5 comments about Making Dollars With Pennies: How The Small Investor Can Beat The Wizards On Wall Street, Second Edition.

1. This is possibly the worst written book that I could conceive of giving four stars. The reason I am rating "Making Dollars with Pennies" so highly is due to its content and because Max Bowser, who has been publishing his "Bowser Report" for over 25 years, is the real deal. Actually, the book is a quick and easy read, with a folksy demeanor. No high finance here. The book may be most helpful for people who have already been in the market for a little while (and perhaps been burned). The book is weak as a work of literature due to its poor organization and repetitiveness (stressing diversification among 12 to 18 stocks several times).

   I believe that to succeed as an active investor in today's market, you need some kind of an "edge" or a niche. One way to obtain that is to focus on stocks trading under $3 per share, as Max does. Let the book serve as your trail guide into the jungle of smaller stocks. While Max rails against the studious ignorance among institutions of these supposedly risky shares, in practice he is quite careful about what he does. Although the selection of new issues is somewhat shrouded in mystery (with Bowser encouraging readers to subscribe to his monthly report in order to get new picks) he gives sufficient detail of his "Bowser Rating" system to uncover his thought process. Two significant ways Bowser reduces risk of investing among smaller stocks is by having a bias towards companies with strong balance sheets and a consistent record of past earnings - no development-stage, long shot concept stocks here.

   One important caveat to keep in mind about Bowser's system is that it was honed during the mid-to-late 70s, when treading water was often difficult. To the extent that his methodology or conclusions have become stale or outdated, it may trace to ideas he tested at that time. Personally, I find the vintage comforting as our 2000-2010 market may possibly have more in common with the 70s than the 80s or 90s bull runs. Also please note that some of his suggestions, particularly for the mechanics of setting up and monitoring a portfolio, appear to have been made obsolete by the internet.

   Aside from diversification, Bowser's possibly most important other safeguard is a formula for selling. First of all, whenever a stock's "Bowser Rating" falls below 8, the stock is sold, forcing an investor to sell companies with deteriorating fundamentals. Secondly, whenever a stock doubles, an investor is encouraged to sell half of his or her position, recouping cost. The remainder of a rising position is then held until it declines 25% from its most recent high.

   How have Bowser's picks (from over 25 years of newsletters) done over time? As he says towards the end of the book [p. 157], 47% of the companies are still in business, 26% have been bought out and 27% are bankrupt. Over their holding periods, more recommended stocks have declined than have advanced. However, absent audited statistics, it appears that tiny minorities of winning stocks have more than made up for the losers. These big winners are mentioned in an "honor roll", and include firms such as Semtech, Smithfield Foods and Alpha Systems. The great hope of the investor in small stocks is not that the average pick will do well, but that a small number of them will be big winners - which is why diversification is so important.

   "Making Dollars with Pennies" is only a beginning. It is no substitute for doing more work on your own.




2. I have read several investment guidance books where the only guidance offered is to buy the authors newsletter/consulting/mutual fund/etc. "Making Dollars with Pennies" at least explains the methodology of how the "Bowser Report" picks stocks before recommending that instead of spending your free time analyzing stocks you pay Max Bowser to do it for you.
   
   The "Bowser" system is simple enought to understand and follow, with a list of "buy" indicators that can be learned from any financial page, and most refreshingly a system for when to sell. Although I have my reservations about whether the mechanical application of this system will make money, I have to give Mr. Bowser credit for explaining his system. If nothing else, it is a basis for further esploration.



3. R. Max Bowser's 1st book, Making Dollars with Pennies, is a great book for those individuals looking for a manual to introduce them to the stock market, its inner workings, and those vital parties involved in it. The terms of the stock market are clearly defined and the down-to-earth writing makes the reader feel like the author is speaking directly to the reader. The author very quickly develops a rapport with the reader. There is a certain humor written into every sentence as Mr. Bowser pokes a little fun at himself and occasionally at fellow investors that have in some way fouled themselves in the stock market game.
   
   The main purpose of Making Dollars with Pennies is to introduce the reader to the program he uses to determine which stocks to purchase and when to sell. Some points that are very precisely followed are: Why an investor would be interested in "ministocks"; What the Bowser Game Plan is; Its evolution; and even how the Bowser Ratings are determined.
   
   Mr. Bowser does a very good job in showing the reader exactly why he/she should consider "ministocks", even taking into account the relative volatile nature of the minipriced stocks. The author succeeds in convincing the reader that if he is patient, has a versatile portfolio, and follows Mr. Bowser's suggestions as to which stocks to buy, that the reader will do fairly well. Mr. Bowser backs up his statements by showing the reader a piece of his past in which he was not so successful in the stock market and how he learned how the stock market works. He explains how these findings of how the stock market works were developed into The Bowser Game Plan. He also explains in depth the mysterious Rating System and what it entails, raising the veil on how Mr. Bowser finds these little moneymakers.
   
   As for the book, its layout and other mechanical factors of the book, I found the large print very easy on the eyes, making it a pleasant to read. The catchy titles of the chapters and subchapters encourage the reader to continue on with the next chapter. Plenty of charts help explain anything the reader may not understand. Perhaps the only thing that might be considered slightly off is that there doesn't seem to be any real order in which the chapters are presented. The first half of the book is devoted to explaining the stock market basics and the value of "ministocks" and the second half of the book is devoted to the explaining the Bowser Game Plan and how it is used. Otherwise, there really isn't any method to the chapters. However, it doesn't affect the readability and enjoyment of the book. It's kind of a go-with-the-flow type of reading.
   
   All in all, R. Max Bowser's Making Dollars with Pennies is a greatly useful and enjoyable book that should be read by anyone considering entering the stock market. Mr. Bowser is very knowledgeable in the ways of the stock market and is obviously very willing to help those who are willing to learn and succeed in it. He very clearly demonstrates how his program works and how it should be used to make it work, and he does it in a charming and humorous way, making it easy for the reader to continue in what can be a very boring subject. This reader found the book very useful and enjoyable. A definite must-read for those entering into or interested in the stock market.



4. In a first sight, it's like a sales letter, trying to push you to buy Bowsers newsletter. But after all, the Bowsers rating system based on FA is revealed and it's not so bad. So, in this case you need decide - will you pay for several pages "meat". If yes, OK.
   But all other book of course is impolite sales letter



5. This is an okey book that I would not put much faith into. Tells other points of view, but nothing I would 100% follow

2 comments about Bernard M. Baruch: The Adventures of a Wall Street Legend (Trailblazers, Rediscovering the Pioneers of Business).

1. The story is fascinating and you can't help but like Baruch despite his ego. Grant does a nice job although more because he was truly interested in the man rather than because he's a great biographer.



2. James Grant does a fair job. Baruch does come across as a likeable personality. The author perhaps could have been a little more critical in his analysis and also focussed on Baruch's private life and public years after 1945 a bit more.

5 comments about Wall Street & the Rise of Hitler.

1. This book came out in 1976 and was dismissed. By the 1990's all mainstream history accepts the charge that US bankers backed Hitler. When in 2003, Kevin Philips wrote his book on Dynasty and the Bush family, it was considered "old hat" When William Guy Carr made the same charge in the 1950's, it was also dismissed.
   
   This is the book that started it all, because Sutton was a first rate scholar. BUT if you read ONLY this book, you will miss the whole story. Sutton wrote a book about Wall Street Banker backing Trotsky Et. Al. It got him drummed out of his job. But like this book, its all true and proven. His other books on the Fed help to fill in the picture of how the Bankers and men of Finanace work.
   
   Other books to complete the picture:
   Tragedy & Hope: A History of the World in Our Time by Carroll Quigley
   Creature from Jekyll Island by G. Edward Griffin



2. This is an interesting part of the puzzle as far as the rise of fascism around the world. In the late 1920s and 1930s, powerful business interests in the U.S. became fascinating with the European tendency toward fascism. As you can read in the book THE PLOT TO SEIZE THE WHITE HOUSE, they saw FDR as heading toward socialism and linked up with extremist and rascist organizations to try to make certain that the government didn't interfere with business. Though that particular plot failed, it gives an inside look at what the stakes were and what the power elite were willing to do to win.



3. This book is quite literally a tell all of all the names of who financed Adolph Hitler's rise to power by financial means. The man didn't get into power just by his lies, but by lies of other men too, the men with power, with money, and influence, and the access to Wall Street. You would be surprised to see the names within this book that financed "the funny little man, with the funny little mustache" that almost took over the entire world.
   
   I will not ruin the book for you by telling all the names in it, but I will tell you two men's name I know you will instantly recognize.
   
   Henry Ford & Edsel Ford. Yes, those "Ford's", from Ford Motor Company. Henry Ford even got the highest award the Nazi's could give to a foreigner, in recognition of his assistance to Adolph Hitler, and his picture hung in Hitler's office.
   
   Just so you know, I am not a fan of the Nazi's, nor am I a racist of any kind, nor a fan of Adolph Hitler. I'm following a papertrail to find out all the names of who helped the man get into power to begin with, because I am someone who knows there's more to history than what they teach you in school. It doesn't just come down to the lies a politician tells the people who put them in office, but to the power-brokers who finance the man. Adolph Hitler was a politician, plain and simple. He knew how to lie to the people and give them comfort through manipulative persuasion and then when the people willingly gave him the power he went for the throat of the world.
   
   Another good book that tells the details of who assisted Hitler that you may be able to find here on Amazon is, "IBM and the Holocaust."
   
   Yes, I am talking about that "IBM" here too. They helped Hitler track down the Jews and other "undesirables" (Hitler's words, not Mine) through the use of the census and the Hollerith Card Sorting Machine.



4. When I served in the ccupation of Germany in the early fifties, I wondered why the massive building housing The V Corps of the US Army was such a prominent feature of Frankfurt. I soon discovered it to be the former I G Farben headquarters, apparently untouched by our bombing while all around, there was still the debris of war. The only other building in that plot of land was the US Army military chapel. Why also were there ESSO stations everywhere? So much for our close relationship with our former enemy. This book demonstrates the American-Third Reich commercial hookups.



5. sutton's book on wall street and the rise of hitler is very informative. sutton has written several books on conspiracy topics. this text offered several pieces of evidence, but, for the most part, much of it was not sufficiently supported with evidence. i bought it, in part, because i'd read elsewhere of ties between hitler and the president's grandfathers and dulles. i read nothing of the ties with the grandfathers and only one mention that dulles had visited hitler, but date, location, and discussion topic or transfer of payment was not indicated. i hoped that this book would have shed more light on the financial support of hitler during his rise to power and, in particular, the support of american capitalists. overall, i found that this was a very fine book, worthy of the purchase, used.

5 comments about Capital Ideas: The Improbable Origins of Modern Wall Street.

1. I have recommended this and his previous book for finance graduate students at the University of Maryland.



2. In the early 1950s, graduate student Harry Markowitz presented his Ph.D. dissertation to the University of Chicago economics department. The response was less than encouraging. "This isn't a dissertation in economics," Milton Friedman told Markowitz. "It's not math, it's not economics, it's not even business administration." Whatever it was, Markowitz's heterodox theory of portfolio selection changed finance forever and earned a Nobel Prize. Financial historian and investment manager Peter L. Bernstein humanizes his saga of great shifts in financial theory by organizing it around eminent thinkers (Markowitz, Myron Scholes, Franco Modigliani, Robert Merton, Bill Sharpe and others, if you ever want to look up a finance guru). Deepening his analysis with insights from "behavioral finance," Bernstein describes how these innovators generated and extended the now-orthodox "capital ideas" of portfolio selection, capital structure, the Capital Asset Pricing Model, the efficient market hypothesis and the Black-Scholes-Merton theory of option pricing. Bernstein's erudition is dazzling, his explanations pellucid and his narrative filled with scintillating characters. getAbstract doesn't need to hedge: you'll find this overview of current finance theory and practice brilliant, even if you don't know your alpha from alfalfa.



3. Maybe this is a great intro to classic theory, but then there is something wrong with classical thinking.
   
   My one-star rating is for his "forgiveness" of the Long Term Capital Management gang, since no one could have predicted what actually happened.
   
   LTCM managers (inducing Merton and Sholes, subjects of chapters) had excessive confidence in models based on theories that have not been even come close to being validated.
   
   It is ironic that Amazon pairs this book with "The Black Swan" in their "Buy Two" promotion since Bernstein has clearly been "fooled by randomness".



4. This was not an easy read, but it was worth it. I received my MBA in 1976. Much of this book was an explanation of the effects of the Capital Asset Pricing Model (CAPM) on current investment practices. He assumes that the reader is well versed with the intricacies of CAPM. I had to go back to other sources to review CAPM, but once I did, the book was a great explanation of how CAPM and other academic innovations have had a practical effect on portfolio management. When I finished the book, I had to admit that I was not able to apply much to my personal portfolio management, but I have a much better understanding of what my pension plan administrator is thinking about as well as what certain mutual funds managers are doing. The book is more beneficial for the professional investor than the individual investor.



5. I have a lot of respect for finance professors. To quote a felicitous expression, they perform "mathematics in flesh and blood". They are the surgeons of the modern economy, cutting through inefficiencies and making sure the blood of capital flows into the arteries of corporate accounts or personal savings. And like surgeons, society gratifies them with generous pay and social prestige: the time is over when finance specialists were snubbed by their economist colleagues and kept on the margins of the discipline. Some may even get a Nobel prize in economics, while many may complement their academic salary with management consulting or hands-on investment.
   
   All these pursuits are perfectly legitimate, and finance professors are usually nice individuals endowed with a sharp mind. But Bernstein overemphasizes their worth and gets way too far in praising their accomplishments. The chronicler turns into a sycophant when he writes that "the vigor, the freshness, and the extraordinary clarity of Samuelson's mind would be stunning to encounter in a man of any age". Or that Robert Shiller's "ingenious and restless mind seems never to come to sleep".
   
   But leaving excessive praise aside, the book makes several strong claims that I found worth considering. The first is that the era of financial theory is over. Finance as an academic discipline is based on theories--the Capital Ideas of the title, described in the prequel volume-- that were developed from 1954 to 1972, starting from Markowitz's essay on portfolio selection ("Markowitz came along, and there was light"). The consequence is that most finance academics have now left theory behind, either to launch attacks on neoclassical assumptions based on behavioral observations, or to adopt an institutional perspective on how markets work in order to design better rules and instruments for managing risk. Others have left academia altogether and have moved to the dark side of portfolio investing, where they have created structures surprisingly close to the university setting: "we conduct research; we discuss it and improve it; and we build models and empirically test them. And in some sense we publish them and verify them when we test them in the market", says Myron Scholes, a Nobel prize laureate turned investor.
   
   The concentration of discoveries in a short time span and among a small group of innovators is by no means unique in the history of science. But past experience also shows us that well-established paradigms can be radically challenged and overcome by new ideas coming from the fringe of the discipline that put past theories into oblivion. Nothing stands still. The Capital Ideas are nor written in stone. And a new theory of finance may very well emerge that will match Markowitz's approach to portfolio selection, Modigliani and Miller's insights into corporate finance, the Efficient Market Hypothesis, the Capital Asset Pricing Model, and options pricing theory.
   
   The second claim made by the author is that the Capital Ideas are not vulnerable to empirical challenge. Behavioral Finance has pointed out many situations in which the axioms of neoclassical theory do not apply, but as Andrew Lo notes, these findings are only "a collection of anomalies, not a real theory. You need a theory to beat a theory". The same applies to statistical tests, which have repeatedly failed to confirm the validity of theoretical models. For Fisher Black, another Nobel prize laureate, you should put your trust only in logic and theory, and forget about statistical empirical results.
   
   But aren't the financial models designed by theorists repeatedly proven wrong by market crashes and financial crisis, at the cost of staggering financial loss and dire economic consequences? What worth is a theory that fails to foresee those crises, or worse seems to contribute to their occurence through unfettered innovation and mismanagement of risk? Bernstein responds that the creators of modern finance were not taken by surprise by difficulties in the implementation of their models. The academics knew as well as anyone that the real world was different from what they were defining, and that the models were an approximation to reality and a guide to strategy rather than a precise replication of the world. Perhaps, but the technicians of finance went way beyond their academic masters and really believed in their models, without the necessary dose of skepticism that only a familiarity with academic research can cultivate.
   
   The third idea that I would like to comment upon is what social scientists call the performativity of economics: the idea that reality looks increasingly like the theory, that "powerful forces are constantly at work in the markets to bring the resemblance between theory and reality closer with the passage of time." The real world itself is on a path toward an increasing resemblance to the theoretical world described in Capital Ideas. Even research that focusses on the distance between theory and reality actually contribute to the convergence between the two. Behavioral Finance, Bernstein notes, is by nature self-disfulfilling, and it has become the driving force toward the Efficient Market Hypothesis that it so vigorously attacks. The CAPM may be outdated as a theoretical model, but its influence has never been so great, as it has been transformed into a powerful real-world tool for managing money and for calibrating investors' performance. Theory creates a world of our own making.
   
   But here we should stop and ask ourselves whether we really want a world shaped by financial theory. A world that has gone quant is a world unintelligible to most mortals, a world without moral compass and where things regularly get out of control. Bernstein was right in pointing toward the world-making quality of financial theory; but he fails to consider the moral and political implications of this basic intuition.

2 comments about Investing by the Stars.

1. Henry Weingarten's Investing By The Stars: Using Astrology In The Financial Markets show how to use astrology to make better investing and market trading decisions; how to buy and sell stocks based on astrological positions; how to utilize astrology to predict market timing, market psychology, and market-affecting geopolitical events; and how to integrate astrology into conventional market analysis. Investing By The Stars is a unique and recommended complement to metaphysical, astrological, and financial investment strategy reference collections.



2. In this book one can learn the importance of timing in making financial and business decisions. It is written by an accomplished astrologer who established his reputation by predicting in 1988 the crash of the Tokyo Stock Exchange. He did this by erecting a horoscope for the birth of the country of Japan and that of the Tokyo Stock Exchange. Mr. Weingarten has also included in his book articles written by other astrologers who impress us with similar forecast abilities.
   
   INVESTING BY THE STARS is written for the professional astrologer who has some basic knowledge of financial matters. The author stresses also the importance of understanding the investor's natal chart and accessing his "comfort level" as part of the counseling process.
   
   The principles in this book make for impressing reading. I would highly recommend it to the advanced astrologer who would like to achieve success in investment counseling.

5 comments about Wall Street Diet, The: The Surprisingly Simple Weight Loss Plan for Hardworking People Who Don't Have Time to Diet.

1. I had dinner last night with a friend who is a partner in a major Washington, DC, consulting firm. She said that every day her diet plans are undermined by business lunches and buffets. Once sabotaged, she surrenders the day. I told her about The Wall Street Diet - in fact, I am buying her a copy of Heather Bauer's book - because it is as if it were written for her personally - and for me - and for anyone whose life is fast, furious, and filled with temptations.
   
   The Wall Street Diet guides professional people to think strategically about their eating and health, as they do about most other facets of their lives. And it provides the tools to do so without awkward excuses and obsessive focus. Bauer's prescription takes social and professional settings into account, allows its followers to drink wine or other beverages, includes cereals and yogurt and foods that would be prohibited on low-carb diets, and provides an amazing breadth of information about food choices in particular settings, like specific airports and restaurants.
   
   I have lost ten pounds, and hope to lose more; but the beauty of the Wall Street Diet is that I have no sense of deprivation or boredom. I can do this indefinitely.



2. Heather Bauer's Wall Street Diet is the first thing that's really worked for me, and I've tried them all....I lost 25 pounds in 10 months. I am a 'slow loser' and Heather kept me focused and directed, constantly encouraging me with information about how weight loss really works, and new foods to try or strategies for eating in non-standard situations. I never felt deprived and she got me through my sugar cravings and helped me re-group when the best laid plans fell apart.
   Her book is brilliant, and I am so happy to have it to refer to. It's like having her right with me... Her voice really came through and it's fun to see the things we talked about in her office referred to on the page. I recommend this book unreservedly. For those of us who are overscheduled, overstressed and overweight...The Wall Street Diet is the answer!
   Kate R.



3. I just finished reading Heather's book and realize she has uncovered the secret to losing weight. It's not fad eating,not counting carbs, protien or fats. She discusses why we eat and has made it very simple. I realize I am CPCer. She has great insight into diets and why they work and don't work. READ HER BOOK



4. If you are someone with a "Wall Street" lifestyle, i.e., you work long hours, spend a lot of time in hotels and planes, wine and dine clients, etc., then you may have just found your success Bible for weight loss. This book takes a very realistic look at the daily life of a "mover and shaker," and provides practical information on how you can work weight loss into your crammed schedule without spending hours in the kitchen or in the gym or missing out on important client lunch meetings or work receptions.
   
   I used to be one of these so-called "movers and shakers" (I didn't feel like much of a mover or shaker, however!). I pulled many all-nighters, spent weeks in hotels, and most days looked forward to taking breaks from work to eat fabulous dinners delivered from great restaurants and billed to the "client." During that time I was persistently tired, certainly too busy and lethargic to work out, and I gained 10-15 pounds over the course of a year or so.
   
   I wish I had had The Wall Street Diet then. One interesting aspect of this diet - and one that I would suggest might be the key to its success - is that it does not focus on exercise first. Instead, it asks you to analyze your eating habits to determine if you are a Controlled Eater (CE) or a Clean Plate Club (CPC) eater, and then it gives you practical tips for how to mazimize your eating plan to work with and not against your eating type and to reduce your calorie intake without too much pain. After all, losing weight is just math - 3,500 calories = 1 pound.
   
   And that math is what Heather Bauer uses to focus first on diet and later on exercise. It can take an hour or two to burn off 500 calories, but 500 calories can be consumed in but a few moments. For someone who has limited time, controlling calories is a more efficient manner of losing weight than working off the weight. Plus, as Ms. Bauer recognizes, if you tell someone on Wall Street that they have to spend an hour or two in the gym every day, they may get frustrated very quickly when their schedule causes them to miss a few gym visits and throw the entire diet out the window.
   
   Recognizing that Wall Street types cannot spend hours in the kitchen and eat only homemade, calorie-restricted foods, the author provides a wealth of information about what foods to eat at common fast food chains and other restaurants, what is best to order at various types of restaurants (e.g., steak houses) or takeout options (e.g., Chinese), on airplanes (and what to bring with you as snacks on flights), and also tips for how to get over jet lag, ways to get exercise while traveling, etc. I think this information is incredibly useful for ANYONE, not just those on "Wall Street," and I plan on using this information to help guide me to healthier choices every day.
   
   Finally, it is important to note that Ms. Bauer does not completely disregard the importance of exercise. Rather, she says start with the diet, and then gradually work exercise into your busy schedule as best as you can. She offers examples of good exercise schedules (starting with 3, 20 minute cardio sessions a week), tips for workout videos, "fun" options that don't seem like "work" and that allow for family participation (Nintendo Wii), and good alternatives for frequent travelers (such as iTrain). Again, realistic rather than intimidating.
   
   All-in-all, I think this is a very doable plan that will actually work - and work because it is something that people with full schedules and hectic lifestyles can follow and stick to. For those who are not on "Wall Street," I think the information in this book could also be very useful, particularly the analysis of the two types of eaters (CE and CPC). I would highly recommend this book to anyone interested in losing weight without having weight loss take over their life. 5 stars.



5. You're a hard-working corporate professional who has a terrific job and earns a great salary. You climbed to the top fast and plan to stay there. You know what you must do to lose weight. Despite your best efforts, however, you cannot attain this goal. So why can't an intelligent, goal-oriented individual lose weight? Every aspect of your corporate lifestyle routinely conspires against your weight-loss plans, undermining them at every turn. You face daily daunting eating choices: jelly doughnuts at the office, lavish meals with clients, plus regular cocktail parties with high-calorie alcoholic beverages and tasty goodies on sticks. But don't despair. Dietician Heather Bauer offers the robust Wall Street Diet plan tailored to your fat-inducing corporate lifestyle. If you are one of the corporate types who can button up million-dollar business deals but not their own pants, getAbstract recommends Bauer's intelligent strategies to overcome your daily diet challenges. This smart and sensible book will enable you to attain your weight-loss goals with the same verve you bring to your corporate career.

5 comments about Capital Ideas: The Improbable Origins of Modern Wall Street.

1. Dr. Bernstein immerses readers in lucid tales about the evolution of the capital market theories that helped shape Wall Street's mindscape. Along the way he introduces the names and faces that delivered to the investment community ideas about Brownian Motion, the Efficient Frontier, the Separation Theorem, the Capital Asset Pricing Model (CAPM), the Capital Structure Puzzle, the Black - Scholes Option Pricing Model and portfolio insurance strategies, to name a few.
   
   One of the interesting factors that emerges from this book is the powerful influence of the computer...which today we all take for granted. Quite a few of the presented ideas were indeed introduced well before the computer's general commercialization. As such, they often lay dormant, undiscovered or under-appreciated for years, even decades. It leads one to wonder about what investors are missing today that will emerge into common useage in the future. How exciting!
   
   Beginning investors will experience Capital Ideas as a useful outline of the many principal concepts they will be working with should they decide to pursue the field more seriously. Experienced investors will likely find that Capital Ideas neatly summarizes many of the academic theories they've been exposed to.
   
   A noteable gap in Dr. Berstein's exposition arises through his decision not to directly address the implications of Dr. Richard Roll's MPT critique. To say the least: It is quite important to understanding the CAPM's implications.



2. I borrowed the book from my library (fortunately I didn't buy
   it) with great expectations. What I found it to be was a 300+
   page infomercial for Academic Finance. Bernstein is not
   merely a cheerleader of Modern Academic Finance, but a Worshipper.
   His gods are messrs Markowitz, Sharpe et al. I returned the book
   after reading about 1/2 of it.
   
   The book is disappointing on several fronts :
   
   - It is completely biased in its treatment.
   - There is no mention of Behavioral Finance. Bernstein does not
   even acknowledge the role psychology plays in the markets. For
   the gods and disciples of modern academic finance, the market
   is always efficient. Which we know (by now) is pure Bunk.
   - There is nothing in the book about Ben Graham (and his students
   and followers), people who revolutionized the investing world
   at least as much as the ivory tower theorists.
   
   Readers hoping to learn something useful from the book will be
   sorely disappointed.



3. Again it is evident that acedemicians, whatever their field, will tend to embrace elegant, complex but flawed theories over simpler and more sound ones.
   
   The Graham and Dodd disciples (e.g. Warren Buffett) have shown that they can consistently beat the market indices by simply buying good companies at good prices.



4. A great book to establish an understanding for how the current investment strategies came about. Petere Bernstein did a great job of introducing mathematical masterminds such as Louis Bachelier; the inventor of stochastic analysis concepts, the birth of Dow Jones, the creation of S&P 500 index by Alfred Cowles, Portfolio Selection by Harry Markowitz and many other financial and statistical intellects.



5. The popular literature about the world of investment in the 1980s carries titles that reflect those events: Bonfire of the Vanities, Barbarians at the Gates, The Predators' Ball, and Liars' Poker. The main characters are arrogant, greedy, cynical, and shady. The movie Wall Street summed it all up: "greed is good", the address by corporate raider Gordon Gekko to a crowd of investors, is the claim that came to epitomize the zeitgeist.
   
   But what if the real heroes of the stock market frenzy were not those pathetic figures that generations of MBA students tried to emulate? What if the unsung heroes of the times were instead the professors and ivory tower academics who wrote those students' textbooks? Finance professors are usually not held in very high esteem: their economics colleagues won't share office space with them, their practically-minded students deride them for not practicing what they are teaching, and the general public considers any accident on the stock market as proof of the flaws in their theories.
   
   Peter Bernstein's book pays due respect to their profession. It focusses on a small group of innovators who created finance as an academic discipline, and transformed Wall Street and the world along the way. Published in 1992, Capital Ideas starts and ends with two turning points in the history of modern finance: the crisis of October 1974, which saw the culmination of the worst bear market in common stocks since the Great Crash of 1929, and the stock market crash of October 1987, in which hundreds of billions of dollars were wiped out in a few hours.
   
   Financial innovation was blamed on those two occasions, and finance specialists were castigated as sorcerer's apprentices. But for Bernstein, finance is more a solution than a problem, and the answer to the risk of innovation getting out of control is still more innovation. Had it not been for the crisis of 1974, few financial practitioners would have paid attention to the ideas on portfolio selection and risk management that had been stirring in the ivory towers for some twenty years. And putting the blame of the 1987 crash on portfolio insurance, as the commission chaired by Nicholas Brady did, is compared by the author to a proposal to slow down the train, when efforts should focus on improving the quality of the roadbed.
   
   Finance had difficulty establishing itself as an academic discipline. It was taught mostly in business administration departments, not in economics faculties. Even in business schools such as Harvard, the investment course in the 1950s attracted so few students that it was taught at noontime so that it would not take up precious classroom space at prime time. Finance attracted marginal individuals, the kind of persons that would be described nowadays as nerds, with a taste for crunching numbers and dabbling with computer mainframes. Only a few of them had formal training in economics. The discipline flourished in only a handful of US universities where the talent of a few individuals made a difference and where business school professors did talk to their colleagues in the economics department: Chicago, MIT, and a few other places.
   
   The body of knowledge that forms the core of the discipline-what Bernstein refers to as Capital Ideas- was conceived in the space of only twenty-one years, from 1952 to 1973. In short, it is contained in Harry Markowitz's work on portfolio selection, Franco Modigliani's and Merton Miller's revolutionary views about corporate finance and the behavior of markets, the Capital Asset Pricing Model developed by Sharpe, Treynor and a few others, Eugene Fama's explication of the Efficient Market Hypothesis, and the option pricing model of Fischer Black, Myron Scholes, and Robert C. Merton.
   
   When the discipline was developed, many economists regarded the stock market as a side-show in the economic system, not worthy of serious attention. Even Milton Friedman, who sat on Markowitz's dissertation committee, reflected the prejudices of the profession when he declared: "Harry, I don't see anything wrong with the math here, but I have a problem. This isn't a dissertation about economics. It's not math, it's not economics, it's not even business administration." And it was something completely new and unrelated to previous work: Markowitz's seminal paper on Portfolio Selection, that brought him fame and a Nobel Prize, lists only three references to other works in its bibliography. One of the most fundamental paper by Jack Treynor, that laid the groundwork for the CAPM, wasn't even published.
   
   There were some exceptions. The most famous was Paul Samuelson, known for his textbook first published in 1948 and who made so many contributions to the economics discipline that the Nobel jury had trouble highlighting only a few when they awarded him the prize in 1970. Although Samuelson was Keynes' most distinguished disciple, he rejected Keynes' own view of the market as little more than a casino, and he saw the stock market as a central institution as well as a source of fascinating intellectual puzzles. Another economist with a keen interest for financial markets was James Tobin, who spent most of his career at Yale except for a brief stint at he Council of Economic Advisers that began with the following dialogue when President Kennedy offered him the job:
   - I'm afraid you got the wrong guy, Mr. President. I'm an ivory-tower economist.
   - That's the best kind. I'll be an ivory-tower president.
   - That's the best kind, Mr. President.
   
   The book is very rich in anecdotes and personal details on the academic founders of modern finance, most of whom were interviewed at length by the author. It requires no prior knowledge of the field, although knowing one's betas from one's alphas will help the reader go through the material. My own exposure to theoretical finance has been very limited, but having done the maths once on the CAPM or the Modigliani-Miller theorem helped me get through the relevant chapters, whereas the last chapters on option pricing theory or continuous time finance are way beyond my grasp and could only be understood metaphorically. But the Capital Ideas and the difference that they made are just too important to be left ignored, and Peter Bernstein has made a great job of explaining them to the general public.

5 comments about 45 Years in Wall Street.

1. all



2. Most famous for his 24 never-failing rules - basically follow the trend, use stop losses, and never average down. Also includes lots of useful Dow data back to 1912 - with swing charts, etc.



3. This book was written in 1949. By all means what put forth by Gann as the 12 and the 24 rules are still valid today. In fact, his ideas are still being copied in simply all other trading books. Even the diary like section in Soros' Alchemy of Fianance did resembled the style of a majority part of this book. In short, a must read for any trader!

   Remark: One might think that I am a crazy Gann friend. To justifiy the title I put for this review, I would like to summarize Gann's 12 and 24 rules for one's reference:-

   The 12 rules:-
   1. Determine the trend
   2. Buy at single, double and triple bottoms
   3. Buy and sell on percentages
   4. Buy and sell on 3 weeks' advance or decline
   5. Market moves in sections/waves
   6. Buy or sell on 5 to 7 point moves
   7. Study volume to determine change in trend
   8. Study time factor and time periods to determine change in trend. (p.s. when a time period on a decline exceeds that of a previous decline, it indicates a change in trend)
   9. Buy on higher tops and bottoms
   10. A change in trend often occurs just before or after holidays. (p.s. when prices are at high levels there are usually several swings up and down, then when the market breaks the low of the last swing it indicates a reversal and change in trend)
   11. Buy on a second reaction at a higher bottom. When it reacts only 2 days, it is in a very strong position.
   12. Price gains in fast moves does not last very long.

   The 24 rules:-
   1. Never risk one tenth of capital in one trade.
   2. Always use stop loss orders.
   3. Never overtrade.
   4. Never let a profit run into a loss.
   5. Do not buck the trend.
   6. When in doubt, get our or dont get in.
   7. Trade only active stocks.
   8. Equal distribution of risk in 4 or 5 stocks.
   9. Trade market order.
   10. Dont clsoe your trades without a good reason.
   11. Accumulate a surplus
   12. Never buy just to get a dividend.
   13. Never average a loss.
   14. Never get out/in of the market because of impatience or anxiety.
   15. Avoid taking small profits and big losses.
   16. Never cancel a stop loss order after you placed it.
   17. Avoid getting in and out of the market too often.
   18. Be just as willing to seel short as you are to buy. Let your object be to keep with the trend and make money.
   19. Never buy/sell just because the price is low/high.
   20. Wait till the stock is very active and has crossed resistance levels before pyramiding.
   21. Select stocks with small volume of shares outstanding to pyramid on the buying side.
   22. Never hedge one stock by another.
   23. Trade with a plan and do not get out without a definite indication of a change in trend.
   24. Avoid increasing trading size after a long period of success.




4. "45 Years in Wall Street" was actually Gann's last book, written in 1949 (he issued a revised edition of his commodities book in 1951), in which he presents the final version of his cycles-based system. Since cycles can extend, shorten, invert, and skip, Gann offers several trend-following methods to minimize damage from forecasting mistakes and to keep one on the right side of the markets. His excellent, 24 trading rules afford advice on money management, risk management, trend-following, trade entry, and exit techniques that are currently valid.
   
   Gann always openly hinted that the details for his celebrated forecasting method were concealed in his writings. This book, as is all others written by Gann, is written on two levels. The first level is expository and describes how to swing-trade. The arcana submerged in the second level can be approached by examining the recurrent themes about time, price, and geometry, and the dates which he feels are significant. Details for Gann's time and price model are contained in all of his books and major courses with the exception of "Tunnel Through the Air."
   
   Strangely, the weakest part of this book is the final chapter with Gann's predictions for the early 1950s. Gann felt that 1953 was going to be a year of post-war depression rivalling the great depression of the 1930s. His cycle model indicated a strong down-turn which actually became a cyclical inversion where the market turned sharply upwards - such are the hazards of public forecasting! However, Gann followers should not have lost money during the 1953 inversion, because their swing-trade methods would have self-corrected this forecast error.
   
   Whatever level one chooses to tackle, this book is a worthwhile addition to anyone's trading library.
   
   Addendum, August 28, 2006: Gann stated that it was not possible to use his methods in forecasting unless one used the appropriate starting points. Some such starting points for the next several years, representing important stock market pressure points from which to construct timing squares, are as follows (Yr-Mo-Dy): 060922; 070110; 070403; 070723; 071109; 080228; 080520; 080908; 081226; 090416; 090707; 091026; 100212; 100506; and 100825.



5. This book is extremely boring. It has time series descriptions as: Monday 10.8, tuesday 9.5, wednesday 9.7, thursday 10.2, friday holiday etc... that could be better presented by a chart. Also his 3 point rule is poorly described. The paper quality is also poor. Only the first chapter is interesting because of the rules (some advice) that you can read cheaply on one of the book reviews.
   Overall, boring, tedious, expensive and not very informative.

5 comments about From Wall Street to the Great Wall: How Investors Can Profit from China's Booming Economy.

1. In my opinion, this is an excellent guide for any individual investor who feels he (she) may want to "profit from China's booming economy." Even if the reader decides not to invest in China, the account of how far China has come in a period of approximately three decades is an interesting and amazing read.
   
   The book is divided into three sections: The Setting, which provides a historical background on China and its people; The Investments, which explains how Chinese securities are structured and traded; and The Strategies, which provides advice as to how investors might go about investing in China's economic success.
   
   The final chapter, The Optimal Investment Strategy, presents the authors advice as to how an individual investor might pursue an investment plan and at the same time minimize risk. The authors throughout the book emphasis risk and in the final chapter clearly state, "We warn you in advance that it is not an exciting strategy that will make you a millionaire shortly after reading it - but it is a strategy that sharply curtails your risk."
   
   Another reviewer of this book has made comparisons of this book with Jim Rogers' A Bull In China. In my opinion, From Wall Street to the Great Wall is a far superior read. Burton Malkiel has the academic credentials and decades of experience in teaching investing to students. He has also been on the board of directors for many years at the Vanguard Group, a company dedicated to the best interests of individual investors. The average investor would be foolish to invest directly in Chinese companies as Mr. Rogers suggests. That would be like walking through a mine field. I suggest sticking with the advice of the professor.



2. The process of reading this book was very happy. It's really a very useful book to indicate me to invest in China no matter in the bull market or other types of the market.



3. As always, Malkiel's mantra is to diversify broadly. In all editions of his famous "A Random Walk Down Wall Street", he urges people to invest according to their means and situations, to diversify their investments across industries, and also to diversify internationally.
   
   But why write a whole book about one national economy if your mantra is to diversify across them? It's because, quoting the authors, "there is no question that China will shortly surpass the United States and once again become the world's mightiest economic power". As such, Chinese assets deserve a special place in anyone's portfolio.
   
   The book gives a very brief account of Chinese history, followed by an overview of the Chinese investment markets, and finally a collection of investment strategy. Of these, Malkiel only recommends one (diversify broadly within China, invest regularly rather than all at once) but he describes other viable strategies for people with a higher appetite for risk.
   
   It's open to debate whether the Chinese will come out on top in the near future. After all, as we can read in China's most famous work of literature "empires wax and empires wane". But given that China has the world's oldest continuing, recognizable national identity, given that she is becoming freer and freer, and given that China is intensely motivated at all levels to improve herself, it would be foolish and dangerous to dismiss her.
   
   Vincent Poirier, Dublin



4. Knowing that Malkiel is the father of efficient market hypothesis and wide diversification, I find it somewhat surprising that he has written a book on investing in a specific country. The brief summary of China's culture and history gives some background on how China found itself in the turmoil of the Cultural Revolution and why it lacks qualified accountants and financial analysts (an entire generation sent for reeducation).
   
   The chapter covering risks is titled "Perceived Risks", and Malkiel basically debunks most of them as fiction or explains away the risks by pointing to the cultural pride, work ethics, and other factors to overcome them. It seems one-sided much like apologetics and boosterism. Maybe I'm skeptical, but it's not a foregone conclusion that China will avoid all their problems, political, social, economical, and become the dominant economy in the world. And no stock market only goes up.
   
   What Malkiel does a good job of is explaining the tests of efficiency for Chinese stocks. He explains the alphabet soup of A share, N share, H shares, and concludes that as of 2005 the N and H shares a pretty efficient. However the A share market is still inefficient and subject to manipulation. He also explains the discrepancy of pricing between shares of the same company in the different exchanges. Furthermore it is confusing how to analyze the earnings, growth, profitability of state owned enterprises, who are 70% owned by the government and only float a small percentage of their shares on three different exchanges where they are all priced or bundled differently.
   
   He concludes with several strategies for small, medium, large investors, with portfolios of ETFs and/or index funds. And for the true speculator he covers a few of the stocks in each industry. But as in any book, the information will be woefully old and out of date by the time it is published, printed and read. For the average investor who wants to have an exposure to China, I would personally buy a mixture of China index funds (GXC, FXI) Vanguard Emerging Market Index (VWO), but don't let that be your entire portfolio. Malkiel recommends a percentage based on your risk tolerance. For this wisdom, I don't think you need to buy the entire book, unless you want to learn about the various ways stock is available (Chapter 4).



5. As a Financial Advisor I am always looking for different ideas/opportunities to incorporate into my clients' investment portfolio.
   While at the library with my son, this book and the title caught my eye and I immediately began reading the book thus checking it out.
   It is a fine read that begins with the history and politics of China and eventually leading into the markets, its efficiencies and some particular investment options/strategies to capture, what has been and should continue to be,an economic boom in China.
   
   It is a good, easy and enjoyable read but you must take the authors' somewhat biased opinions with a grain of salt - as with anything.
   
   I do agree that there is a huge opportunity for profits and a place in one clients' portfolio for an investment in China and have over the last few years been adding such.
   
   I would recommend this book.

1 comments about Audioseminar CD "Candlestick Charting Basics" with Steve Nison.

1. Great discussion and charts to go along with the presentation