Book Description
Forbes calls The Successful Business Plan one of the best books for small businesses. This new edition offers advice on developing business plans that will succeed in today's business climate. Includes up-to-date information on what's being funded now.
Customer Reviews:
Very helpful, though forms not fully explained........2007-09-18
On the whole, I found this book was extremely helpful in helping me to evaluate my business in a comprehensive manner and to write my first business plan.
When I sat down to do the work in this book, which was both exhausting and challenging, I found Rhonda Abrams' business-savvy voice to be a welcome companion and her tips to be more than merely an explanation of the forms, but instead to be peppered with sharp insights into how to properly evaluate the feasability of my business. This book certainly got me up-and-running to creating my business plan, which is exactly what I wanted.
My only complaint is that sometimes the forms were not fully explained in the book. For instance, there would be sections of the forms that were not addressed in the text, so I would not know how to fill them out and would have to try and guess what kind of information was being asking for. Fortunately, most of it was either pretty intuitive or explained in the text, but a new addition would certainly benefit from filling those gaps.
Excelente! Lo mejor en el rubro.......2007-07-30
Excelente libro! Luego de realizar una larga búsqueda de libros para realizar un Plan de negocio bueno éste ha sido el mejor. Contiene las pautas no sólo para construir el Plan de negocio, sino que además contiene plantillas para guiar el entendimiento del negocio. Está en inglés, pero es de fácil lectura. Aunque está orientado para empresas de EEUU, no presenta problemas para utilizarlo en otro país (Mi caso para Chile). Es muy completo y extenso, con citas de personalidades que dan tips en cada una de sus hojas. Lo mejor!
Great for building your plan.......2006-09-14
I bought this book, and then purchased the Electronic Worksheets from the publisher! They are great together, and both really helped get the plan started and crunch those vital startup numbers. The book is very well written and easy to follow!
A must if you are writing a business plan.......2006-03-24
THIS is the STANDARD.. must read before writing any serious business plan!!!
Excellent resource.......2005-02-08
While taking a Businees Plan course in my MBA course I bought this book as a guide. Needless to say, I got an A on the B Plan. This is a valuable resource and better than the other books in this catagory.
Book Description
Filled with pragmatic insights, proactive strategies, and best practices, The New CFO Financial Leadership Manual, Second Edition is destined to become your essential desktop companion. This thorough guidebook is essential reading for the CFO requiring an overview of strategies, measurement and control systems, financial analysis tools, funding sources, and management improvement tips.
Customer Reviews:
Caveat emptor.......2007-03-09
I browsed the book and found the table of contents to contain many interesting topics. With the "surprise me!" function, I happened upon the Sale and Leaseback discussion, a topic with which I am familiar professionally.
In my view, the author completely failed to grasp sale-leaseback decision analysis. Leasing is another form of debt financing (with some nuances), which can be very expensive and administrative. Rating agencies and competent creditors will simply capitalize your lease payments (at the cost of debt) and treat it as debt. It actually reduces your debt capacity, not increase it as the author suggests (in his excess cash example). Also, having idle excess cash to borrow against is expensive as the cost of debt exceeds the returns you can use on cash. And buying shares (i.e. returning capital) to "prop up" the share price is an irresponsible, simplistic and inaccurate view.
The treatment of the topic surprised me. God help the company with a CFO that would think as the author does.
Everything you need to know in finance - superb!.......2004-07-14
I found this book very complete and comprehensive as a reference source. It covers the strategic and operational perspectives of the finance function. This is one of the best "CFO" books, together with "CFO Architect" and "CFO Handbook". A little bit overpriced - I would have put it in the US$60 range. Reading this book is like taking an advanced course in preparing yourself for the CFO career. It is very didactic and straightforward. A recommendation for the author: in a future edition, you might consider expanding on the topics of international finance, value based management and corporate restructurings.
Book Description
In the next few years, the world's senior generation will pass on some ten trillion dollars--more than the value of all the companies listed on today's stock exchange--to their heirs. Much of this unprecedented transfer of wealth will take the form of trusts. But the old Prudent Man Rule that trustees have followed for generations has been scrapped, and the new Prudent Investor Rule, which now applies in most states, drastically changes the way trusts must be operated. Trustees cannot hope to learn "on the job": today's investment principles and portfolio management techniques are too demanding. With Investing and Managing Trusts under the New Prudent Investor Rule, Train and Melfe show trustees how to manage trusts according to this important new Rule.
Many current and future trustees are unfamiliar with the far-reaching provisions of the new Prudent Investor Rule, which should soon govern trust investing in all fifty states. Investing and Managing Trusts under the New Prudent Investor Rule explains the investment and administrative obligations--as well as the new liberties--imposed by this stringent Rule.
John Train, an authority on building wealth, brings his deep knowledge and dry wit to this thorough guide, in collaboration with Thomas Melfe, eminent New York trusts and estates attorney. Train and Melfe also highlight the various forms of trusts and the major suitable and unsuitable types of investments, so that family trustees, as well as readers in the investment and trust business, law, and financial planning can understand the key strategic and managerial considerations.
This practical, straightforward guide--the first comprehensive discussion of the new Prudent Investor Rule for private trustees-comes complete with useful sample forms, management guidelines, checklists, and a glossary. It is an essential reference for all professional and family trustees as well as their legal and financial advisors.
Customer Reviews:
Finally a complete and easy to follow book on trusts.......1999-09-09
This is one of the few books of its type to explain all the important data points of managing trusts and investing. Its straight forward and comprehensive. This is written for lawyers and non-profressionals with an interest in this area.
This book could become the industry standard.
Book Description
Wealth management is one of the areas in which banks and other personal financial services players are investing heavily. But the market is changing fast. Going forward, players therefore need to adapt their strategies to the new realities: what worked in the past will not, for the most part, be appropriate in the future. This unique book, written by a former McKinsey consultant, offers an up-to-date, detailed, practical understanding of this exciting area of financial services.
Customer Reviews:
The book I was looking for ages.......2007-08-14
If you are experienced wealth manager of just starting the carrier in this book you will find everything you need - from most recent trends in the market to client profiling, segmentation to business structures. That is the book I was looking for ages. My respect and acknowledgement to the author.
A fantastic book.......2007-01-15
A book any banking professionnal should read to understand the stategics underlying the wealth management industrie.
Exceptionally useful book.......2006-09-06
Fantastic book. Genuinely global perspective and bang up to date. includes difficult-to-get data on industry economics and benchmarks, a fascinating future perspective on industry growth, and incisive analysis of a vast range of surveys and reports that I (a financial services strategy veteran) never knew existed. Very clear and well written. Invaluable for helping our organisatn develop a wealth management strategy.
Average customer rating:
- A good book for the designer of energy risk managment tools
- Not for the average industry professional
- Good overview
- Excellent subject treatment
- excellent book
|
Energy and Power Risk Management: New Developments in Modeling, Pricing and Hedging
Alexander Eydeland , and
Krzysztof Wolyniec
Manufacturer: Wiley
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ASIN: 0471104000 |
Book Description
Praise for Energy and Power Risk Management
"Energy and Power Risk Management identifies and addresses the key issues in the development of the turbulent energy industry and the challenges it poses to market players. An insightful and far-reaching book written by two renowned professionals."
-Helyette Géman, Professor of Finance
University Paris Dauphine and ESSEC
"The most up-to-date and comprehensive book on managing energy price risk in the natural gas and power markets. An absolute imperative for energy traders and energy risk management professionals."
-Vincent Kaminski, Managing Director
Citadel Investment Group LLC
"Eydeland and Wolyniec's work does an excellent job of outlining the methods needed to measure and manage risk in the volatile energy market."
-Gerald G. Fleming, Vice President, Head of East Power Trading, TXU Energy Trading
"This book combines academic rigor with real-world practicality. It is a must-read for anyone in energy risk management or asset valuation."
-Ron Erd, Senior Vice President
American Electric Power
Customer Reviews:
A good book for the designer of energy risk managment tools.......2005-09-29
If you develop computer code in this field it could be a help, but if you are more interested in knowing more about the ways to avoid risk in the energy business I would recommend another book. There are also not enough practical examples to give a good understanding of the principles.
Dynamic hedging is not explained to the extent wanted. The examples are also not very clear.
Not for the average industry professional.......2004-08-20
The authors have written a very detailed, well structured text on the different models and developments in the power and fuel markets. It's a very complex, mathematical analysis of the different techniques being used, and the text may lose a number of readers in the overly rigorous formulations. For those involved in risk management, market modeling, or asset management, the book would be a good secondary or tertiary read after you've established a sound understanding of stochastic models and current hedging and pricing techniques in the marketplace. For the layman in the industry, the book will be far too heavy and not worth the read.
Good overview.......2004-06-07
The management of risk in the context of energy or weather is quite different than in other contexts, due to the peculiarities of the data that occurs in energy prices. The high volatility of energy prices can range, as the authors of this book point out, between 50-100% for gas, to 100-500% for electricity. No doubt this kind of volatility, and other properties such as correlations and mean reversion, entails that some different mathematical strategies for modeling energy derivatives be devised. The authors give a good tour of some of these strategies, and anyone interested in energy derivatives will gain a lot of insight into their modeling when reading this book. Due to space constraints, only chapters 5 and 7, which this reviewer considered the most important of the book, will be reviewed here.
In chapter 5 the author presents techniques for energy modeling that go beyond the used of the convenience yield by using forward pricing techniques. The goal is to describe the dynamics of future contract prices that takes into account the correlations with other futures, and not on the price evolution of a single contract. Thus it is the `forward curve' that is relevant for obtaining a useable model for derivative cash flow. The HJM model is presented as one of these, with changes in the forward curve over a particular time interval represented as a linear combination of random perturbations. For energy markets, each perturbation is specified by a deterministic shape function multiplied by a Gaussian factor. The unobservability of the factors determining the forward curve evolution makes the use of historical data mandatory if the parameters are to be estimated. But lack of sufficient historical data and its nonstationarity complicate this estimation. The authors discuss the Schwartz-Smith multi-factor model as an example of a forward curve dynamics model and give some solutions. They then move on to a model that specifies the dynamics for only the contracts that are actually traded, which in the literature are called `market models.' The model they actually discuss is a multivariate geometric Brownian motion representation of the forward curve dynamics, where the volatility and drift functions are linear functions of the forward prices. The authors then derive the `discrete string models', where it is assumed that the number of factors is equal to the number of contracts, and the random factors are governed by ordinary Brownian motion. String models are represented as having the advantage of being able to directly observe the factors in the historical data. The authors apply string models to multi-commodity cases, and discuss an example for monthly forward prices. They show how to match the current forward curve, the option prices, and the correlation structure for this model.
The discussion in chapter 7 revolves around finding better models for the dynamics of power prices that capture the special properties of energy prices, such as mean reversion and seasonality, and the need for stable models. They therefore introduce `hybrid models', which they claim give a more natural representation of the dynamics of power prices, make use of nonprice forward-looking information, and can take the historical data on power prices and then extend it to information on fuel prices, outages, etc. The construction of these models is based on the use of nonlinear transformations on a collection of random variables. The random variables are essentially the system demand, natural gas and oil price, outages, emission prices, and weather at a particular time. The power price then can be written as a function of the dynamics of these factors, the latter written by the authors in terms of the corresponding tradables. Recognizing that hedging cannot be done on some of these factors, they adjust the power price formula so that the power tradables, i.e. the forwards and option prices, are exactly matched. This matching transformation is chosen so that if the forward contracts and options are priced using the adjusted formula, one recovers the exact current prices. The model, as the authors summarize it, is an attempt to explain the behavior of the tradables in terms of the evolution of the underlying factors and static adjustments to the terminal probability distribution. Historical information on the tradables and spot products is not used to calibrate the model, but it is used to validate the model. The authors distinguish between `reduced-form' hybrid models, where the transformation is calibrated from the historical prices, and `fundamental' hybrid models, where the transformation is calibrated from the market structure and is only tested on the historical prices. The authors discuss an example of a reduced-form hybrid model that is heavily parametrized, but has the advantage of using price data more efficiently. The rest of the chapter concentrates on fundamental hybrid models, with the author first discussing how power prices are formed in competitive markets. They consider a typical pool market, with the price determined via auction mechanisms. The authors then try to identify and characterize the underlying random variables that actually affect power prices. The time series for the price of power is written in terms of the demand using a `bid stack' function. The bid stack function is approximated by a `generation stack' that is found for a given time by sorting generation units by their generation costs. This approximation is checked by comparing the marginal generation costs generated by the generation stack with the distribution of power prices determined by the time series via the bid stack. There should be agreement in both approaches between the higher order moments. This comparison forms the basis of the authors' hybrid approach to modeling power prices. A transformation is found which relates the marginal generation costs to the distribution of power prices with the requirement that the prices of market instruments used for calibration are matched, and the higher moments are (approximately) preserved. The transformation is not unique, and in fact a family of transformations induced by the multiplication and stack scaling operators can be found.
Excellent subject treatment.......2004-05-06
Until now there were a handful of papers, precious few books, and mostly inside proprietary models and experience that dealt with the complex subject of power trading and all its flavors. This book provides a nice summary of many of the present issues. The treatment of the subject is somewhat mathematically rigorous, so the book might not be for traders as much as it is for quants or risk managers.
To me, the greatest strength of the book lies in its fairly detailed analysis of what DOESN'T work, i.e. why common models and methods from the financial and other commodity realms can not be successfully grafted onto the energy market without risking significant valuation and cash flow prediction errors. The hybrid model they formulate towards the end of the book is very similar to Skantze and Ilic (2001). The departure from most previous models is that they attempt to use the markets to formulate and calibrate the structure instead of relying too much on past historical price/load data, which without some empirical understanding of the underlying processes, is fraught with danger due to rapidly evolving nature of the power market (or at least once rapidly evolving--it seems to be a little static at the moment).
Some familiarity with the market and stochastic/statistical mathematics is assumed. References to specific topics and more in depth analysis of particular subjects are good. The authors have a grip on real-world trading, risk, and cashflow issues, which makes this a useful reference for just about anyone associated with those aspects of the power market. I recommend it.
excellent book.......2003-03-18
Extremely well written and right to the point, with the appropriate level of technical detail, Eydeland and Wolyniec's Energy and Power Risk Management is arguably the best book on the subject. A must have for every professional in the industry.
Amazon.com
Why do so many otherwise rational individuals make irrational decisions when it comes to money? Financial journalist Gary Belsky and Cornell University psychology professor Thomas Gilovich contend the answers can be found--and the deficiencies remedied--with help from a relatively new science called behavioral economics. Still largely unknown outside academic circles, the field can be traced to research on the impact of rewards and punishments on human judgment and decision- making that first were undertaken at Jerusalem's Hebrew University some 30 years ago. In Why Smart People Make Big Money Mistakes , Belsky and Gilovich update this pioneering work and show readers how to understand exactly why they invest, spend, and save as they do. More importantly, using examples that everyone can identify with and language that anyone can understand, the authors offer dozens of workable suggestions that can help readers manage their money better. "We believe that by identifying the psychological causes behind many types of financial decisions," they write, "you can effectively change your behavior in ways that will ultimately put more money in your pocket and help you keep more of what you already have." --Howard Rothman
Book Description
Why do so many otherwise smart people make foolish financial choices? Why do investors sell stocks just before they skyrocket -- and cling to others as they plummer? Why do shoppers overspend when using credit cards rather than cash? What do our habits of tipping or buying lottery tickets indicate about our relationship with money?
In this fascinating investigation of the ways we spend, invest, save, borrow, and waste money, Gary Belsky and Thomas Gilovich reveal the psychological causes -- the patterns of thinking and decision making -- of irrational behavior. Most important, they focus on the decisions we make every day and, using entertaining examples, provide invaluable tips on avoiding the financial faux pas that can cost thousands of dollars each year.
Download Description
Why do so many otherwise smart people make foolish financial choices? Why do investors sell stocks just before they sky rocket -- and cling to others as they plummet? Why do shoppers overspend when using credit cards rather than cash? What do our habits of tipping or buying lottery tickets indicate about our relationship with money? In this fascinating investigation of the ways we spend, invest, save, borrow, and waste money, Gary, Belsky and Thomas Gilovich reveal the psychological causes -- the patterns of thinking and decision-making -- that result in irrational behavior. Most importantly they focus on the decisions we make everyday and, using entertaining examples, provide invaluable tips on avoiding the financial faux pas that can cost thousands of dollars each year.
Customer Reviews:
Great Introduction to Behavioral Finance.......2007-07-21
For more than 20 years I have been fascinated why so many people make financial decisions which defy rationality. Unfortunately, I find it extremely difficult to read and comprehend most of the research papers that has been done in the field of behavioral finance. The last 5 years have seen several good books explaining the results of the emerging field of behavioral finance. This book is one of those good books.
As a fan of index funds, I enjoyed reading this book's explanation and recommendation for suggesting index funds.
This book is very readable and is an excellent primer on the major concepts which are emerging from behavioral finance research.
Socrates was right when he uttered his famous quote "Know Thy Self". One of the hardest things to do is to understand why we do what we do sometimes. This book helps explain some of this natural human behavior, and how we can manage it to make more rational financial decisions.
I would suggest companion books to supplement this book including:
Index Mutual Funds: How to Simplify Your Financial Life and Beat the Pro's
How to Use Psychology to Achieve Your Financial Goals
Are You Using the Right Rules to Plan Your Retirement?
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
The Coffeehouse Investor: How to Build Wealth, Ignore Wall Street, and Get On With Your Life
The Bogleheads' Guide to Investing
Entertaining and good stuff.......2007-07-03
The book is easy to read and it also covers a lot of interesting topics. Highly recommended.
One of my favorite personal finance books.......2007-05-15
It's been years since I first read this book, but I still reference it often when talking about money decisions. It's readable, fun, and informative. I also enjoy the situational questions that begin each chapter. Even when you can see what point they're getting it, it's easy to see yourself making the same mistake in a moment of decision.
Out of the ivory tower and into your real life.......2007-01-09
this book is an easy well-written guide to understanding the academic field of behavioral economics and to bring it into the real world of our lives. The original research studies are really dry and hard to read even for a psychologist (I am one).....this is reader friendly and practical. Helped me understand some of the errors I made and still fall into....like noticing the stocks I have really done well with and forgetting about the ones that did not do so well so I think I have done really well in the market the past year..but then I look at the cold hard numbers and guess what? I did not do nearly as well I thought. Very helpful to use with patients who are having credit card woes (future dollars are so cheap). Dr. Mary Gresham Atlanta Ga
Are you mentally fit to make money decisions?.......2006-12-21
This book helps to show you some of the common pitfalls that people make when making decisions involving money. While there are topics related to investing, there are also general "money-decision" topics. There were actually some mistakes that I did not even think of but when I read them I realized that many of my friends made these mistakes. For me the biggest lesson that I learned was the part about mental accounting. This is one of those books that you think is all common sense but when you think about it, you realize that you too make these mistakes.
Amazon.com
Should you save money in your child's name? Is paying off your home mortgage a good idea? Should you invest in index funds? Ric Edelman, syndicated columnist and PBS personality, answers these and 85 other commonly asked questions in The New Rules of Money.
The book covers questions about income and debt, college planning, home ownership, investment strategies, and family matters. Accessible and easy to read, The New Rules for Money is for those who have little time for financial planning but want good, straightforward advice about what to do with their money.
Book Description
Are You Playing By the New Rules?
Forget what you know about personal finance. The old rules no longer apply. Ric Edelman's 88 strategies, tailor-made for today's economy, will show you how to achieve financial success. Ric is famous for making personal finance fun, and you'll discover how easy it is to put his advice into action!
Is it smart to buy company stock with your 402 (k) plan? Discover the right way to handle your company retirement plan.
See Rule #85
Learn why you must carry a big, long mortgage -- and never pay it off!
See Rule #21
Learn why not to invest in the new Roth IRA-and discover the most powerful anti-tax investment available today.
See Rules #69 and #76
Planning to retire? Learn why you won't -- and what you must do instead.
See Rule #88
Find out why those who invest in S&P 500 Index Funds will wish they hadn't.
See Rule #36
Learn why that higher - paying job could actually cost you money.
See Rule #32
Customer Reviews:
Prepare For Your Elder Years, To Feel Secure........2005-07-01
This is an interactive how-to book fulled with relevant comic strips and cartoons -- a very graphic publication. In it, he promotes reverse psychology to get what you want; my sister mastered in this type of child rearing which I could never learn.
This book is about setting goals, not just realistic, but real. Make this goal as though you were living it today. Visualize. By doing this, your enthusiasm will rise, your focus will intensify, and you'll be able to stick to your goal.
Nothing is impossible. Sure enough, one day, you will make it happen, because you'll have made it important to you, vitally important. After you set your goal, you have to plan how to achieve it. Too many retired people are so focused on maintaining a living that they sometimes forget to have a life, and become 'bored to tears!'
Lincoln said: "And in the end it's not the years in your life that count. It's the life in your years." He gives several "what-if" and "if-only" scenarios. Whatever you choose, however you go about achieving your goals, the main end result is to be happy along the way and when you reach your destination. We may not get what we want when we want it. I was told by a stranger some years ago that God does not work on our time, but He has a plan for each of us in His own time.
John Greenleaf Whittier said, "For all sad words of tongue and pen, the saddest are those "It might have been." He tells us that "Bill Gates is rich because he own a whole lot of Microsoft, the software company he started. He's the richest person in America, perhaps the world." Part II shows you how to have your cake and eat it, too: take your choice, pound cake is fixed income investments and stocks; marble cake is filled with both. Cupcakes are fads. Avoid them.
complete waste of YOUR money.......2005-03-10
this book is contrarian to a fault. i think the author purposely incites controversy. the bottom line is this: every individual's financial circumstances vary and no one answer is correct for everybody. if you have student loans at 8% and a mortgage at 9%, it makes more sense obviously to pay down the higher debt, deductions be damned. many people make stupid mistakes such as making buying decisions based on tax deductions without thinking about the consequences to their budgets. they leave out property taxes, maintanence, etc. that adds up. for most people, paying down other debts first may make sense, but to keep your mortgage unpaid in the hopes of making double-digit returns in the market is foolish...it is much more complicated than that. there is your tax bracket, fees and expenses, time frame, investment risk, etc. such blanket statements are foolish for edelman to make. also, roth IRA's can make alot of sense to those people who qualify for them; his argument to not invest in it is weak at best and is based on loose assumptions. also, in many parts of the country, buying a starter home/townhome can make alot of sense. you can sell it for a decent profit in many cases, at least if you stay more than a couple of years. this beats renting anyday, and in his arguments he never addresses the real losses of renting, including the increase in the annual rent which in some markets can be exorbitant. anyway, read it and draw your own conclusions. there is never a substitute for common sense.
Interesting, but self-promoting.......2004-11-14
As a young, beginning investor, I have been educating myself about investments, savings, etc. With that in mind, I have been avariciously reading almost all the investment books I can find. Edelman's book first brought to my mind a concern about index funds, because every other academic book I've read supports them. I think Edelman has an axe to grind, being an personal finance manager and simply put, to Edelman, Index funds are the anti-christ and must be eliminated. However, his logic does not make sense, nor do his facts and figures hold up. The index funds simply mirror the market, and this they have done very well. He neglects to go into their low fees, and also he does not address the issue of survivorship of mutual funds, that is, that the current data that is published includes only those funds that survive so they are naturally better. Poor funds are simply eliminated or absorbed into other funds.
His comments on mortgages I found interesting, but consider that if you are getting a 10% return on an investment versus an 8% mortgage, that might make sense, but to get %10 you are going to have to invest in something risky (stocks). Can we reasonably assume that 10% is a good reasonable return? I don't think so.
So in sum, the work is biased toward moving money to professional managers while at the same time providing us with statements that are not well thought out. Better books I'd recommend are Malkiel's 'A Random Walk Down Wall Street' and Bernstein's 'The Four Pillars of Investing.'
Huh what?.......2004-05-24
I found a review supposedly by a school teacher from Florida complaining about middle income brackets of $54,000. He goes on to to say that he won't see that in 35 years.
I work for a school system in Pennsylvania and I don't know how I'd live on only $54,000/per year. I also know people in Florida who are making 6 figure incomes. One guy I know made over $50,000 last month.
Don't blame your profession, your location or Ric Eedelman. Blame the guy you see when you look in the mirror!
Edelman is a controversial guy.......2004-01-15
No doubt that Edelman is a very controversial guy--just check out these reviews. However, Edelman is also very knowledgeable and very accurate. He accurately called the Index Fund fallout as early as 1998. HE WAS WIDELY CRITICIZED FOR THAT. But as someone who listened to him, I am glad he was so perceptive!Likewise, Edelman suggests to carry a mortgage vs having a paid off mortgage and invest the difference. As another astute reviewer commented, this is a lot like the old term vs cash value life insurance debate. Which is better?Cash value is generally the better value for the insurance salesman. Likewise, a paid off mortgage is not doing you any good because it is a liability and provides no income. Better to put that extra mortgage moneyin good investments that can grow 20%-25% per year.Edelman may be controversial but his advice is right on.
Book Description
This reference work and graduate level textbook considers a wide range of models and methods for analyzing and forecasting multiple time series. The models covered include vector autoregressive, cointegrated, vector autoregressive moving average, multivariate ARCH and periodic processes as well as dynamic simultaneous equations and state space models. Least squares, maximum likelihood, and Bayesian methods are considered for estimating these models. Different procedures for model selection and model specification are treated and a wide range of tests and criteria for model checking are introduced. Causality analysis, impulse response analysis and innovation accounting are presented as tools for structural analysis.
The book is accessible to graduate students in business and economics. In addition, multiple time series courses in other fields such as statistics and engineering may be based on it. Applied researchers involved in analyzing multiple time series may benefit from the book as it provides the background and tools for their tasks. It bridges the gap to the difficult technical literature on the topic.
Book Description
Everyone from journalists to market pros are turning to behavioral finance to explain, analyze, and predict market direction. In contrast to old-school assumptions of cool-headed rationality, the new behavioral school embraces hot-blooded human irrationality as a core feature of both individuals and financial markets. The 2002 Nobel Prize in Economics was awarded to scholars of this new scientific approach to irrationality. In Mean Markets and Lizard Brains, Terry Burnham, an economist who has a proven ability to translate complex topics into everyday language, reveals the biological causes of irrationality. The human brain contains ancient structures that exert powerful and often unconscious influences on behavior. This "lizard brain" may have helped our ancestors eat and reproduce, but it wreaks havoc with our finances. Going far beyond cataloguing our financial foibles, Dr. Burnham applies this novel approach to all of today's most important financial topics: the stock market, the economy, real estate, bonds, mortgages, inflation, and savings. This broad and scholarly investigation provides an in-depth look at why manias, panics, and crashes happen, and why people are built to want to buy at irrationally high prices and sell at irrationally low prices. Most importantly, by incorporating the new science of irrationality, readers can position themselves to profit from financial markets that often seem downright mean. Mean Markets and Lizard Brains skillfully identifies the craziness that is part of human nature, helps us see it in ourselves, and then shows us how to profit from a world that doesn't always make sense.
TERRY BURNHAM is a leader in the application of biology to economics and finance. He was an economics professor at Harvard for many years, beginning at the Kennedy School and, most recently, at the Harvard Business School. His biological research has taken him to Africa to observe wild chimpanzees and to the laboratory to study the role of testosterone in negotiation. He is coauthor of the international bestseller Mean Genes. Before joining the Harvard faculty, he worked at Goldman Sachs & Co. and was the president and CFO of the successful start-up biotechnology firm, Progenics Pharmaceuticals, whose work in AIDS and cancer treatment has been widely praised. Dr. Burnham has a PhD in business economics from Harvard University, a master's in finance from MIT, an MS in computer science from San Diego State University, and a BS in biophysics from the University of Michigan. He served with distinction as a tank driver in the U.S. Marine Corps. .
Download Description
Everyone from journalists to market pros are turning to behavioral finance to explain, analyze, and predict market direction. In contrast to old-school assumptions of cool-headed rationality, the new behavioral school embraces hot-blooded human irrationality as a core feature of both individuals and financial markets. The 2002 Nobel Prize in Economics was awarded to scholars of this new scientific approach to irrationality. In Mean Markets and Lizard Brains, Terry Burnham, an economist who has a proven ability to translate complex topics into everyday language, reveals the biological causes of irrationality. The human brain contains ancient structures that exert powerful and often unconscious influences on behavior. This "lizard brain" may have helped our ancestors eat and reproduce, but it wreaks havoc with our finances. Going far beyond cataloguing our financial foibles, Dr. Burnham applies this novel approach to all of today's most important financial topics: the stock market, the economy, real estate, bonds, mortgages, inflation, and savings. This broad and scholarly investigation provides an in-depth look at why manias, panics, and crashes happen, and why people are built to want to buy at irrationally high prices and sell at irrationally low prices. Most importantly, by incorporating the new science of irrationality, readers can position themselves to profit from financial markets that often seem downright mean. Mean Markets and Lizard Brains skillfully identifies the craziness that is part of human nature, helps us see it in ourselves, and then shows us how to profit from a world that doesn't always make sense.
TERRY BURNHAM is a leader in the application of biology to economics and finance. He was an economics professor at Harvard for many years, beginning at the Kennedy School and, most recently, at the Harvard Business School. His biological research has taken him to Africa to observe wild chimpanzees and to the laboratory to study the role of testosterone in negotiation. He is coauthor of the international bestseller Mean Genes. Before joining the Harvard faculty, he worked at Goldman Sachs & Co. and was the president and CFO of the successful start-up biotechnology firm, Progenics Pharmaceuticals, whose work in AIDS and cancer treatment has been widely praised. Dr. Burnham has a PhD in business economics from Harvard University, a master's in finance from MIT, an MS in computer science from San Diego State University, and a BS in biophysics from the University of Michigan. He served with distinction as a tank driver in the U.S. Marine Corps. .
Customer Reviews:
How people have built in problems with thinking rationally and how to exploit irrationality in markets.......2007-05-01
What a cool book! Terry Burnham wants to help his readers understand that while we fancy ourselves users of reason and rational beings we still have blind spots in our thinking and behavior that can get us into a great deal of trouble when making investment decisions. That is, unless we are explicitly aware of these problems and consciously work to train ourselves to avoid them and be continuously on guard against falling into their pit.
Burnham organizes the book into four parts. The first chapter is the introduction and presents the gist of the book. What is a mean market? The fact that markets can defy the accepted bromides about rational markets and wipe out investors surprisingly quickly and without any hint of mercy. The idea of cosmological indifference comes to mind. The author's vivid image of the "Lizard Brain" refers less to any explicit structure in the brain or any claim to specific evolutionary path to brain development.
Instead, Burnham is referring to the fact that we all have a set of tendencies, hard wired ways of perceiving the world, and bred in behavioral tendencies that worked well in keeping our ancestors alive in the ancient world. However, they are as out of place in our technological world as a lizard might be at the Met. For example, our brains are very good in seeing patterns. The problem is we often see patterns where none exist. On the other hand, we are terrible at perceiving frequencies. However, with training and discipline we can learn to deal with both of these natural tendencies. Without being aware of these potential problems, we too often get ourselves in trouble.
The first part weighs the traditional Efficient Market Hypothesis (EMH) of rational markets against the oceans of evidence that people do behave irrationally. Here is where I differ slightly with Burnham. My understanding of EMH does not require that each individual act rationally or that any given price at any instant in time be the "right" price. Instead, it indicates that in the aggregate that most irrationality cancels each other out and resources get allocated surprisingly efficiently. As for prices, the notion is not that the price is free from being too high or too low, but that there is a "right" price at all that will be in the area of most of the trading with some of it too high and some too low.
However, the EMH doesn't help the investor account for irrationality or how to avoid its dangers in one's own behavior or capitalize on its existence in others. And this is where the book's strengths are to be found.
The second part takes us through a survey of evidence of irrationality in the American markets and the limits of growth that are so often ignored in pricing equities. The author also takes us through the uses and perceptions of money, barter, inflation, and deflation. All interesting and useful information.
In part three we get Burnham's actual views on how to pull all this together in viewing Bonds, Stocks, and Real Estate for investments at the time of this book (2005). Burnham is an economist and discounts the optimism of many people who tout these products. I think he makes a great deal of sense. However, it is up to you to make your own decisions.
Part four provides two chapters full of principles for us to apply in making our own investment decisions. The first chapter gives "timeless advice". That is, those principles that are applicable in any type of market at any time. The second chapter offers "timely advice". That is, advice that is market condition specific. Burnham gives us principles to apply in rising or declining markets and how to know when to use them.
The issue is whether we have the discipline to apply them or will we surrender to the emotional pull of the lizard brain and find ourselves in trouble.
Burnham makes this subject quite lively, is able to put some nice color to it with some good anecdotes, illustrative stories, and some actually funny jokes.
Recommended.
Not a Comprehensive Look at the Topic.......2007-03-21
I purchased this book with the assumption that it would be a more in-depth treatise on investor psychology/behavioral economics. There was some of this sprinkled throughout the book, but overall it was not comprehensive. This does not, per se, make it a bad read. In fact, it was an easy read despite the annoying movie references throughout the book. But if you are looking for a more thorough look at this topic, your best bet is to look at the offerings of other authors.
Very good read, more intellectual rigor perhaps.......2006-10-04
I thoroughly enjoyed the book. Almost 2 years before the fact, it was pretty predictive of what might happen to the housing bubble. Actually I am thinking about making career moves in the direction of Behavioral Finance/Economics so was happy to see a 'popular" book in this area. But this is also the problem, I am looking for more scholarly accounts too!
Almost 5 stars; and a very enjoyable read........2006-05-01
A great read; appeals to the counter-intuitive insights of successful investors and explains a lot of human nature and how destructive it can be from an investment standpoint.
I found his advice at the end however strange and incorrect. He argues against adding to a position when it goes down in price. I have added to positions and this I have found to be very effective. For similar reasons, he argues against dollar cost averaging, which I have also found to be profitable. The reasons both of these strategies can be useful are that they are counter intuitive, so his opposition to these strategies seems out of place with the rest of the book. Also, in both these instances, I find his justification not to be persuasive.
The author is clearly a smart guy who writes well. I would have given the book 5 stars if it were not for those 2 issues. I purchased the book on Amazon.com and would recommend that every investor read this book.
Insightful and Fun!.......2006-04-17
I found my time well spent reading this book. For would be readers - it seemed to me that there really were two parts to this book:
1. An investigation of irrational economic decisions by investors with roots in our evolutionary history.
2. A reasoned (but somewhat superficial) analysis of current macroeconomic situation (US debt, current account deficit, stock valuations).
And there are numerous references to modern studies that help debunk some of the myths of investing and finance. I particularly enjoyed learning about 'survivorship-bias'. And finally, loved the sense of humor! Memorable quotes from popular works of arts kept me laughing and makes this a page-turner from the start.
On the downside, by the time I got to the end, I was more than a little tiresome of the repeated references to 'lizard-brain'. That point is made pretty well early on. And while Terry makes a convincing case that the bull market run in U.S. Real Estate, Bonds and Stocks is short on breath - this does not (IMHO) come close to justifying his 10% stock allocation advice. In this respect - not incorporating international stocks into a recommended financial strategy seems particularly glaring. Like never before, investors today have the ability to invest in overseas markets. By Terry's own theories, Japan (and perhaps emerging markets) would seem to be primed for a long bull market (coming off a long period of low growth and adverse investor sentiment). Keeping savings in declining US dollars while overseas currencies and markets appreciate seems ostrich like (if not lizard brained). Material, perhaps, for a second edition ?
Book Description
It presents a comprehensive and organized collection of the evidence contradicting market efficiency. Sets forth and synthesizes a paradigm shift in financial economics, exploring rational finance, behavioral finance, and the new finance. This book provides revolutionary and controversial ideas lending to the acceptance of the notion that capital markets are inefficient. Portfolio Managers, Financial Analysts, and Security Analysts.
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