This is a book everyone should read (even if this Economist link isn't exactly flattering). My virtual sister-in-law gave it to us for Christmas (trader/market shrink and economist/options trader in the house after all) and I am very glad she did. In these days of blaming the bankers and even…
I have been wondering since mid-October when they were going to give in and do the basic thing one needs to do to stabilize a market - provide a deep-pocketed bid! In fact, I said it on the Cavuto show and have said many times since, until the Treasury starts…
Someone named Robert Skidlesky wrote a book called John Maynard Keynes: 1883-1946: Economist, Philosopher, Statesman. He says that Keynes said "not all future events could be reduced to measurable risk. There was a residue of genuine uncertainty and this made disaster an ever-present possibility, not a once-in-a-lifetime 'shock'. Investment was…
WSJ Weekend: "Fund Fraud Hits Big Names". New York Times Sunday Business: Schiller talks confidence and beliefs and Ben Stein talks fear. Madoff's investors "felt confident" in his long-time consistent returns. Yet every article indicates there were multiple red flags. No investment fees? Not even a 1% management fee when…
Portfolio selection: Let's exhume the buried man! In his milestone paper "Portfolio Selection" published in the Journal of Finance in 1952, Harry Markowitz, the pioneer of "modern finance," recommends to use the Expected return-Variance (E-V) rule, both as a working hypothesis to explain investment behavior and as a guide to…
a 1000 points???? are they kidding....... Richard Bookstabber in Demons of our Design had it right when he described how interconnected all trading and all markets are.... the only part he didn't really cover in detail is this: it is NOT fear and greed - it is fear and fear2.…
Last Friday we all knew SOMETHING was going to happen. But who could have predicted the week that now was? LEH, MER, AIG and even RTC2.... 500 down, 500 up: certainly a time to understand the new science of decision-making! Early in the week, I had the enormous privilege of…
