Daily Speculations

The Web Site of Victor Niederhoffer & Laurel Kenner

Dedicated to the scientific method, free markets, deflating ballyhoo, creating value, and laughter;  a forum for us to use our meager abilities to make the world of specinvestments a better place.

 

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ASK the CHAIR!

A Query that I am often thrown after I have listed my 10 big cons in the markets is what is a good book and whose work do you admire in the market.

I would answer that "Triumph of the Optimists: 101 Years of Global Investment Returns," by Dimson, Marsh and Staunton (Princeton University Press, 2002) is by far the best book on the subject.I was particularly amused recently when Paul de Rosa told me that he recommended the book to the 11-year-old son of his gardener as a good introduction to the field. (The boy already had accumulated $10,000 to invest, by working.) I would add that I find Paul DeRosa the one shining light in the investment world that I admire as a money-making personality with a good view of the forces that affect the world.

And then I add that Marty Whitman's approach to analyzing the contractual detail of debentures of failing companies seems to add a level of insight  above and beyond the norm.

I would now recommend William Goetzmann's "An Introduction to Investment Theory." There are chapters on capital markets, the basics of return and risk, preferences and investor choice, CAPM,  the security market line, arbitrage pricing theory, betas, leverage, information and efficiency. No higher math is required. Will Goetzmann is a scholar, historian, statistician, cultured man, and shrewd observer of the follies of mankind and academia.

I would be interested in other recommendations.

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