1 comments about Managed Futures in the Institutional Portfolio.

1. Although written more than 10 years ago, most of the topics in the book are still accurate and battles the same issues as we face today, when trying to explain why managed futures belong in a well diversified portfolio.

2 comments about Keys to Investing in Options and Futures (Barron's Business Keys).

1. short, concise, and to the point. I'm not a 5 star person so I may be a bit harsh



2. Good review of options and futures trading. Each section is just 2-3 (short) pages, usually with an example or two, which makes the book very easy to pick up and read a little at a time. Since each section is so short, it also serves as a useful quick reference.

   For more detailed reading on options/futures trading, I'd suggest finding another book. Use this mainly for quick reference, or as a refresher.

5 comments about Single Stock Futures: An Investor's Guide.

1. This book can be summarized thus: the reasons to use SSFs are:
   a. Better leverage [false with portfolio margin]
   b. Tax avoidance [usually false, since the methods described by the author can be classified as "constructive sale" by the IRS]
   
   Everything else the author says is either exchange-generated boilerplate or would work just as well with "SSF" replaced by "stock".
   
   As far as I can tell, the main reason for the existence of SSFs in this day and age is that you can essentially do naked shorting with them [no locate is necessary]. Nothing is free, and in the case of SSFs, the spreads are much wider than for the underlying equity, plus you need to roll them, if you want to hold the position for a long time.



2. I liked the strategy section of this book talking about how to use the futures in practice not just about what they are. I have used the buy-write strategy that the author talks about and have done very well so far. I just wish these contracts were more popular so the liquidity would be better.



3. I agreed with the guy who gave this book a star. When I saw the book, it looks good. But when I started to read it, I realized more than 50% of the book are definitions. It is way too simple.

   Honestly, there aren't any good books on SSF.




4. This book covers more advanced strategies that were interesting like pairs and buy-writes. Also good for learning about hedging large equity holdings in a single stock. I have read all the books available right now on the topic and this one had the most substance and information.



5. this guide was great in helping me understand single futures. I liked how they are explained in a manner of applying them to portfolios and not just technical details of the product.

4 comments about Futures: Fundamental Analysis.

1. This is the most comprehensive books on Fundamental Analysis that I have ever seen. This book along with Schwager's Technical Analysis book are required reading for new futures brokers that I hire to my firm.

   Mr.Schwager and Mr.Turner have put a very strong mathematical spin on how fundamental analysis can be accomplished. They dissect government trade reports and analyst reports and put an empirical face on the nebulus act of fundamental analysis.

   In the preface of the book Mr.Schwager admits that fundamental analysis is not quite accurate. Which begs the question, "why write such a complex book?"

   This book is not for the faint of heart, nor is it light reading. It is quite indepth and for the most part above the heads of many beginning futures investors. In order to understand any of the examples you have to have solid trading reference points in your personal trading life.

   I recommended it for intermediate traders primarily.

   After being involved with futures for 11 years and authoring three books on the subject, I am always impressed at Mr.Schwager thoroughness in researching.




2. There is no question that, when it comes to informational books on the futures markets, Schwager is one of the best around. This book meets his high standard of quality and informativeness. I can recommend this book to anyone looking to broaden their knowledge of fundamental analysis and the guts of what affects supply and demand. But I can't recommend the book wholeheartedly, because basing trading decisions on fundamental analysis in itself is such a flawed approach in my opinion.
   
   I used to pay a lot of attention to fundamentals (as a commodity broker). I would spend hours each day looking at news and research to get a feel for the reasoning behind the movement. After doing this for a while, I realized the inherent futility in the approach--if a trade sets up technically I will take it, unless there is some compelling reason not to--and if there is no technical confirmation, I won't take it, period. So fundamental analysis just doesn't play a starring role in either case. Nowadays, I still keep tabs on fundamentals, but mainly to avoid getting hit by a train; not taking action in front of a significant report, going short coffee in the freeze season, stuff like that. Below are a few reasons why my trading has taken on a strongly technical flavor:
   
   1) Most daily news is worthless, and here is why: at any given time, there seem to be half a dozen arguments for being bearish on a market, and half a dozen arguments for being bullish.
   
   When a market has a big move up and the reason isn't clear, the news services pick a couple of the bullish reasons and talk about those. If the market has a move down, they highlight some of the bearish reasons. It's total retrofitting, and thus usually a waste of time (in that there's not much of a way to turn that knowledge into profit).
   
   Furthermore, the "traders" that the newsies interview are often just run of the mill clerks or brokers who don't really know anything special... or if they do know, they aren't telling. The classic filler explanations on the aftermarket newswires center around buzz phrases like "profit taking," "fund buying" and "fund selling." When you read about one of those three, the general translation is that the reporter dragged out an old standby because "who the heck knows" just doesn't make good copy.
   
   2) Many of the best trades are the ones where the move starts before anyone knows why. Bruce Kovner talked about this concept in the first Market Wizards. If a breakout occurs when everyone is expecting it, then everyone is already in, and the odds are not as good because a lot of the buying (or selling) is already done. But if a breakout occurs and no one knows why, then there are 1) potentially powerful hidden reasons for the move, and (2) a whole group of traders who are not in the market yet, and may want or need to get in (or out if the move is against them) once the reason comes to light.
   
   So, by deduction, if some of the best trades are the ones where fundamental reasons are not yet clear, then by paying attention to fundamentals too much, you run the risk of keeping yourself out of the best trades. You have to be willing to sometimes say, "I don't know why this setup is occurring, but the technicals are tellling me something interesting that the news might confirm later." Because the confirmation of "why" often comes after the window of opportunity has closed, you have to be willing to act before the fundamental reasons are clear.
   
   3) Analysts are often biased and have a hesitancy to change views. When an analyst writes down his opinion on a piece of paper and then sends it out for everyone to see, part of his (or her) pride and reputation is staked on that opinion. It is a psychological truth that writing something down, and confirming it to other people, makes a person more committed to that belief. (Humans have a very strong desire to be consistent.) That make the typical analyst very hesitant to change his mind, even when the facts change. If an analyst is bullish one week and then the facts turn bearish the next week, the analyst should change his mind--but the odds are that he will not, because he will be thinking "well, if I was bullish last week and do a 180 to bearish this week, then I will look stupid."
   
   But often that is the right thing to do! Especially for fundamental analysis, being flexible is very important. But most analysts are too worried about their reputations to have that flexibility. This is one reason trends unfold over time--because the masses are hesitant to change their minds quickly, even as it becomes more and more clear that they should.
   
   4) Much of fundamental analysis is either incomplete or just plain wrong. Even if you have 90% of the puzzle pieces, the 10% that you are missing could be important enough to turn the whole picture upside down. Or if you somehow miraculously have all the pieces, you still have to figure out how to weight them properly and determine what the market is going to pay the most attention to. It is almost impossible to get all the facts correctly uncovered and assembled without overlooking anything.
   
   And then there is always the possibility that something could come up by surprise that you were not prepared for. Different analysts with access to the same information will often have directly contradicting opinions on a market. What does that tell you? Generally the only time that the analysts are all on the same page is when the writing on the wall is obvious... and by that time, the move is usually almost done if not over. There is simply no free lunch.
   
   5) Price--the ultimate value judgment of all underlying fundamentals--reveals itself in the technicals. The technicals don't lie (though they can certainly deceive), and they don't harbor an emotional bias. They represent the opinions of the entire market, with a heavier weighting towards the bigger and smarter players, and are thus more reliable than individual opinions subject to bias and error. For a fast mover such as myself, this is what needs to be known. As far as trading goes, I'm typically interested in the next three days or weeks... not the next three months or years.
   
   For the above reasons, fundamental traders caveat emptor.



3. This Series "Schwager on Futures" is the biggest work has ever been written on futures trading. As a Futures Trader I advise everybody to read these books before to starts any real trading in Futures, that if not taken in the proper way can be very painfull. As a Member of IFTA(International federation Of Tecnical Analisys)I suggest you to read it joint with John Murphy's "Technical Analisys f Futures Markets" and "Intermarket Technical Analisys" this will give you a integral knowledge of Futures Environment that is what you need on your Trading philosophy. I always let these books on my desk because I need them so many times during my trading day. THEY ARE A REAL REFERENCE. The good thing of this series is that you can test your comprension by the various study guides. Reading the book about "Managed Trading" You can even get able to judge the returns of the various CTA and decide when it is better to invest in them and to whom give your money.Probably you are not be interested in the Fundamental analisys book but remember, especially in the commodities markets, EVEN IF YOU ARE GOING TO TRADE TECHNICALLY IS VERY IMPORTANT TO UNDERSTAND FUNDAMENTAL ANALISYS!!! Thank you very much to have spent all this time for read me.



4. Jack Schwager is an excellent author and researcher. His Wizard Trading Fund is certainly not one of the best around, but the man's ideas must be respected. There is a lot of usefull information in this book even if you are a purely technical trader. Most but not all markets are treated in this fine volume.

1 comments about The Complete Guide to Electronic Trading Futures: Everything You Need to Start Trading On Line.

1. I loved that book! With that book you can master electronictrading, I already have traded using that book as a guide and it helpsme with all my trading. Thank you Scott!

5 comments about A Short History of Financial Euphoria (Whittle).

1. Books on economics are not usually very easy reading, but in one sense I am glad that economists in general can't write as brilliantly as Galbraith does. Galbraith puts his inimitably elegant wit and articulacy at the service of the liberal outlook that I myself happen to share. I would not want to see the opposing party able to avail itself of comparable advocacy.
   
   This really is a `short' history, only 100 or so pages. Its topic is recurrent, and seemingly ineradicable, stupidity. In Europe in the 17th century there was speculative frenzy over the introduction of -- can you believe this? - TULIPS. Not long after there was a similar stampede to participate in the hypothetical wealth of South American lands which the promoters neglected to mention were actually claimed by Spain. This was the famed South Sea Bubble, and there were some big names among its credulous participants. There was not only George Frederick Handel for one, there was also - can you now believe this? - Sir Isaac Newton. There is no point in a short review of a short and extremely readable book repeating the complete list. This latter example illustrates one of Galbraith's main points, namely that there is something about financial speculation that turns otherwise intelligent individuals, even men of true and colossal genius, into herds of lemmings. I dare say the Gadarene Swine in the gospel were similarly intent on making a fast shekel as they leapt to perdition over the cliff.
   
   The book dates from 1990, since when we have had first the dot-com bubble and now whatever it is that we have as I write this by way of an apotheosis of avaricious folly. This is another of Galbraith's points, that the whole gullible mentality is like some hardy perennial weed, more robust than any tulip. It springs up reinvigorated with practically every new generation, and there seems to be no field of human activity in which history makes itself heard so little with its clear and obvious lessons. Galbraith does not go so far as to say that there is nothing new under the sun, but he leaves no room for doubt that there is really no such thing as innovation when it comes to manipulating debt. If someone were to claim to have a new method of calculating the multiplication tables, presumably nobody would believe him. Similarly with leveraging, which is to say assets secured (if that is any word for it) on debt. It is all smoke and mirrors, but we never seem willing to learn, and the lofty denunciations that over the years have greeted the nay-sayers (to use a popular barbarism) such as Paul M Warburg are no doubt awaiting anybody who will, in years to come, dare to predict the totally predictable when it next comes round and dare to say that if we do exactly the same things, however we dress them up cosmetically, we should not expect a different outcome.
   
   This short book is aglow with its author's inimitable wit. You can almost open the book at any page randomly and find a gem or two. Galbraith's barbs are not cosmetic, to mix my metaphors a little. They are in support of his argument, and they are addressed to all of us, the great majority whose supposed wisdom is sometimes invoked when the usual disaster happens and the hunt is set off for individuals as scapegoats. It's all very well to blame it all on the Pied Piper, who is of course entirely guilty, but in this case his followers are free agents.
   
   This great sage has now left us, aged 98 and apparently still working on another book when the end came. The collective folly that he pillories here lives on. Dare we hope that his wisdom, never perhaps so well expressed, may live on and flourish as well?



2. John Kenneth Galbraith's short, literary book on financial speculation and the inevitability of subsequent economic catastrophe contends that devastating financial collapse is built into the free-enterprise system - an idea as intriguing today as it was when this book debuted in the mid-1990s. The late famous economist ended this treatise with a chilling question: "When will come the next great speculative episode and in what venue will it recur?" Everyone now knows the answer to that question all too well. Alarmingly, according to Galbraith, the travails that capitalist economies are now grimly experiencing will recur over and over. getAbstract suggests that anyone who wants to understand the kinks in the system - and human nature - that will continue to lead to hugely devastating, economic train wrecks should read Galbraith's book.



3. I enjoyed reading this book: it explained in simple and plain terms the origins of the major financial crisis over time. It also stressed out which are the common mistakes behind each of them, how people tend to forget the previous financial meltdowns and why they do so. It is a good introductory reading for anybody who wants to have some background on this topic without having to deal with more complicated technical details.



4. This tiny but hugely important book predates the current financial crisis by several decades, and predicted it perfectly.
   
   Galbraith tells us, simply and clearly, that the same thing happens over and over again, and he explains why. The thing that happens is that people discover that they can increase their profits with leverage: if you own a $1.00 item that appreciates to $1.10, you make a $0.10 profit, but if you can add $9.00 of borrowed funds to your $1.00 and buy 10 items, you can multiply your gain by a factor of 10.
   
   Of course, the same thing works in reverse too: if the item drops to $0.90 you're completely wiped out, and if it drops to $0.80 whoever loaned you money gets pretty unhappy too. Given the obvious increased risk of taking on leverage, the key question is why people keep rediscovering the profit side of the equation and reforgetting the risk side. Galbraith has an answer: every new bubble includes a new form of the argument "this time it's different." Here's the crucial observation: the very fact that people are saying "this time it's different" is what makes it exactly the same as every other time. The "new new thing," the "long boom," I-can-always-refinance-next-year, and so on, have historical analogs every few decades back as long as there's been finance. We really never learn.
   
   It's amazing how quickly the real estate bubble followed after the dot-com bubble, and how both of them occurred in an era when the pattern has been so perfectly analyzed and explained. This book was written before a lot of today's behavioral economics work; perhaps these new tools will finally point to how we can avoid the next event? It's nice to hope anyway, I confess I'm not holding my breath.



5. This book is a must-read for understanding the current economic situation. The 1990s tech bubble, which turned into the housing bubble, was just a classic case of a financial bubble. In each case, they all thought they were smarter than previous generations, and that somehow the "New Economy" had changed the rules. The end result was always a financial depression that sometimes lasted for decades.
   
   Rather than head scratching about "what happened", which is also a classic response to the bubble bursting, reading a bit of economic history shows that this is nothing new, and that our generation and our nation is not immune from typical human economic behavior.

No comments about Markets 101/Insights into Understanding the Inner Workings of Financial Markets.

5 comments about The Complete Guide to Spread Trading (McGraw-Hill Traders Edge Series).

1. My name is -oo0(GoldTrader)0oo- Amazon will not let me hook up this post with my other lists. So when you do a search add this one to those. Amazon sucks!!
   
   Complete Guide to Spread Trading by Keith Schap
   ISBN: 0071448446
   
   The greatest American chess champion still alive once wrote a book on how to play chess. After explaining the game, he simply teaches you how to kill. Similarly Ross's Spreads & Seasonals teaches the game simply, and dives straight to the heart of how you can place your first winning seasonal spread trade.
   
   Mr. Schaps textbook is much more complex. It is written for the already active trader, who may want to switch to or try new spreads. Advanced traders, practicing spread traders, mathematicians, and employees of hedge funds and financial firms, will find this book useful. As a result it covers everything, and updates the older spread books into this century. Mr. Schaps works for the CBOT. He does not see a conflict of interest is suggesting that traders rely on brokers for research, I do.
   
   The author explains spreads from the left hemisphere of the brain. Anything that can simply be shown to both sides of the brain in a picture, graph or chart, is instead reduced to a complicated array of digital formulas and intricate equations.
   
   "Spreads ... produce better results than outright trades in futures or stocks."
   
   General principles as well as advanced ideas in the various ways to spread are taught. You do not have to read it straight through, but you can move to the areas that address your current interests. Besides futures, he goes on to cover Option spreads.
   
   "Spreads trade around long term means ... they work back towards the mean."
   
   Instead of using the normal spread charts, where all a trader has to seek is the spread differential to go up. Schaps takes it two levels deeper with exhibits of columns of numbers, formulas, and statistics. If you don't use arithmetic every day, run far, far away from this book and its complicated mathematical explanations of otherwise simple concepts.
   
   "It is a good idea to focus on the spread as a whole, not on the individual legs of the spread."
   
   In normal spread teaching, the long contract is stated first the short second. Schap because he is using rows of numbers, has to remind you what is widening and what is narrowing for each type of commodity. You buy the widening or sell the narrowing. Any mix up as to what widening means and you can find yourself on the opposite side of the spread.
   
   "A valid spread must have a structure that ties it to the economic reality you are trying to capture."
   
   While other writers may use simple charts showing the historical tendency. Schap examples show a much shorter period of only one or two years. Where Schap does use charts, he shows two lines instead of one. Usually he uses exhibits with columns of numbers, as an alternative to charts.
   
   "Price has no history. Only spreads have history."
   
   Spreads carry messages about how the market needs to draw supplies into and out of storage. "The price differentials of the spreads help the markets to regulate the flow of goods into and out of storage." A carry (contango) market (price plus storage), wants product to go into storage. An inverted (backwardation) market (penalizes storage), wants product moved out of storage.
   
   Schaps dispenses with the confusing terms of inter and intra delivery, but uses terms like "cointegration," and "yield curve shift."
   
   A "Normal yield curve shows a healthy economy, inverted curve, near yield higher than far yield shows slower growth. How it is changing widening or narrowing is the question. When it is widening suggests increasing demand for credit. When the yield curve is narrowing, suggests that the fed is cutting back on the amount of credit it is creating relative to the demand for credit."
   
   Because spreads isolate the effect of change in the width of the yield curve spread. Yield spreads carry information in advance.
   
   Unlike many spread books that may suggest vague trade dates, for spreads. Schaps has an overview and advanced concepts of spread groups for traders to refer to before making a spread trade in a new commodity. He takes you to deeper layers with the widening, & narrowing. Deeper still the effect it has on storage.
   
   Many spread books have been criticized for using optimized trade dates. Schaps often uses unoptimized exchange expiration dates to exit many of his spreads examples.
   
   Many books may have a chapter about spreads. Only a handful of books are about spread trading. Anyone who takes trading seriously would want to have access to all of the Spread Trading books in his personal library. One successful spread trade could buy the whole lot! In a case like that, Schaps book must be included. " The Complete Guide," is not for the beginner or uninitiated trader. As a preview to the experienced mathematician about to trade a new futures group "The Complete Guide to Spread Trading," by Keith Schap is indispensable..



2. I have been trading futures for about 3 years, and wanting to learn more about spread trading. This book is very dry reading, and difficult for a beginner to go through. No color graphs. Just boring tables with numbers, and many words. Not an easy book for a visual learner. Seasonality is hinted upon, but no good charts provided, and he does not really tell you when to do what, or what triggers or conditions to look for to enter a position. His section on spread options trading is perhaps easier to grasp, and I did learn a bit from that. A more advanced trader might perhaps glean more from this book than I did, but I do not recommend it for the beginner.



3. I have yet to read this book, however, so far the ***** average rating is quite suspicious... Each one of the three *****-reviewers, does not have a single other review in their profile. I am at the stage where I am trying to learn as much as possible about spreads' trading, so I would greatly appreciate if someone who actually has real-life experience trading futures spreads and who has also read this book, to do everyone of the rest of us a favor, and post an honest review - please, we need a counterbalance to the nonsense posted by those who are most likely associated w/ the author or his publisher...



4. The best book I have seen on spread trading. Many successful commodity traders trade spreads - and why not - spreads provide profit opportunities, typically with lower risk than trading outrights. Schap has written an informative book that will teach spread trading basics to beginners and probably teach the veterans a few new tricks. Also, you will have a few laughs in the process.



5. A complete and lucid presentation of the benefits of spread trading. Keith Schap does a stellar job of gleaning all the essentials of spread trading. I have read some of his previous publications ("7 Indicators that Move the Market" as well as numerous articles written for industry journals) and this is a great addition to his body of work. The subject is presented in a clear an entertaining way. It is a 'must own' for anyone who is serious about taking advantage of the profit potential that spread trading provides.

3 comments about Evaluating Hedge Fund and CTA Performance: Data Envelopment Analysis Approach + CD-ROM.

1. I am always on the lookout for new quantitative methods to complement my portfolio optimizers. I found this approach pretty novel. It seems to do a good job at identifying efficient funds from the non-efficient ones. Great stuff, thanks guys.



2. The minute I got the book I went directly to the CD to do all my consulting work. Thanks to the CD I made over $125,000 US in one week consulting using this software and providing DEA scores of every hedge fund in my hedge fund database for a well-known fund of hedge funds. It paid off my mortgage!!!!!!!!!!!!!!
   
   
   
   DJ



3. The book applies an operations management method - data envelopment analysis - to evaluate the performance of hedge funds and CTAs. DEA is a multi-variate non-parametric linear optimization method that quantifies the relationship between multiple inputs and outputs. The method has been widely used in operations management, but in finance, investment management and portfolio selection, its use is nascent.
   
   The authors provide a rapid introduction to DEA. I found it shallow. For anyone needing a comprehensive, deeper, and more correct understanding the material, I would strongly recommend Zhu's "Quantitative Models for Performance Evaluation and Benchmarking", where the careful derivation of the various approaches offers a good understanding of the functional definitions of his approach. Chapters 6 to 9 provide the empirical analysis of performance using hedge fund and CTA data. The introductions are brief and most of the text is tables with results. I would prefer to have seen a deeper explanation of the methods and why particular methods are more appropriate for the selection of particular performance assessment. The multivariate approach is unique and potentially useful when optimizing a portfolio given certain sets of multi-collinear constraints. What this book lacks is a deeper analysis of this particular application.
   
   The book comes with a CD that contains Zhu's DEA-Solver. This handy Excel add-in is useful in creating DEA analysis.
   
   I have used this approach for portfolio performance evaluation and found Zhu's previously mentioned book more useful than this book. In my work, I wanted to find that combination of assets with the most efficient upper and lower partial moment distributions in a potential portfolio. It worked reasonably well, slightly better than a regression approach. For the novice DEA user, my recommendation is to use this book as an outline, but refer to Zhu when creating the analytical framework and applications.

4 comments about Electronic Currency Trading for Maximum Profit: Manage Risk and Reward in the Forex and Currency Futures Markets.

1. As the author of the book, I am pleased to note that three executives from respected and prominant forex institutions all have endorsed my book, Electronic Currency Trading for Maximium Profit. They are with Gain Capital, Midas Forex and GCI.
   
   Apart from their professional status, they are, of course, informed on the subject, unlike a couple of reviewers who took the time to expose their lack of experience in forex.
   
   I assume if they are buying books on forex trading, that they are in the learning process at some level.
   
   Between them and those who have publicly endorsed the book, I believe I will take the forex institutions.



2. This was a huge disappointment. The book is simplistic, disjointed, and offers nothing that even a novice could use. It has a feeling of being written quickly to cash in on the forex trading phenomenon. Look elsewhere for advice in particular anything by Jack Schwager or by Wiley Press, they are usually excellent.



3. If you have absolutely no knowledge of the Currency Markets then this book may be useful to you. The subtitle of the book is "Manage Risk and Reward in the Forex Markets by Learning How to:..."

   Unfortunately, the overwhelming majority of the book is about Currency Futures and Options but NOT Forex.




4. This book is not worth the paper that it is printed on. Author does not know the subject, and does not offer any information that could not easily have been obtained online for free. Tried to contact author at his website to answer question and never responded. Classic example of take the money and run. Will never buy a book again from these authors nor from Prima Publishing.