helpful but a little biased against martingale
582051
amongst all strategies,  did not mention you can double down credit spread down/up and out just to break even with less chance of breaking the bank.
3777546
What I really wanted to comment on was the website that is frequently mentioned in this book. Navellier does the same thing, for example. These websites are useful as resources, as confirmation of one's own independent analysis and research. A variety of analytical techniques, combined with a rating from one of these websites for some more confirmation, is not a bad way to trade. However, I find subscribing to a lot of these services as not only expensive ($50 a month subscriptions add up quick) but not so useful to RELY ON. (notice I said rely on, rather than not useful to use... they are very useful for providing extra information.)

By the time you move into a suggested position the "real" clients of these trading strategies have already taken their positions and possibly run up the price, making the ideal bottom point of a run difficult to get in on.

It is really common for trading manuals to seem like marketing ploys for their websites. If the site is a FREE SERVICE and provides research and technical details, then use it. Books that get one revved up by saying how much money their clients are making, "Go to my website to see how we do it..." (fine print- thanks for buying my book, but now you have to subscribe to my website)  Be wary. Very wary. Use this information as a RESOURCE, not a crutch. As I mentioned earlier, as confirmation of one's own analysis these sites can be excellent informational sources, and can provide easily accessible, time-saving analysis. The more information from a variety of sources you employ, the better off you are.
3921786
Although a good resource book about the benefits of mutual fund investing,I found the title to be a bit misleading. Being the self proclaimed creator of index funds, Bogle cites many years of comparative returns from mutual funds while making the case that,over the long run, investing in index funds will produce the highest returns. I think a more apt title might be  "Why Index Funds Beat All".
804329
This is (still) an excellent book, ahead of its time when published in 1986. One of the issues he dealt with was the possible modifications to option pricing models (black-scholes type) that could be made to account for trending markets. This was before the crash of '87 and the subsequent wide-spread adoption of skewed volatility smiles and risk-reversals into option pricing.
This book is probably out of print permanently, but the author is working on a new book, the provisional title of which is "Asset Price Dynamics and Prediction" Target Date of March 2004. The chapters are loosely based on subjects covered in Modelling Financial Time series.
Chapter headings for Modelling Financial Time series:
1. Introduction
2. Features of financial returns
3. Modelling price volatility
4. Forecasting standard deviations
5. The accuracy of autocorrelation estimates
6. Testing the random walk hypothesis
7. Forecasting trends in prices
8. Evidence against the efficiency of futures markets
9. Valuing options
10. Concluding remarks
Appendix : a computer program for modelling financial time series
1567299
A nice and practical book explaining the reason why under certain hypothesis the Gaussian assumption is completely wrong...and you lose a lot of money in NYSE market!
2355376
After talking to Scott a fair amount on Facebook, I decided to give his book a try.

Let me say right away that I don't embrace the same investment strategy that Scott does. As founder of www.netnethunter.com, I'm pretty obsessed with net net stocks. That being said, I'm giving this book as detached and balanced of a review as I can.

Scott's book is written for people who are just starting out in investing -- new investors. If you're looking to stat out as an investor, then this book is a good first initial read to get a broad range of terms and strategies under your belt. Scott's writing is accessible and he's able to break down complex concepts into small pieces that are easy to digest.

His focus is mainly on Warren Buffett's contemporary investment strategies and he does a good job explaining them for readers. He also talks about a number of other contemporary investment strategies, such as weighted average cost of capital, but also touches on small pieces of Ben Graham.

Where this book shines is in the talk of investment temperament. This is critically valuable for new investors, and something that's more or less ignored in other investing books despite how critically important it is to your success.

This book is great, but not perfect. If there was a greater breadth (or an equal amount of pages devoted to) a wider range of investment styles, and these strategies were covered in more depth, then it would have been an easy 5 stars. That's not the book he intended to write, though, and for what it is it's great.

If you're interested, I wrote a much more detailed review here: http://www.netnethunter.com/art-science-of-value-investing-a-book-review/
979108
Just to let you know, this is NOT an investment guide. It will not tell you what to do with your money. It will, however, tell you many ways to get your money. Starting first with an over view of retirement plans, it then moves on to an overview of tax rules. The only problem I have is that tax rules change every year, and next year will have some significant changes on how you access money from trusts. With that said, there is a lot of very useful information in this book, and even the appendices have a lot of useful information. It deals with annuities, Roth IRA's, Roth 401(K)'s, etc. What could have been one of my favorite chapters is, "How Penalties Can Guide Planning." This could have been a very good chapter, however, it is only half a page! 4 stars because there is too little information in certain areas, this being one of them. 4 Stars because it does offer some good information and I learned a few things I didn't know. Do I regret reading this, no way. Did it fill me with the confidence of an expert, no, it did not. I probably would have rated it 3.5 stars if I had the chance. Still, I believe it is useful, and probably a better tool for those who are considering setting up/funding specific accounts.
1084509
I like this book. Like many people perhaps, over the years I've set aside the Buffet letters with intentions to read them, but they never seem to rise to the top of the heap. So this collection of summaries of Berkshire Hathaway annual meetings fit my needs well.

This book needs to be studied and not read, though. Periodically -more than I would have thought- I encountered unfamiliar phrases that seem to be important concepts that sent me digging deeper elsewhere.

I really didn't want to finish it too quickly because reading it is like meditation: a little bit regularly seems to be more valuable than a lot at once. I will say I did a lot of highlighting so I can come back to these again. Also, I added four more books to my queue as a result of pointers in the book.

The authors point out that because this is a compendium of newsletters from years past, they edited out redundancy. From my reading I think they did a good job - sufficient redundancy to emphasize key points, but not so much as to be repetitive. Also, I liked the length of the book.

I'd give the book a 4.5 if I could, but I found I was wanting for some additions to the book - perhaps in a future edition!

1. Sometimes, the authors use terms of art that are important financial concepts that may not be well known to the amateur investor. Would have been nice to add pointers.

2. Sometimes, the language is ambiguous and could stand more editing for clarity. Mostly, these are stylistic and it's entirely possible they were introduced as the editing removed some context that was deemed redundant. I realize this was probably a challenge as they state they did not want to overly edit historical documents. But, I think the product would be better if they let go of that idea -- it's not like this is a record of state.

3. I would have loved some retrospective evaluation (in callouts or sidebars) where Warren made forecasts. We have the luxury of distance from many of these prognostications, so let's see the scorecard!

All in all, I recommend the book to people like myself, amateur investors who would like a little but of Warren's wisdom to rub off! Others may find it useful, too.
3700706
Random events are unpredictable.  Reading the review below by Craig West just highlights it. Not as a personal attack on him but it is precisely that kind of thinking among traders and analysts (he happens to be a mid-level analyst one at UBS) that is why most of them have short term careers and most of them generate no real sustainable alpha. As for this book, it is worth your time if you want to really understand risk management which obviously Craig West is not privyed to or maybe UBS would let him manage some money.
3198822
I like the overall message this book sends. Invest early and often in low cost index funds throughout your career. As a boglehead, I adhere to many of the principles suggested in this book.

There are a few points I strongly disagree with however:

1. Suggested asset allocation- Each person's asset allocation (AA) is different. Most suggest a 20 something with roughly 80% stocks (some as high as 100%) and 20% bonds. More conservative folks believe the old adage "age in bonds". Stein and Demuth suggest putting a large portion of your stock holdings in foreign markets. I agree that SOME of your holdings should be in a low cost international index, but their 40% (may not be the exact number, but close) is much too high, in my opinion. Somewhere closer to 20 or 25% would be better suited. Or take the opposite extreme, ala John Bogle, with no international funds whatsoever.

2. At several points in the book, the authors say if you reach a certain percentage of your salary by a certain age, you can stop contributing. What!? I've read numerous retirement books and this is the first that said it was OK to stop contributing. First off, if your employer offers a match, you should contribute at least that amount through almost any means necessary. Why would you pass up (literally) free money? Second, you are losing out on building up your funds for the future. Why would you do that? 3. This approach could easily lead to "lifestyle creep". If you spend the money you would have saved for retirement, it will be that much harder later to save them. Best not to fall into that trap. I'd rather be way ahead of the game than step away from it for a while only to find out later that I'm now behind. Think of the lesson the tortoise and the hare taught us. Better to do it consistently than start, stop, and then start again.

3. Their asset allocation begins fairly aggressively (100% stocks if I remember correctly), but ends up with what I would consider fairly conservative. They allocate about 50% to bonds by the age of 50. It partially depends on when the person plans to retire, but with theoretically 10+ years to go, this seems rather high. This would be better suited for someone in their late 50s. When nearing retirement, I could see people sticking with the 50/50 approach or even moving to a 40 (stocks)/ 60 (bonds).

Overall, a good read for newer investors of any age with the caveats mentioned above. They tout low cost index funds and living within (or even below) your means, something people often need to hear again and again.
1073870
I have to admit a large bias.

I really like Nassim Taleb.  I definitely don't agree with everything he says, but I understand why he is trumpeting his views.  Perhaps it is because I trade the markets too.

I have been trading through the same time period as Nassim.  We trade with similar utility functions, in that we primarily profit from outliers.  It is a terribly difficult way to profit, but the benefit is you understand the true nature of the human race the way it truly is, a jungle.

We need to make sure we are not the prey.

When he writes, he is often irritating.  It is a device to make people think.  Thinking is hard, and he knows that.  But crucial.

Does he agree with many of the standards of measure that dictate "business as usual" in today's commerce?  No, very few.  Because he believes, and proves, that the normal limits that business and typical education instill on the rest of society are limits that you likely can't afford.

For example:
A belief that might only be incorrect just once in your lifetime better not be one that can cripple you financially when you are 68 and can't recover.  Or even a whole generation at the same time.

Thanks to Nassim Taleb's Black Swan, there is clear indication and warning that the world's foundations of thought, money and finance are not built on reality, but a form of "reality" that benefits a narrow slice of recipients.

He does believe in 2 plus 2 equalling 4.  But, he gives clear evidence that there is too much reliance on "what everyone takes for granted" structures which can evaporate overnight when it doesn't work for the "powers that be".

Far from being a conspiracy promoter, Black Swan exposes the culprit that makes one feel overwhelmed or victimised by unexpected events to be OUR unwillingness to accept the fact that life isn't a risk-free gesture and YOU have the responsibility to think for yourself.  Or risk potentially dire consequences.

Joel Rensink
Archimedes Investments
2728725
This book presents Buffet's and Hagstrom's portfolio allocation methods.  I say Hagstrom's because I think that much of Buffet's allocation methodology remains between Buffet's ears -- and not that of Hagstrom the author.  Also, I believe Buffet is more opportunistic; he acts decisively when opportunities present themselves.

The author adds discussion of technology stocks, an anathema of Buffet's, and the obligatory discussion of complex adaptive networks which might not be Buffet thinking but more along the lines of Charles Munger, his cohort.

Nevertheless, there are many interesting points in this book.  I listened to the audio tapes and they excellent.  I then took the book out from the library and liked the tapes more.

The author covers several important topics, in a summarized way, but also in a very interesting way.  One topic done well was thinking in terms of probabilities.  Another was diversification: don't over-diversify.

The author also quoted from several books outside of the financial area and have become intrigued with them.  They were: Fire in the Mind (Johnson), Full House (Gould), Against the Gods (Bernstein).

I think Hagstrom is a very good author but his works seem to lack the detail that I like to see.  He's one that can pull the strands of many topics together but perhaps skates over their details.  I would have liked more detail on subjective probabilities as applied to the stock market for example.  More on how Bayes, etc.

John Dunbar

Sugar Land, TX
1430637
I first heard about this book from a reference in Van Tharp's book Trade Your Way to Financial Freedom. In the chapter on `where to place your stops' I saw a reference to the MAE concept from Sweeney. In general, you just measure how far a trade goes against you after you initiate a long/short position. For example, a trade you initiate following a trading system may lose 3% before it gets back in the green. This maximum loss is the maximum adverse excursion. Sweeney suggests comparing the MAE's of your winning trades and your losing trades, and then place a stop-loss order based on these MAE levels. The MFE concept is generally the same, but this time it's the favorable excursion of a trade.
The general idea is that winners don't tend to lose that much before they start to rise, while losers can be recognized once they've declined below a certain loss level (e.g. 6% below your entry).

I find these levels to be very helpful in choosing stop-loss levels for my trades. I used to pick arbitrary levels for my stops, e.g. 10% below my entry point or 2 ATR's below my entry. Those stops aren't necessarily bad, but thanks to these MAE/MFE concepts I can quickly determine their effectiveness. Most of my stop-loss levels are now much closer to the entry points (3% to 4%), while I take my winners not so quick anymore.

For these stop-loss levels alone I recommend this book to mechanical/technical traders. One alert though: you have to be able to backtest the trading system you're following. If your just a technical trader following random technical signals in a non-systematic way, this book will not add much value to your trading.
1069848
I get it, dollar cost averaging, don't freak out when the markets go down, etc, etc...

Still not sure I think buy and hold is a great strategy in this economy, but it's better to be In the game than outside of it.

The most important piece I took from this book is the lazy portfolios are listed on marketwatch.com/lazyportfolio  (also notice how None of these strategies are beating the S&P over the last 3 years)

Go there, follow the Yale strategy, and you should beat the S&P when the market isn't being insane like it is right now.

This book was great advice in the 90s, but with all this QE printing we are doing, I'm not so sure anymore.
1696506
As a reader of Rachev and co's earlier work 'Stable Paretian Models in Finance' this work is admittedly about halfway down from the mathematical stratosphere where the former floated. If anyone knows of a work which can clearly and convincingly explain  the implications of this work for the mug punter please let me know at jenpalex@actapple.org.au.

Paul Mason
2112542
I don't disagree with either of the 2 other intervals but the failure of commodity futures as diversification and the fall of the Yale type alternative investment approach n are well known t many of us. Bernstein explains that asset classes are more correlated than in the past. I read all of  Bernstein's book and this one offered fewer insight than some of the others.
3710071
This book gives a realistic description of algorithmic trading. My learning process has been similar.  I had the same experience with 'intuition trading" in that my intuition is wrong more than right. The positive message is that it is possible to make money....there are ways to put the odds in your favor if you stick it out through drawdowns, stay on top of your systems but be willing to switch when they stop

The author includes a combo system for euro trading.  He bravely agreed to give the results.  Unfortunately, the system is not profitable currently - see this: http://www.kjtradingsystems.com/bookupdates.html  .......update June 10, 2015: He has stopped updating the results (last update was early March). It never made $.