyone dares to write his or her business plan HIS way, beware, you will be rebuffed quickly! Second, if you carefully review the writer's experience at raising capital, he seems to contradict his own methods for raising capital. Case in point: Mark Long sponsors lectures about how to make "quantum leaps" for entrepreneurs, yet he struggles, in one of his own projects, to raise just $350,000 of seed capital from forty-five investors!

Do not use this as a primary guide. For the one star rating, there are some ideas that may help focus your thoughts. Use this book as an auxilliary tool to complement your ideas and visions for preparing final plans and strategies.

As an attorney in the world of venture capital financing, I picked this book up in hopes that it would lend insight into the world my clients live in and work in. I was extremely disappointed to find page after pages of trademarked and CAPITALIZED terms which were unhelpful and distracting. The layout of the book, including the graphics and charts, is extremely poor and lends nothing to the text. Try something else. Anything else.

This book not contain much useful information. What's more, it's structured very poorly and what little value the book does contain is hard to extract. Read Baird's Engineering Your Start-Up and Nesheim's High Tech Startup instead.

This could have been a great guide --- except for the proliferation of "trade-marked" catch words. Every TM that I encountered was another irritant and reading interruption. I was also put off by some of the outdated data. Nonetheless, there are many luseful checklists and resource lists (which I hope will prove current). This inexpensive book is worth the price for those alone. I also bought "Angel Investing" by Mark Van Osnabrugge, which I found more credible and pleasant to read.

... I have started businesses, I have secured financing and I have read this book.

This book is extremely difficult to read as it is full of cumbersome sentences, unexplained catch phrases and unnecessary acronyms.

I don't dispute that the author presents some good ideas but they are hardly innovative - old standards gilded with unending lists and inane, obscure illustrations. This book is far from revolutionary as some of the "reviews" here suggest.

Don't bother!!

I was really disappointed in this book. As I was reading it I kept asking myself when is she going to explain how to calculate the indicators. And there you have it. She doesn't. You have to buy them. It's pretty clever really. Write up some proprietary software/indicators, and then write a book showing how well they work with cherry-picked examples. The book provides the advertising for the real product.

Overall there are some interesting ideas in this book but unless you purchase the indicators you're not going to be able to use them.

I sensed that she has tremendous amount of trading experience. Simply put, she knows what she is talking about. Along with, not in particular order, Constance Brown, Linda Bradford Raschke, and Robin Mesch, Cynthia Kase once again proves that lady traders are as good as,if not better than, gentlemen traders. Job well done, Ms. Kase.

Keith J. Chung

Book was quite expensive. $55 for 143 pages. I found some of the graph illustrations difficult to follow since the printing was so bad. Requires many readings to get the full jist of what the author is saying. Overall, I found the book and concepts interesting.

The book might contain many good ideas. But there is no way to verify these ideas with back testing without the formulas of the Kase specific indicators. Kase lists the calculation of the traditional stochastic indicator, which is implemented in almost every charting package. But she doesn't say how the kase peak oscillator is calculated!!
2 stars for the good ideas including the Elliott forcasting rules

Below is a review of this book by a "Ron Davis" who styles himself as "a proud member of the Market Technicians Association." Bzzzt! I am the only current or past Ron Davis in the Market Technicians Association. Interestingly enough, I also have a successful real estate practice. Quite the coincidence -- makes one wonder.

The "RD" below finds the book to be without substance. Perhaps what one sees depends, in part, on what one brings to the book. I quite agree with the reviewers who say this is not a book for beginners. I had a couple of "aha" moments reading the book, one about Kase DevStops (I'd better have yet another look at those) and one about one of my own proprietary indicators. A few minutes of programming and, by golly, I was able to derive a bit more useful information from my own gadget.

What's this book good for? (1)A trading methodology or (2)ideas about ideas. I'll not broach (1) -- the book does that. I have already mentioned two things that jumped out at me. I also want to take a look at her variation on Elliot Wave counting and targeting. And, on a second read, I may find other things I'd like to fiddle with a bit.

Criticisms: My criticisms fall into two categories (1)purist mathematics nit-picking (I am a mathematician by training) and (2) my laziness/the book's lack of complete exposition. The mathematical nitpicking is not relevant except to a mathematician: for instance, the number of random distributions which are not Gaussian/Normal are at least an order of infinity larger than the number of Gaussian distributions. Should the person who is reading to learn of trading care? I wouldn't think so. My Laziness/the book's incomplete exposition: What? I really have to turn on my brain and think through how to implement the ideas? No cookbook approach here? Of course, if one were being rational, not lazy, one could point out the advantage to having to think: one might actually learn what it is one is doing. And, one might even think up a new idea, heaven forfend.

In conclusion, not only do I resent the attempted identity theft by the person below, but I especially resent being represented as such an empty-headed fool that I cannot see the considerable value in this book.

The REAL Ron Davis, CMT, MAI, MA

Since you can buy this book pretty cheaply now, it is probably worth reading. Every book has a couple of ideas in it that are interesting to think about and Mr. Acampora has enough experience in the market to offer some different perspectives. But, you are probably not going to learn much that will directly impact your ability to profit in the market.

The book was written at the end of the dot com boom days and it forecasts bull market for another 10 years. Of course, we all know the market is still below 11000, but this would be to easier to blame the author for that. What is more interested is why he made that prediction. One of the key reasons is that according to him peace is always bullish and end of a war pushes the market up. It's not straightforward how to apply that to the current situation. The author was sure back in 2000 that the US is secure and no war is coming. Ok, he obviously missed the war on terror. Also, it's not clear what would mark the end of this war. By the way, according to the author the Korean war and some other onces were not big obstacles for the bull markets, but the others were. Would be interesting to know how the war on terror is supposed to be treated? So even if his conclusions sound convincing, it's really hard to apply them and even the author was wrong in many of his predictions based on his own ideas.

So this is a typical techinical analyst book. Everything seems to reasonable looking back in history, but the crystal ball is hazy and can be read either way.

Overall, this is a nice overview of the US market history for the last 150 years, but I wouldn't take the boldest predictions about the mega bull market too seriously.

Peace is bullish. The 1980s were characterized by double digit inflation. Inflation is a stock price killer. Inflation cost individuals thousands of jobs. The prime rate reached 21.5%, at the same time US bonds became a terrific investment, the dollar climbed, consumer spending increased, LBO increased as opportunist bought undervalued companies with small cash and heavy financing. By 1987 the DOW hit 2,700, a 300% increase in five years then Iran bombed an Iraqi oil tanker and the DOW fell 508 points, 23%, in one day. A stealth bear market had emerged with 70% of the stock issues losing 20% of their value. However, the 50 day moving average had moved above the 200 day moving average, a buy signal; interest rates were coming down; by 1995, the DOW was experiencing a 900 point breakaway lead by IBM; technology was ushered in combating inefficient practices; Bull signals were strong: 96-DOW 5,778, 97-DOW 8020, 98-DOW 7539 (Transportation remained flat), 00-DOW 11,722 (Dot com); Ten bull rallies were very profitable yielding 24.5% gains on the average of 4 ½ months with the worst sell off in 98 with a lose of -20.8%. GE looked good. GE had adapted and turned their focus too new technologies maintain a three prong domain focus of appliances, heavy industry, and finance. Jack Welch cut costs eliminating one hundred GE businesses cutting out coal mining, oil refining, and housewares; cut 40 of the workforce; changed the domain focus to advanced medical devices, improved productivity, and new technologies that benefited the consumer and increased profit margins. 1995, a Bank Bailout by the IMF saved the economy. Mexico had a huge trade deficit and as the deficit balloon so did the borrowing. The over extension of credit devalued the Mexican currency; as the Mexican currency devalued money moved out of the country; the Mexican bond market nearly collapsed and credit vaporized and loan defaults escalated; the IMF infused $35 billion in loans to save the failing Mexican economy.

A bull market needs peace. The results of a peace dividend are decreased spending. However, today, the war on terrorism has increased government spending and enlarged the national debt. The peace dividend reduces government debt. Today, war has moved the national surplus into a national debt. Military spending is predict to increase funding paychecks for 450,000 military personnel, 136 military installations in NATO countries, investments into new weapon technology, and rebuilding of decimated countries, after military conflicts. The peace dividend expands global trade and allows manifests itself in efficient free trade markets that operate on principles of supply and demand. Today, the WTO espouses free trade but interferes in the operations of trade through regulation that artificially create demand. The WTO weakness is its belief that it is smarter than the free market. The peace dividend lead too the fall of communism as military industrial competition, dollar hegemony, and economic pressures forced communism out of business. Today, American jobs are being outsourced to foreign countries, a bet that the dollar will demise. The net affect of job redistribution has been a rise of capitalism in China, Japan, S Korea, South East Asia, and India. Peace dividend encourages employees to work beyond retirement leaving 401k investment untampered. Welfare programs are expensive: Social security unreliability and Medicare insufficient funding and coverage threaten the old, as rising medical costs hamper need medicine and treatment.

Trade axioms are as follows: 1. War is inflationary 2. Peace is deflationary 3. War is unproductive 4. Peace is productive 5. War is a time of fear and despair 6. Peace is a time of hope and prosperity. Investors fear losses but gain confidence when profits start to flow and eventual succumb to greed. Skittish buyers come back into the game buying conservative stocks: solid earnings and secure dividends. Bears become complacent, experience concern, and capitulate. Your fortune is measured by how well your stock price has fared. Phase I-the stock price is pronounced neutral, phase II-price is in an upward trend, phase III-price reverts from strong upward bias towards neutral price range swings, and phase IV-price breaks down. A/D technical indicators tell the investor when the majority of the stocks fail to confirm the strength of the leading blue chip stocks, market leadership is said to be too narrow. The author does admit that A/D can not predict a sudden change in the price and further reinforces that after a peak sudden price drops will happen.

The fourth Mega trend started in 1994 based on the A/D line and the 50/200 moving average. PE ratios are low. Over 1,100 large cap companies had PE ratios less than 20. If you take technology stocks out of the entire group the PE ratio falls to 12.1, a number below the mean of 15/17. The 4th Mega Trend experienced 24% growth over 4 ½ months, the 3rd Mega Trend experienced 38.6% growth over 16 months, the 2nd Mega Trend experienced 18% growth over 3 ½ months, and the 1st Mega trend experience 40% growth over 16 moths. Between July 1998 and Sep 1998, the DOW dropped -20.8%
Prediction 1, the DOW will hit 13,725.60 by 2009, Prediction 2, the Dow will hit 21,545.58 by 2003 (oops), and Prediction 3, the Dow will hit 22,354.67 by 2011. 2006 is expected to be a bad year for the DOW. The author must be betting on rising Oil profits and new technology too support the bull and new militarism will produce peace and the expanding production/taxes will support the interest payments on national debt.

Ralph Acampora is an outstanding technical analysis for Prudential Securities. He is probably most famous for his 1995 forecast that the Dow Jones Industrial Average (DJIA) would hit 7,000 within a few years. Back then the DJIA was in the low 4,000 range and this was a bold forecast at a time when many considered the stock market overvalued. Acampora nailed both the target and the timeframe.

Unfortunately, anybody in the public eye as much as a stock market prognositcator is bound to be wrong many times, and sometimes at important junctures. Acampora was negative on the stock market at the key bottom early in October 1998 (though to be fair, he was presciently bearish 2 months earlier when stocks had been soaring). Although he reversed course and was bullish during the bubble era, he did miss the bottom and some of the "lift-off" rally. And judging by the book, it appears his Big Picture view was wrong in 2000, though whether or not he moved to the sidelines in his daily Prudential commentaries during 2000-2002 is something I am not privvy to.

Of course, Acampora's book predicts that the DJIA could hit 20,000 by 2011. At the time of publication, this was a seemingly big number but one which only implied about 7% compounded returns. Five years later, at about the same DJIA level, we are now looking at a more attractive 12% annual return IF we can hit Mr. Acampora's stock target (actually, 14% if we use the specific 22,000 DJIA level he foresees). It remains to be seen if that can happen.

The book itself is easily readable for anybody who is not fluent in stock market terminology. Acampora is at his best when he talks about past mega-bull markets and discusses the key individuals, stocks, and sectors that made up those eras. His discussions of the bull markets of the 1920's and 1960's are very informative and give you a flavor for the similarities and differences to today.

Focusing on certain stocks at certain times -- railroads, steel and oil in the late 1800's; RCA in the 1920's; IBM and LTV and Xerox in the 1960's -- Acampora gives you a good overview of the characters of previous bull markets. By focusing on the length and extent of previous bull markets, as well as what type of sectors outperformed and by how much, Acampora is able to come up with similar projections for today. Of course, the fact that technology and related sectors had already made percentage gains similar to or exceeding previous sectors that led earlier bull markets might account for the fact that the book was published more or less at the top of the 2000 bull market.

Acampora defines a mega-market as one which lasts at least 8 and up to 17 years, with a move of 300-500%. Since he used 1994 as his starting point, it's understandable why he thought the overall stock market and DJIA had both some point upside as well as time left when the book was published. I would note, however, that as a long-term cycle observer Acampora must certainly be aware that there have been past periods -- approximating 15-20 years (1929-1954, 1966-1982) -- when the stock market was essentially flat.

If the DJIA is destined to "burn off" excess valuations in sympathy with the U.S. correcting domestic imbalances, then it's quite possible that we are one-third of the way through a period where the major indices make little progress, even though some sectors prosper. Needless to say, most investors don't want to think that the market might have another 10 years of treading water before we can see the kinds of moves we saw in the 1980's and 1990's.

I think the best thing about Acampora's book is that it will give you a sense of how long market moves can last and how much money you can make in a REASONABLE amount of time. Anybody who makes 3,200% in the S&P Computer sector during the 1949-66 bull market, or who makes 1,800% in Technology stocks during the 1994-2000 run, doesn't want to lose it all or a good portion of the gains in the ensuing bear market. Investors have to understand that they need to "take some off the table" and reduce exposure.

In the parlance of Wall Street, "Bulls make money, Bears make money, but Pigs get slaughtered." If nothing else, Acampora's book will enable you to make some money as a bull or a bear, and avoid becoming a broken piggy.

Do not waste your time reading Ralph J. Acampora's book. It is another way Mr. Acampora is trying to make money is today's world. When will he have enough?

As other reviewers have said, this book is "proprietary" in nature and close to useless for serious study of the COT data. As a student of this data for over 20 years I always look for any additional insight from authors. One would be best served buying the Steve Briese or Larry Williams book.

Based on true experience an market research I think this is a must for commodity traders.

This book sucks. From the title and description, it should have an in-depth analysis of the Commitments of Traders report from the CFTC. As a self-professed engineer with a love of statistics (page 20), Upperman should have a great vantagepoint. Unfortunately, his engineering and analyses have major flaws.

Upperman either ignores or doesn't understand that successful engineering depends completely on physics. Without well-tested explanative hypotheses that describe how things work, engineers find it very difficult to put things together to fulfill design specs. Upperman skips building a corpus of well-tested hypotheses, and jumps into data mining. Having found some patterns that look profitable (methodology unstated), he back-tests them over arbitrary time ranges, and (surprise!) finds that they look profitable.

"Being right or wrong isn't the goal, the goal is to make money." (page 124)

Without a working model of financial engineering, Upperman finds himself making money on trades that he can't explain, i.e. trading by gut. Further evidence of his muddled thinking lies in his broken conception of risk management, summarized by the dictum "never allocate more than 10% of capital to any one trade" (page 192). This ignores covariance between positions, i.e. being long equities in Japan, Hong Kong, Taiwan, Thailand, and Korea puts 50% of your equity at risk of being zeroed if something affects Asia (like the recent decline in equities).

Floyd Upperman and his editor, Kevin Commins, at John Wiley & Sons either do not know enough, or they knew better and published this text anyway simply because they guessed that enough people would be conned. Either way, they should be roundly censured.

If you want to buy the book, go ahead, just be careful of superbookdeals, they take your money but don't deliver and don't answer emails. Caveat Emptor.

Frustrating to read a book with the word "proprietary" for every interesting item.
Aside from all these great secrets the author won't tell you, the book is very general. Maybe useful for beginners in futures?...otherwise, very disappointing.

The whole book is about how "he" shorted stocks. Nothing about technical or even fundamental analysis.

As the other reader commented earlier, he would short a stock and then go "bad mouth" or "share his insights" on the website or in public paper.

Gained nothing about reading this book. Save your money for other books !

I have been following Asensio since the Solv-Ex scandal. A friend of mine tried to convince me to invest in Solv-Ex. I found Asensio on when I started to research the stock.

I never invested in Solvex because of Asensio. My friend lost about 100K.

This man is brilliant. He has been incredibly accurate. He is living proof that the effecient market theory is impossibly wrong.

The interesting thing to note is the venom that is railed against him. Read these reviews on Amazon!

Asensio's current short pick is KFx. KFx has a ratio of stock price to company sales of over 1,200. Its revenue in the past four quarters was about $950,000, and the stock market values the company at over $1 billion.

Do the math. This man is a market hero.

This book was a complete waste of my time. This guy is so full of ficticious hyperbole it makes me want to hurl. Asensio is the biggest cheat and crook on wall street. No wonder he keeps getting fined by the NASD and banned from the market. Yet, he continues to try and decieve people by creating phony off-shore accounts and hiding behind shell companies. Don't ever do business with this creep or buy his book, he will burn you.

My original hope when picking this book up from the library was to learn about shorting stocks. Unfortunately Manuel Asensio's book is written on a level where few people can even relate. Mr. Asensio speaks in a language that only very experienced stock shorters can even understand. Whereas some of Asensio's use of language is a bit colorful, he writes wildly about all these key names like his audience is completely familiar with unknown CEO's from unknown companies. Why not talk about some of the big time tech stocks that tanked in the early 2000's like Yahoo, Sun Microsystems, and the late Enron? I actually stopped reading this book midway because of the incessant name dropping.

There are a few pages where Ansensio talks about stock shorting basics and how he started in the business. Maybe if Ansensio related to a wider audience, this book would hae a good reputation. Like this he merely talks how he uncovers terrible fraud and should be viewed as a champion of justice. Mr. Ansensio, you need a big time reality check.

On website AsensioExposed.com you'll find what every investor needs to know about short-seller Manuel Asensio. But will never hear from him.Great reading!

Even though much of what is taught in this book is not used as much due to the more recent book by Bill Williams and his daughter, it is still a great read. Gives all the basic principles of Chaos, the Alligator, Fractals, etc. You can't go wrong reading this book if you are using Chaos as a method for trading.

The five stars is only for the cover. However, the content of the book is pathetic. I have read many trading books and several chaos books and I can honestly say this book is neither. I fell for the enlightened self-similar structure cover and wasted my money. Don't repeat my mistake.

If you are interested in chaos and trading, start with Edgar Peters books such as Chaos and the Capital Markets.

The publisher, Wiley, should be ashamed to put out this sort of drivel. Bill Williams is a joke. If you think your trading style is based on your body type, then maybe this book will help you feel better about losing; otherwise skip it and Bill Williams, PhD.'s other lobotomized treatises on trading.

I am a lawyer and have spent most of my life reading, and had read many books on trading before I read this one. It looked like the holy grail, so the three or four key chapters, I read over and over trying to determine 3 simple things: Where to buy/sell short, where to place the stop loss, where to exit the trade. I confess, I was never able to determine that, from the text, although the author seems to assume that he has made that clear to the reader.

I am a BIG believer in Bill Williams and his body of work.

I will admit, this book is the most confusing of his three. It is also the FIRST book of his three. If you buy this now, buy it to "fill in the blanks" but use his later works as the backbone of your trading.

I have personally met with Bill, taken his home study course and even attended a private tutorial. Bill is the real deal. He is a *highly* profitable trader and Bill trades EXACTLY like he describes in his books (simplified over time, so Trading Chaos, 2nd Ed. is the LATEST and most refined method).

READ THE FIRST CHAPTER OF THIS BOOK (it's free online here, just click on excerpts). This chapter alone is worth the entire book. If you just want to trade with no other background information, Buy Trading Chaos, 2nd Edition (not this book) and start with chapter seven. When you get to the end of the book, you'll say, "That's it?!?! Than can't be it!" That's what I said. I then went on to take his home study course (13 weeks) and then went to a private tutorial. 95% of the methodology is IN THE BOOK! The more advanced stuff is for those who are scaling into positions and want more aggressive money management techniques.

Who am I to say this works? I started trading Bill's techniques from scratch. In LESS than 6 months I was up 95% in a medium sized account. I found some like-minded investors and we started our own Hedge Fund (more specifically, a commodity pool). I called Bill personally and he spoke with me at length about how I should flow into and out of my positions, etc. He went far above and beyond the call of duty. I cannot speak to how well my Pool is doing (not legal to disclose - considered solicitation of investors), so I cannot give figures of returns for the Pool.

Buy Trading Chaos 2nd Edition (not this book) and then buy "New Trading Dim mentions" (his second book) and read chapters 9 - 11. Those chapters will give you more ideas of the SCOPE of just what is possible when you simplify your trading and align it with natural market tendencies (chaos principles).

Good luck and Good Trading!

-- Q

This book really is mistitled. Chaos theory for markets is not presented, so look elsewhere for that. The book does present a good theory for the psychology of trading such as "traders differ on value but agree on price" as motivation and explains the development of traders from novice, intermediate, and advanced (skip master and expert level)and the goals for each level. Unfortunately, the methodology for trading with a Chaos background is not touched upon.

Good filler read for background on trading and personal development. Poor on methodology for trading with Chaos. Perhaps Mr. Williams had an epiphany and contends all trades are done in Chaos, so traders should relax. To borrow a line from another author, "some trades will, some trades won't, so what, next trade please."