2 comments about Statistics of Financial Markets: An Introduction (Universitext).

1. Got the friendly yellow paperback version. The book is in three major parts; Options, Time series and then Value at Risk.
   
   The first section starts out well with an overview of Stochastic Processes and then moves on to Stochastic Integrals and Differential Equations. All of this is motivation to help with the pricing of Options, starting with European, then American and moving onto Exotics and Bond Options. It covers all the major points, though it is a little limited in the Exotics, it does have a good references to more thorough works.
   
   The second section on time series works with ARIMA, ARCH and GARCH models.
   
   The third section (labeled Selected Financial Applications) is mostly about the VAR though is has some really good commentary on the Volatility of Option Portfolios.
   
   An added bonus is that you can download the PDF version of the book, and all the data for the examples from the web, with quite a neat one-time license.
   
   I would recommend this book to people needing a good overview of the subjects listed above, and as a handy reference.



2. This book was such a relief after going through tens of books/lectures notes on stochastic calculus. Most math books give the theory behind Ito calculus (martingales, measure theory etc.), but fail to give the motivation and reasoning behind abstract definitions. This book does an excellent job in deriving many seemingly-complicated math formulas (or, theorems) using intuitive terms. It is an excellent read for people who have a reasonable background in probability theory, and are wishing to learn stochastic calculus (plus finance). I strongly recommend it to anyone who wants to learn the rudiments of Ito integral and see its applications in finance.

1 comments about Statistical Methods for the Social Sciences (4th Edition).

1. As a doctoral student with an interest in quantitative research and evaluation methodologies, I am currently using this book for a course in regression analyses. It is a fairly easy read for those who are familiar with statistics and I would recommend it to those wanting to learn more about quantitative analyses. The examples are up-to-date compared to previous editions. There appear to be no substatial content differences between this edition and the previous editions (in my experience having read both).

5 comments about Creative Destruction: Why Companies That Are Built to Last Underperform the Market--And How to Successfully Transform Them.

1. This book takes some interesting insights from economist Joseph Schumpeter (who coined the term "creative destruction") and leadership expert Ron Heifetz and then goes on to make overly broad generalizations from them, supported by an extensive but questionable data analysis. The authors go on at length about the size and scope of the McKinsey corporate database that provides much of the backbone for the book's conclusions, but anyone who studies excellence or best-practices knows that you dont learn much about them by studying large, general samples; in fact, such samples are designed to rule out the exceptions. (And I'll just overlook the fact that Enron is one of the exceptional performers they highlight.)

   At bottom, the book fails to deliver on either of the promises in its subtitle. The primary reason seems to be that little of it is drawn from practical experience with exceptional companies. Despite its scope, the McKinsey database doesn't really answer, from a management point of view, why most companies have underperformed. (Although less systematically presented, you can get more wisdom from a practitioner's book like Tom Kelly's "The Art of Innovation.") This is most obvious as the book moves into suggestions for "how to change" these companies: neither the suggested methodology for strategic planning nor the successful case examples provide anything more than some basic, general ideas that have been better covered elsewhere in the organizational development and management literature.

   The subtitle also suggests that the book presents a refutation of the arguments for corporate sustainability that Collins and Porras gave in "Built to Last". Interestingly, Foster and Kaplan disdain to address that book directly or even cite it, except in a buried footnote. This is unfortunate because they present data on some of Collins' and Porras' profiled companies that suggest they have performed far more poorly than "Built to Last" would lead you to believe; it would have been helpful to understand who was overstating what. Collins and Porras also stress in detail that built-to-last companies "preserve the core / stimulate progress"; it is not clear that "creative destruction" differs from this in any significant way. In sum, the issue of how to create long-term value will still be a big question when you've finished reading this book.

   It is interesting to note, as the authors are current and former McKinsey consultants, that a majority of the underperformers in their database are McKinsey clients. If these companies failed to turn around after investing in McKinsey advice, what is the likelihood that anyone else will do it from ideas they got reading a book?




2. One good thing about books written by McKinsey people is that if they write something, it's gonna be smart. Because otherwise they just keep the silence.
   And this book is not an exception to this rule. Whilst the readers could find the idea of a permanent review and renovation of a corporate businesses portfolio fairly old and discussed so many times in books of Drucker, Schumpeter and other authors, there're some issues which make reading of "Creative Destruction" worth the time.
   First, unlike two previously mentioned famous gentlemen, Foster and Kaplan bothered themselves with sizable stock market data research and analysis. This approach should really become a standard if we ever want to see organizational behavior and corporate strategy to become scientific disciplines and not a genre of fiction literature with well-known set of rules "how to write more or less good novel".
   Second, even readers very familiar with literature about corporate strategy and portfolio analysis methods could find some profound insights on these 350 pages - may be different ones for different people. For example, a clearly stated paradox between operational excellence and innovation definitely deserves thinking about, since it's just so easy to say: "Yes, we need both - tight controlled low cost operations AND creative business development" or "We need to build the great team committed to the corporation AND sometimes we need to kick a part of the team out just to ensure great stock returns", - but isn't it the same as requiring water to become dry at certain moments, convenient for the observers?

   Bad thing. Do not expect to find in the book an answer to the question, stated at the very beginning. As well as where to find the businesses worth investing to. The authors do not know. Or they do not say - may be just to give to the reader an idea to invite McKinsey to think together about these issues in corporate HQs.




3. Foster's previous work - Innovation, the Attackers Advantage, is a masterpiece, and this follow up is an excellent read. An interesting observation at the start contrasts a company trying to excel and innovate, and the market as a Darwinian force, ruthlessly selecting the `best' irregardless of past performance. The message is the same, stark reminder as Clayton Christensen's - past excellence is no guarantee of future survival.

   Having delivered this baleful message, the book distinguishes between typical management techniques - measurement, control, which leads to operational excellence [called convergent thinking], and the type of observation, reflection and debate [called divergent thinking] which may lead to innovation.
   The book outlines methodologies which can be used to attempt to combine both convergent and divergent approaches within a firm. The book therefore takes one step further than Clayton Christensen's suggestion of setting up a separate entity to pursue a specific `blue sky' set of ideas. However it in no way underplays the seriousness of the threat of new product or new product cycles to the incumbent, successful corporations - indeed some of the examples given in the book as successes (Cisco, Corning) have since gone through major traumas in subsequent product and economic cycles.

   The book seems to take explicit aim at Collin's book `Built to Last', saying that companies which have been longest in the Fortune 500 have underperformed the market - and expands this theme that the market, by having no emotional link to firms, will pick winners and punish the slow remorselessly. From an investors point of view, my interpretation of Foster's guidance would be to periodically pick the top performers in an index and sell those which don't make it to the top, regardless of past position; my interpretation of Collins is that eventually the tried and trusted firms win out.
   I think my money would be on Foster.

   However in terms of management thinking Foster is definitely in the Thomas Kuhn, Giovanni Dosi, Clayton Christensen, Geoffrey Moore tradition of the intense difficulty of managing to be customer focused, operationally excellent and innovative simultaneously.




4. This is an unbelievably well-written delineation of the state of captialistic economy. 'Creative Destruction' refers to the force behind the expanding capitalistic empire. It is a phrase coined by Joseph Schumpter in the 30's. Business leaders of today that get caught in cultural lock-in will fail tomorrow. A business needs to transform and re-evaluate itself against the currents of the constantly changing market, or fall as prey to those that do. Old-time rates of change were much slower and seemed to give credence to pure branding and operations quality over innovation. However a closer look will reveal that these companies averaged only a sixty year lifespan. Modern companies on the S&P 500 are only averaging a ten year lifespan due to the accelerating rates of change. This is an age of discontinuity. There is no longevity to the conservatism of yesterday.
   
   This book explores the ways of creative thinking... how to foster it... and what fear mechanisms destroy it in the upper levels of corporations. It gives ideas on how to evaluate affiliations and acquisitions.
   
   On a humorus note, Enron is cited as an example of success based on this approach. They are quoted 'we hire smart people and pay them more than they think they are worth.' and there are 'no punishments for trying (risking).' Seems like it is always best to be careful who you let guard the cookie jar.
   
   Truly a great read by the highly respected Senior Partner and Director of McKinsey & Co.
   
   Five Super Stars



5. The book starts of reasonably well. Its general themes explaining why large companies tend to behave in ways that make them less effective at responding to change than the market are well described. As the book tries to show examples of companies that did or did not respond well to the forces of change in business they lose their way. Not only do they extol a number of companies seemingly purely because they were founded by friends from McKinsey, they also use Enron as a successful example! Too many of their examples have not done well since the book was published and that undermines their message. The book also lacks concrete advice, though I must confess to skimming towards the end.
   My takeaway? The market as a whole will ALWAYS innovate more effectively than any company so get over it and be prepared for companies to come and go and change constantly. There's not much, if anything, you can do about it.

No comments about A Benchmark Approach to Quantitative Finance (Springer Finance).

5 comments about Practical Business Statistics with Student CD-ROM.

1. It's a very good book because of the way it divulges you into the real world. If you are interested in learning business and business statistics, what better place to learn it than the real world.



2. This is not the best book on the subject. There are many other superior books to this one. I still keep it around as a descent reference on statistics, and occasionally get something out of it.



3. Prof. Siegel's book is a great introductory text for business graduates with little prior exposure to statistics. The text covers many of the basic topics in statistics and ties them nicely to real world cases and problems.
   
   The book starts with a description of the basic constructs of statistics - data sets, distributions, and variability. IT follows with an introduction to probability and covers random variables. The text continues to cover statistical inference, confidence intervals, and hypothesis testing. Finally the book gets to regression and time series analysis and demonstrates several applications of the techniques covered.
   
   The book comes with a CD that contains lecture presentations (very useful), all the data sets in the books (saves you typing), and an excel add-on called StatPad that provides many useful statistical tools.
   
   Overall I think that this text is a good choice for MBA students and business professionals with little background in statistics. It is very user-friendly and is well grounded in business.



4. This book does a great job of teaching you how to do statistical computations using StatPad and MS Excel. But, it is not very good at describing fundamentals. It left students in my MBA program who haven't takin' stats for a long time lost. I understand it is generally used by business schools, particularly MBAs.
   
   One thing this book has over any stats book that I've used is: a friggin' TON of practice questions. It will boggle your mind and, if you do them, you'll know stats like the back of your hand.



5. The book is great and definitely saved money buying used. However, my book is missing the student CD-ROM which I need for class. That was disappointing.

No comments about Applied Quantitative Finance.

1 comments about Business Statistics: First Course.

1. Take a look at www.coventry-collegiate.com. Understanding Business Statistics, the book featured there, is independently published and sells for only $39.95 (new). It is clear, extremely readable and very student-friendly.

2 comments about Candlesticks, Fibonacci, and Chart Pattern Trading Tools: A Synergistic Strategy to Enhance Profits and Reduce Risk (Wiley Trading).

1. This book is a combination of Candlestick, Fibonacci and some basic chart patterns, Three quarters of the books discussed the basic principles and applications of these three tools, only the last chapter show you how to apply these tools together. The explanation of candlestick and chart pattern seem to be too brief, and the fibonacci part overlays a lot with the author's previous book. I would suggest you to buy this author's previous book "The New Fibonacci trader" together with Steve Nison's "Japanese Candlestick Charting Techniques¡¨, and it would be sufficient for you.



2. the first 3 chapters touch very briefly on psychology, fibonacci tools and candlesticks charting as an introduction. it is concise, just about sufficient to give uninformed readers a basic understanding in these topics. for a deeper understanding of these subjects; steve nison's 'japanese candlestick charting' and fischer's 'new fibonacci trader' are excellent. these chapters were easy for me as i had already read those 2 books.

   chapter 4 is what seems to be a pretty useless chapter where the author states statistical tests done on the profitability of each method described in the previous 2 chapters (ie the various candlesticks and fibonacci tools). he would repeat the description of each method and show their profitability tests over certain periods.

   chapter 5 details a very useful method of using fibonacci trading, the PHI-ellipse. however, this chapter only repeats and expand what you'd have read in the previous chapters. note: PHI ellipses was already covered briefly in chapter 2. PHI ellipse is also found in 'new fibonacci trader'.

   chapter 6 teaches you how to combine the various methods discussed. the author would repeat some of the methods as he reintroduce them. an illustration of how repetitive the book is, the chapter is 50 pages long, half of which are graphics and there are summaries after each topic/method; yet there is a further summary to this chapter of 2.5 pages. obviously, the summary is a repetition!

   there would be a last chapter of summary for the entire book...

   a software for using the proprietory PHI-ellipse is provided with this book. i find that i cannot use it so far. but this may be due to my own inadequacies with the computer... or a conflict as the software has some very strict requirements for the charting data.

   a good book with good theories but the author need to organise it better. the end product is disorganised and repetitive. readers could just read 'japanese candlestick charting' and 'new fibonacci trader', apply some common sense to combine these 2 methods and skip this book. the same CD-ROM software for the PHI ellipse come with 'new fibo trader'.

No comments about Statistics for Marketing and Consumer Research.

5 comments about Applied Statistics and the SAS Programming Language.

1. Really good for a start for SAS. You can always turn to it when there is something you do not understand. Thought it is thick.Well, the software is complicated. So enjoy reading it!



2. SAS is a data management and statistical analysis tool that is extremely popular in industry especially in medical device and pharmaceutical companies. SAS manuals are very good at providing users who have some statistical knowledge with guidance toward the use of various porcedures. Statistical texts often provide users of statistical methods with the necessary basic knowledge. However there are few texts that do both. A trend is developing to introduce basic and advanced statistical methods illustrated through the use of statistical software (particularly SAS). This book does a great job of presenting many applied problems and demonstrating the implementation of the analysis in SAS.



3. I am disappointed after reading this book. The coverage on statistics is overly superficial. I would be quite hesitating to call it a book on "applied statistics". It's probably better called "Basic Data Analysis Using SAS".
   
   It's a book for users with no experience of either statistics or SAS. It's clearly written. However, the style is old fashioned (the same is for SAS). In recent years, SAS has shifted its focus on so called "enterprise solutions"; therefore the development on data management, statistics, and econometrics has lagged behind, compared to SPlus/R and other more specialized programs.
   
   Similar to most other SAS books, the authors spent a lot of time talking about SAS programming rather than the subject matters (mostly because SAS syntax is very old and different from most other programming languages). The author also spent a lot of efforts talking about data input assuming users are still living in a stone age and have to deal with punched cards instead of delimited data.



4. My prof uses this book as a required text. I am not familiar with SAS but after reading a couple of chapter, this book is really easy to understand. The authors also make it fun to read! Definitely recommend this book, even for the first SAS user.



5. It's not the newest version, but immensely helpful for basic SAS programming. The vendor was quick and reliable.