5 comments about The Trading Game: Playing by the Numbers to Make Millions.

1. 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).



2. 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.



3. 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.



4. 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.



5. 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.

5 comments about Trading Chaos: Applying Expert Techniques to Maximize Your Profits (A Marketplace Book).

1. 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."




2. 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.




3. 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.



4. 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



5. 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.

4 comments about The Alpha Strategy: The Ultimate Plan of Financial Self-Defense for the Small Investor.

1. The book is divided into two halves. The first teaches the reader about inflation, the money supply and the workings of the Federal Reserve System. The second half encourages the reader to employ a stockpiling strategy. The first half of the book is truly outstanding and is a MUST read for anyone seeking to understand investing. I strongly recommend the first 100 pages to everyone with money on their mind. I found the stockpiling strategy to be less useful.



2. The message of this book (what Pugsley calls "The Alpha Strategy"), put simply, is to avoid holding assets in the form of non-redeemable paper money. The work begins with an explanation of why this is necessary, and then moves on to accomplishing it.
   
   First, Pugsley explains basic economics, starting with the premise that individuals work in order to improve their standard of living. With clear examples, he explains the danger of inflation (calling it "the most deadly of economic evils") and the roles that fractional-reserve banking and the Federal Reserve play in our economy.
   
   Pugsley also argues that all government intervention into the economy causes capital to be misallocated and productivity to drop. He condemns all of it--anti-trust laws, professional licenses, subsidies, minimum wage laws, tariffs, and labor laws--but doesn't blame the government. He points out that such laws are passed because small groups of vocal constituents act in their own short-term best interest and lobby for government intervention to protect themselves from competition in the free market. The result, according to Pugsley, is that everyone else is "plundered," because they are forced by the government to pay higher prices than they otherwise would.
   
   Arguing that conventional methods of storing wealth (stocks, bonds, etc.) simply result in more losses due to taxes, inflation, and speculation, Pugsley moves on to the subject of protecting oneself from the forces that diminish wealth. He recommends that you move your paper money into four categories of products, in the following order: education, tools, consumable products, and raw materials.
   
   Pugsley briefly touches on education, arguing that a career makes one more productive and therefore wealthier in the long run. The tools required for that trade are also essential, and thus should be purchased. Much of the rest of the book is spent on discussing the best consumer products to store for long-term inflation protection, with recommendations that you store multiple year supplies of items you regularly use that have long shelf lives. Finally, for those with paper money still remaining, he recommends purchasing raw materials, such as industrial metals, as an inflation hedge.
   
   Overall, this is an excellent work, with exceptionally clear explanations of economic principles. The talk about stockpiling at the end is also helpful for those new to the concept, but I'm concerned that he overestimates its value by not fully accounting for the cost of storage space. Well worth reading by anyone interested in long-term investing, even given the fact that it was published over 25 years ago.



3. Part I of this book should be required reading to graduate high school. If everyone read and understood this, the world would be much more prosperous and we would all lead richer and fuller lives. Part I is a primer on the economy, the history of money, the federal reserve, and how our government reaches deeper and deeper into our pockets with every passing year.
   
   The remainder of the book goes into what we can do about it - how we can hope to hold on to what we have worked so hard to accumulate. This part is interesting, informative and useful. But Part I is an outstanding education on the way money works, or should work, and how inflation serves to devalue money at the hands of the federal government we elect and trust (to our financial demise). It also reveals how traditional assets (stocks bonds, etc) fail to preserve value over any extended period of time.
   
   The "Alpha" strategy is the "first" line of defense we have against the hand of big brother. The logical extreme of this strategy would be to buy everything we need to live on for the rest of our lives in today's dollars and stockpile it all. Since not everything has a sufficient shelf life, the book offers the best compromise. This strategy may seem possibly a bit extreme but it is interesting and thought provoking none-the-less. Still, the idea is to try to stockpile the things of value, the tangible assets, in order to best preserve against the ravages of inflation resulting from the blatant and unbridled printing of money by the federal government. A must read.



4. The first half or so is a very fascinating instruction on how our money system works. It was very interesting learning what actually causes inflation, and what inflation actually is. It's not a good thing, but not exactly the boogieman I thought of when I was a child and people talked about it. Very good.
   
   The second half of the book is a very clear product of the time this was written, and seems bizarre and impractical. The basic message: hoard everything you can. When inflation was in the double digits as at the time, this probably seemed to make sense, but he goes as far as recommending buying a second card and putting it up on blocks, because you'll need a new one in five years. All to avoid inflation.
   
   Well, as it turned out, inflation was killed by the Fed soon after this book was released, so that advice would have been pretty bad.

3 comments about Using Technical Analysis: A Step-by-Step Guide to Understanding and Applying Stock Market Charting Techniques, Revised Edition.

1. I really like this book as it covers the basics and has examples where you have to use what you've learned to do the exercises. The reading is pretty dry but I still refer back to the book often when I'm trying to remember what a "double bottom" means or what an "ascending triangle" helps you predict.



2. This is a practical book about Technical Analysis written by an investor with over 30 years of experience who has "been there and done it". The book has a section with exercises. If I had a complaint, it would be that the patterns shown in the example charts are too clear; things are not that crystal clear in real life. Anyone who reads this book should also read "Trading The Plan" by Robert Deel. Both are very practical.



3. If you have never read a technical analysis book then I highly recommend this above everything else. For startes it's barely over 200 pages short, with more than half those pages dedicated to charts. Simply put you only read about 100 pages.

   The beauty is those 100 pages are powerful and geared perfectly for the beginner. After reading this book I was bitting at the bit to apply my new knowledge, and no longer regard picking stocks as a crap-shoot.

   You CAN educate yourself to financial freedom, and this book will help you do that.

4 comments about Seminars: The Emotional Dynamic~Advanced Presentation Skills for Financial Professionals.

1. This book is an easy read, with instant user friendly ideas. It has changed the way I do business. If you are looking to increase your exposer in the financial industry read this book.



2. and present in financial services, I recommend this book. I also recommend seeing Frank deliver the presentation that supports the book. He is quite a show!



3. I met Frank Maselli two years ago when I began working for a large financial services company. The guy is a human dynamo, stand up comedian and motivational speaker.

   His book is the only guide I use to help me carry out seminars from concept to completion. I presented 12 seminars last year and had great success with his ideas. I highly recommend this book to anyone in sales, marketing or other people intnse occupations.




4. The book is good. It will give you many ideas for a soup to nuts event. However the book is free (provided you are a financial advisor) if you contact the firm that he works for, CDC IXIS advisors.

5 comments about Trading With The Odds: Using the Power of Statistics to Profit in the futures Market.

1. It is amazing how we humans all have our own agendas. Someone founf this book 'useless', some found it exciting...that's all fair...I found it revolutionary (read the post before this one). One fellow bloats his ego and describes how he is a great technician. I'd like to see how his finances compare to Cynthia Kase; as a trader. The proof is in the pudding....
   
   This is a revolutionary book and there are very few out there!
   
   (however, I noticed esignal's add for Kase Statware states 95% successful is predicting market turns...rubbish!)
   
   Still that's a differnet subject, isn't it!



2. 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.



3. 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



4. 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



5. 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

5 comments about Modern Investment Management: An Equilibrium Approach.

1. My highest commendations to the asset management team at Goldman Sachs. They have come together and created a highly comprehensive tome that covers all the bases within the realm of modern investment theory. Their solid equilibrium approach is applied to all areas, from traditional investments to alternative asset classes, from institutional funds to private wealth, using analysis and real world applications. Incredibly thorough, extremely recommended.



2. Nicely written from a journalistic perspective but rather old fashioned. Many mistakes and deliberate false claims in order to suit product interests of Goldman Sachs. Examples:

   In the chapter on asset liability management there is always an analytical case for equities. However the only reason is that GS does not allow duration as a choice variable. Otherwise beta (in their formula) would become one and the optimal equity allocation is zero. Accidental? I doubt it.

   They also claim to have found (earlier) a better method than Stambaugh on dealing with missing data. However either you publish or you shut up.

   Waste of time for serious quants




3. The boys at GSAM clearly wrote this book as an "alternative" to Grinold and Kahn and to help promote the group as the seek to raise assets.
   
   Grinold and Kahn work at Barclays Global Investors, GSAM's biggest competitor, and they wrote a first-rate book on how to do quantitative management. Their book has become the standard, the must read, and is required by the CFA exam. This obviously bugged them to no end. It's no fun to see your biggest competitor getting tons of accolades. So they did what anyone with a big ego does: they wrote their own book, this book.
   
   Only problem is this book STINKS. What's the matter with it you ask? It has no content. The boys at GSAM were so scared about divigulging anything that could help a competitor (or the market) that they didn't really want to SAY anything.
   
   Now how do you not say anything but still write a book, you ask? Excellent question! The answer is you talk in infuriatingly broad generalities about very general topics.
   
   For example, on the topic of how do you actually trade the portfolio, they come up with such gems of wisdom as:
   
   "Tradomg is the process of executing the orders derived in the portfolio constrution step. To trade a list of stocks efficiently, investors must balance opportunity costs and execution price against market impact costs." [page 431]
   
   This knowledge anyone who has ever thought for 2 seconds about trading knows. The real value might come if they gave you some cool way to think about measuring opportunity costs, ex-ante. Or a nice way of estimating market impact costs. Do they do either? Of course not! Just more and more banal talk.
   
   The book is filled with millions of other examples. One should use a decay weight in estimating covariance matrices. How should we choose that decay weight is of course never mentioned or discussed!
   
   They tell us when choosing between factors to predict returns, "the real challenge is to winnow down the list of factors to a parsimonious set." Okay, how might I do that you GSAM gods? They never ever tell you [see page 420]
   
   You get the point, just lots of blather and really no content.
   
   Save your money and don't buy this book. They don't need your money they have enough already. And it's not like you are getting knowledge or anything valuable in return.



4. A couple of chps from here are reqd reading for the CFA Level III exam (last exam for CFA charter). I was expecting something MUCH better from GSAM who fancy themselves as the best on the street.
   
   Thankfully, CFAI provided us with the chps and we did not have to purchase the book. Save your money and buy Grinold instead.



5. I am quite shocked by all of the poor reviews below. This text is actually very good, in that it address several topics that Grinold and Kahn do not, mainly utility theory (and its role in investor decision making), the international CAPM, and the Black-Litterman model. First, the presentation of the investment decision making process by Litterman from an economics (utility maximization) view point is right on target. Too often portfolio theory is simply presented in a pure mathematical finance format that, while teaching the mechanics, leaves the end user incapable of understanding the implications of the analysis they are performing. Additionally, Litterman's presentation of the international CAPM and universal hedge models are very well done and extremely important. Finally, the Black-Litterman model has become mainstream (it is incorporated into the Ibbotson software) and is completely ignored by Grinold!
   
   I own both Litterman and Grinold, and if you can afford both I would buy both because Grinold does a nice job simply presenting the mathematics, but then so do so many other texts.

5 comments about Deflation: Why it's coming, whether it's good or bad, and how it will affect your investments, business, and personal affairs.

1. Quick, compelling arguments to change the way you think about the economy and the future. Well written and easy to understand, and fairly light reading for economics. "Must read" for investors, those approaching retirement, etc. Especially important for those with a lot of debt, or thinking about doing a lot of borrowing. Not a 'doomsday' piece, but very thought-provoking as to understanding new ways to win in investing.



2. This book will help you make sense out of the headlines you have been seeing everyday in the business section of your paper. It will help you "connect the dots" about megatrends you maybe were aware of, but not taking into account with your investment decisions. I read this back in August 1998, and it is amazing how current events seem to be playing out almost exactly as forecasted in the book. You should not miss the chance to read this.



3. Shilling predicts good - rather than bad deflation (at least for the USA): i.e. surging demand absorbing excess supply because of price falls. It is a US-centric view - weaker on the international side. Deflation addresses an important & neglected subject. The slow start is tolerable because of good, up-to-date graphs and data generally. Happily he is consultant-clear rather than economist-arcane. His analysis of the US economy is compelling & useful for foreign readers. Nonetheless, there are questions: will policymakers (including central bankers) not adjust; e.g. I understand that defense spending has started rising again. Shilling's review of factors such as the internet is useful. The foreign material is poorer - though his Asian chapters are good. Bizarrely for such a serious & scholarly work, there is no index.

   Shilling is worth reading - he thinks the west will experience `good' rather than `bad' deflation - but how deep will the Deflation be and how long will it last? He could have usefully studied natural resources in more depth; after all, this is where deflation hit hardest and earliest. I will read him again.




4. I found this easy-to-read book very profound in its analysis of the inflation-disinflation-deflation pattern that we are witnessing today.

   The book is filled with charts that highlight the author's message. The last several chapters on investment, business, and personal strategies are priceless.

   No weasel words in this book. Lots of forecasts.

   John D.




5. A careful look at the book shows that Shilling's THEORY for deflation is based on the longwaves of Kondratieff. Shilling uses a real (as in real business cycle literature) rather than a monetary interpretation (a la Milton Friedman, Irving Fisher..) of longwaves which results in his use of 1974 (following the oil shock) rather than 1980 (following the tight monetary policies by central banks under the guise of Monetarist doctrine) as the beginning of the current wave down.

5 comments about Maestro : Greenspan's Fed and the American Boom.

1. Among collegiate literature which I have been exposed to, I have found Bob Woodward's Maestro to be one of the most informative and educational. With this simple and easy to understand narrative, I have been taken inside the doors of the Federal Reserve, and have been given a picture of how the FOMC truly operates. I feel more equipped to discuss and express opinion towards the operations of the Fed. Upon the completion of this book, I sat back with a sense of gratification, in my newly acquired, practical understanding of the U.S. economy. Woodward was able to portray Monetary Policy in a sense that really applied to my level of thinking.
   With an inside look at the decisions of Alan Greenspan and his role as chairman of the Federal Reserve, I was stuck with a sense of amazement watching this man operate mathematically and politically, still maintaining a sense of pure awareness and concern for the long-term affects of his resolutions. I would definitely recommend this book to any reader in search of a practical and realistic understanding of the economic engine which drives the U.S.



2. The coziness of our nations politically elite always makes for interesting reading. While there are some interesting tidbits throughout, i.e. Alan Greenspans association with Ayn Rand; the familiar names of the politically entrenched and the precarious state of our nation's economic machinations, this book was a bit boring. With that said, there were two things I found fascinating about D.C. life. First, there is an extremely strong current of Ivy League uber-ambition in our nation's capital; along with an extraordinary confluence of academic uber-achievement (PhD's lawyers & double majored PhD's). Second, I didn't know Alan Greenspan, along with his longtime and classy arm-charm Andrea Mitchell, were such savvy political operatives on the so called D.C. cocktail circuit or what a critical role socializing played in the running of our country. Other than that, I was a bit disappointed with this effort.



3. After reading this book I realized how fascinating a book can be when it is written by a washington insider like Woodword. Amazing book describes Greenspan, Fed, Whitehouse and the economics and politics behind it in the most lucid manner possible.
   
   Very true in nature expresses very candidly Chairman Greenspan's political manuevering and how Whitehouse makes a non political instituion political.
   
   Excellent and much more interesting to read compared to Mr. Greenspans own auto biography which in itself is a very good book.



4. ~Maestro: Greenspan's Fed and the American Boom~ is a rosy bit of economic subterfuge heralding Greenspan as an economic saviour when in reality we're paying the price for the Federal Reserve's inflationary scheme throughout the 1990s. If the markets set interest rates, we wouldn't see the vicious cycles of boom and bust, the subprime mortgage crisis, and the housing bubble. But such subversion is always attendant to fractional-reserve banking. A wiser more honest Alan Greespan wrote an essay entitled 'Gold and Freedom' in the 1960s. Therein, he observed: "In the absence of the gold standard, there is no way to protect savings from confiscation through inflation... The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves. This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard." Greenspan intuitively knew this was still true when Rep. Ron Paul of Texas grilled him in hearings before the House Banking Committee.
   
   People can mock the alarmists and goldbugs, but the U.S. Dollar is poised to fall over a precipice of hyperinflation in the twenty-first century. For years, it has enjoyed prestige as the reserve currency of central banks and reserve currency for OPEC exchange, but it is steadily starting to unravel. Too much public sector indebtedness, a 10-trillion dollar debt, trillions in unfunded federal liabilities, and an aging workforce will all point to American economic decline. In the 1990s, almost 65-70% of U.S. Dollars in existence were in circulation abroad. There is no telling how much it is today. The results will be catastrophic if a shockwave hits, and those Dollars come back home in mass. It doesn't necessarily entail a 1929 crash, but it will likely result in economic stagnation where inflation surpasses real economic growth and/or near-double-digit unemployment.
   
   There is nothing special about Greenspan. He had wisdom to get out and find a fall guy in the new Federal Reserve Chief Ben Bernanke. Bernanke will take the hit for his mistakes. Bernanke is afraid to do any needed correction, or surgery in the form of tightening monetary policy, and will continue to prime-pump the economy and foment an inflationary shockwave and economic stagnation. The cure for inflationary woes is always more inflation. It's a melancholy fate, and the market correction will be devastating. His career will be short-lived and he will be the scapegoat. John Keynes, hardly a model economist, was prescient nonetheless when he observed: "By a continuous process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method, they not only confiscate, but they confiscate arbitrarily; and while the process impoverishes many, it actually enriches some....The process engages all of the hidden forces of economic law on the side of destruction, and does it in a manner that not one man in a million can diagnose."
   
   "The central bank is an institution of the most deadly hostility existing against the Principles and form of our Constitution. I am an Enemy to all banks discounting bills or notes for anything but Coin. If the American People allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the People of all their Property until their Children will wake up homeless on the continent their Fathers conquered."
   --Thomas Jefferson



5. I think that this book is very useful in the time we are living now. It show how the economy, especially the north american, but also the rest of the worl works. How the lack of responsability of what you offers to the market can destroy the market itself, and that, somehow must be supervise by some kind of goberment. anyway very interesting book.The General Theory of Employment, Interest and Money

5 comments about Portfolio Selection: Efficient Diversification of Investments.

1. This is a reprint of the text that first considered risk along with return in portfolio management! Nobel-prize winner Harry Markowitz explains the theory upon which modern portfolio theory is based in minimal mathematical terms. Of course there has been much subsequent academic research in portfolio theory (much of which is contained in an included bibliography up to 1970), but this book is an outstanding starting point for anyone interested in the efficient management of financial portfolios



2. While Markowitz is a name well-known in economics (joint winner of the Nobel Proze in 1990) and the investment industry, it is known hardly at all among the public. Perhaps this is the inevitable fate of a man well ahead of his time: Markowitz's work on the relationship of risk and return is truly one of the staggering intellectual achievements of modern economics, and has a great practical impact on people's economic welfare. This volume recapitulates his argument that risk is what drives return, rather than being (as was thought by earlier generations of money managers) merely an unfortunate by-product of the search for higher returns, that the portfolio dominates its constituent assets, and that the way to minimise risk for a given level of expected return is to minimise the covariance of returns of the assets within that portfolio using a quadratic programming algorithm. This is brilliant, seminal stuff, written with a liveliness usually lacking in economic texts.



3. Almost 50 years after its first printing there is not a single word that should be changed. As some of Markowitz' important original insights have been ignored or overlooked by many of his successors, this is still a must-read for anybody truly interested in portfolio theory.



4. Although an old work, it established the basis of modern portfolio selection theory. Foundations are mandatory for those who want to get a grasp on the matter and helps better undestand modern theory. First half of the book is a ride, second half is a harder time.



5. Clear mathematics goes all the way from statistics, probabilistics, to #D geometry and Simplex mthod. all applied to the one financial problem:how to select teh adequate portfolio.