While the book’s reliance on statistical analysis may make it too technical for the average reader, it’s likely to be an...

THE MISSING RISK PREMIUM

WHY LOW VOLATILITY INVESTING WORKS

In this contrarian view of the asset pricing model, Falkenstein attempts to debunk the notion that greater risk equals greater reward.

In this detailed statistical study of risk as it applies to financial investments, the author claims that most in the financial world agree with the theory that “the expected return of a financial asset is a function of risk.” However, Falkenstein, who holds a Ph.D. in economics from Northwestern University and has been a risk manager and portfolio manager, contends that there is little evidence supporting the idea that taking risk results in higher returns. In fact, “in practice any measure of risk is at best uncorrelated with average returns and is often negative.” The author, targeting economists, financial analysts and students, expounds on the current asset pricing theory, discusses the “rise and fall of standard models,” and for good measure, adds a bit of psychosocial commentary in chapters entitled “Why Envy Explains More than Greed” and “Why We Take Too Much Financial Risk.” Falkenstein’s perspective is that asset pricing theory “is based on a profound mistake over what is more important to financial decision makers, envy versus greed.” He advocates “the acceptance of what predicts better, and the rejection of what predicts worse.” As evidence that it’s difficult to swim against the tide, the author cites his own experience trying to convince others to buy low-volatility stocks. He writes that his idea “was always dismissed” until he became an equity long-short portfolio manager at a hedge fund, where, he asserts, he personally made $3.5 million over two years. The author’s conclusion is likely to be controversial in some circles, if not downright inflammatory: “Many common investment strategies and tactics are as costly as gambling.”

While the book’s reliance on statistical analysis may make it too technical for the average reader, it’s likely to be an eye-opener for economists and financial analysts willing to consider unconventional alternatives. 

Pub Date: Aug. 16, 2012

ISBN: 978-1470110970

Page Count: 196

Publisher: CreateSpace

Review Posted Online: Oct. 29, 2012

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Striking research showing the immense complexity of ordinary thought and revealing the identities of the gatekeepers in our...

THINKING, FAST AND SLOW

A psychologist and Nobel Prize winner summarizes and synthesizes the recent decades of research on intuition and systematic thinking.

The author of several scholarly texts, Kahneman (Emeritus Psychology and Public Affairs/Princeton Univ.) now offers general readers not just the findings of psychological research but also a better understanding of how research questions arise and how scholars systematically frame and answer them. He begins with the distinction between System 1 and System 2 mental operations, the former referring to quick, automatic thought, the latter to more effortful, overt thinking. We rely heavily, writes, on System 1, resorting to the higher-energy System 2 only when we need or want to. Kahneman continually refers to System 2 as “lazy”: We don’t want to think rigorously about something. The author then explores the nuances of our two-system minds, showing how they perform in various situations. Psychological experiments have repeatedly revealed that our intuitions are generally wrong, that our assessments are based on biases and that our System 1 hates doubt and despises ambiguity. Kahneman largely avoids jargon; when he does use some (“heuristics,” for example), he argues that such terms really ought to join our everyday vocabulary. He reviews many fundamental concepts in psychology and statistics (regression to the mean, the narrative fallacy, the optimistic bias), showing how they relate to his overall concerns about how we think and why we make the decisions that we do. Some of the later chapters (dealing with risk-taking and statistics and probabilities) are denser than others (some readers may resent such demands on System 2!), but the passages that deal with the economic and political implications of the research are gripping.

Striking research showing the immense complexity of ordinary thought and revealing the identities of the gatekeepers in our minds.

Pub Date: Nov. 1, 2011

ISBN: 978-0-374-27563-1

Page Count: 512

Publisher: Farrar, Straus and Giroux

Review Posted Online: Sept. 4, 2011

Kirkus Reviews Issue: Sept. 15, 2011

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Gucci demonstrates all the bravado and ferocious self-confidence that he counsels—and the photos are a nice bonus.

THE GUCCI MANE GUIDE TO GREATNESS

A hip-hop star who went on his first international tour wearing an ankle monitor explains how to succeed.

“The words you are about to read can help you,” writes Gucci. “That’s because there is truth in them. These are words of wisdom, like the Bible and its proverbs.” Unquestionably, Gucci likes to aim high, as many of his proverbs attest: “Stop Underestimating Yourself”; “Whatever You’re Thinking, Think Bigger”; “Nobody Cares. Work Harder”; “When They Sleep, I’m Grinding”; “Do More, Get More.” And never forget, “Women Are Brilliant.” Gucci not only shares his recipes for success. As in a cookbook that shows pictures of the end result, the author includes dozens of dazzling photos of himself and his beautiful wife, among them a series on his surprise wedding proposal at an Atlanta Hawks game. After the success of his bestselling debut, The Autobiography of Gucci Mane, Gucci has realized there is money to be made in the book business. In addition to the Bible, he has his eye on Malcolm Gladwell and his reported $5 million advances. While he is “cool with Malcolm Gladwell being more celebrated than me as an author…the difference between Malcolm Gladwell and me is that I’m going to make more money because I’m going to make so many books for my following….You can enjoy this book or not, but I’m going to make my fifty-second book, my hundred and eighth book.” Many readers will hope that one of them will be a diet book, as the 100-plus pounds Gucci has lost and kept off are a frequent topic—alas, he doesn’t reveal his weight loss secrets here. Until the next book, try to live the Gucci Mane way. “Avoid lazy and miserable people,” and “Find something to be excited about every day.”

Gucci demonstrates all the bravado and ferocious self-confidence that he counsels—and the photos are a nice bonus.

Pub Date: Oct. 13, 2020

ISBN: 978-1-982146-78-8

Page Count: 272

Publisher: Simon & Schuster

Review Posted Online: Sept. 10, 2020

Kirkus Reviews Issue: Oct. 1, 2020

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