Order from a Major Online Bookstore
Ultimate Book Price Comparison Engine
Save Your Time And Money
| AnyBook4Less.com | Order from a Major Online Bookstore |
|
| Home | Store List | FAQ | Contact Us | | ||
| Ultimate Book Price Comparison Engine Save Your Time And Money |
||
 |
Title: Beyond the Random Walk: A Guide to Stock Market Anomalies and Low Risk Investing by Vijay Singal ISBN: 0-19-515867-9 Publisher: Oxford University Press Pub. Date: 01 October, 2003 Format: Hardcover Volumes: 1 List Price(USD): $32.00 |
Average Customer Rating: 4.5 (8 reviews)
Rating: 2
Summary: Beyond the random walk, the path is rocky.
Comment: This is a very interesting and clearly written book. From an academic standpoint, it effectively digs some dent in the Efficient Market Hypothesis. The author addresses ten classic situations, some of them well known, when markets are not efficient.
However, the author does not make a convincing case that retail investors can exploit these inefficiencies efficiently. In other words, the anomalies the author depicts amount to separate trading strategies which should potentially help you achieve the "buy low - sell high" optimum. However, these trading strategies are associated with much higher transaction costs and taxes than a buy-and-hold strategy of an index fund. Additionally, some of these strategies are very labor intensive and information intensive. These are added costs. Finally, these strategies will cause you to cash out of the market frequently. The holding of cash balances will further reduce your return compared to investors who remain fully invested.
When all is said and done, will you come out ahead exploiting these market anomalies after you factor all added costs? The author stated that he "generally" does come out ahead of the market. However, he does not support this vague statement with any documentation. Also, he adds that going forward his strategies may be less effective because of ever changing market conditions. Thus, once a market anomaly is exploited by a few investors, the market's ever evolving efficiency erases this anomaly.
Although the book is very interesting, it is no substitute to sound investment strategies based on the Efficient Market Hypothesis. It is a far safer and easier to profit from the market's overall efficiency than to attempt to profit from its few and fleeting marginal inefficiencies.
If you are interested in this subject, I strongly recommend the classics by Burton Malkiel: "A Random Walk Down Wall Street" and "The Random Guide to Investing." I also strongly recommend John Paulos excellent "A Mathematician Plays the Stock Market." These books all suggest that you are better off focusing your energy on proper asset class diversification that reflects your risk tolerance. And, in turn invest for the long term through index funds of these respective asset classes.
Rating: 4
Summary: A Bit Deceptive
Comment: This book is more academic than practical, which is not a bad thing. I enjoyed reading it and found it to be well researched and very educational. Just remember, however, that any systematic strategy that makes money in the stock market will become ineffective as soon as it becomes well known (anyone remember "Beating the Dow" or its offspring, "The Foolish Four?"). So read this book if the topic interests you, but don't expect to cash in by exploting these anomalies.
Also, A Random Walk addresses some of these anomalies and explains why, given transaction costs among other things, one cannot profit from them.
Rating: 5
Summary: Detailed and Useful Trading Strategies....
Comment: The financial markets give investors a chance to make money when they work - and when they don't. When markets work efficiently they uncover the true value of an asset by pegging its fair price for informed buyers and sellers. When for a variety of reasons markets are inefficient they misprice assets. When the specific circumstances of that mispricing are recognized and persistent (viz. predictable) it is an anomaly. The regularity of anomalies offers investors, at least in theory, the opportunity to profit by taking a position that recognizes the temporary nature of the mispricing before it rights itself. These anomalies are the subject of Singal's study which takes its title from the updated 1970's classic exposition of the efficient market hypothesis by Princeton Economics professor Burton Malkiel.
This is a detailed look at ten market anomalies. Singal's goal is to move us well beyond descriptions and academic evidence and offer trading strategies intended to achieve an outsized market return. Each chapter summarizes key points and projects potential returns from implementing the outlined strategy. Additional market anomalies are briefly identified in the final chapter. As a bonus of sorts an appendix gives the most detailed explanation of short selling I have read.
From a practical standpoint some anomalous situations would appear to be more exploitable than others. Mergers between public companies occur with some frequency, so an understanding of how to play the merger premium paid by acquiring companies for their target is useful. Changes to the composition of the S&P 500 Index and their impact on stock prices occur with less frequency, but this is balanced by opportunities from the January and "New December Effect" (mark your calendars). From anecdotal observations, I am not convinced by the author's discussion of the Weekend Effect, and the chapter on International Investing seems like a fair argument for diversification rather than an anomaly. The so-called Value Line Enigma identified in the final chapter is perplexing to this reader, since the supposed outperformance of their recommended stocks runs directly counter to a similar study of mutual funds picked by Morningstar. An apples to oranges comparison to some, perhaps, but it is a sufficiently known study to warrant comment. A chapter dealing with currency forward rates will be beyond most non-professional investors. I would have liked to have heard more about spin-offs, the long-term overperformance of "independent" subsidiaries occasionally distributed to shareholders of a parent company. Singal identifies the simpler, "sharper" corporate mission as the reason. Actually, it may be strong sponsorship and generous, upfront management incentives which spark those returns.
The question remains, does this serious academic study offer practical trading strategies to investors bent on gain. The answer is that Singal has so many ideas packed into the book that investors will be influenced in the aggregate in their trading decisions. Not to be aware of these market biases exposes traders to more uncertainty and risk than may be necessary.
 |
Title: Practical Speculation by Victor Niederhoffer, Laurel Kenner ISBN: 0471443069 Publisher: Wiley Pub. Date: 21 February, 2003 List Price(USD): $29.95 |
 |
Title: A Random Walk Down Wall Street: Completely Revised and Updated Eighth Edition by Burton G. Malkiel ISBN: 0393325350 Publisher: W.W. Norton & Company Pub. Date: January, 2004 List Price(USD): $17.95 |
 |
Title: Trade Like a Hedge Fund : 20 Successful Uncorrelated Strategies & Techniques to Winning Profits (Wiley Trading) by James Altucher ISBN: 0471484857 Publisher: John Wiley & Sons Pub. Date: 20 February, 2004 List Price(USD): $59.95 |
 |
Title: Stock Trader's Almanac 2004 (Stock Traders Almanac) by Jeffrey A. Hirsch, Yale Hirsch ISBN: 0471477540 Publisher: John Wiley & Sons Pub. Date: 03 October, 2003 List Price(USD): $34.95 |
 |
Title: It's Earnings That Count : Finding Stocks with Earnings Power for Long-term Profits by Hewitt Heiserman Jr. ISBN: 0071423230 Publisher: McGraw-Hill Pub. Date: 21 November, 2003 List Price(USD): $27.95 |
Thank you for visiting www.AnyBook4Less.com and enjoy your savings!
Copyright� 2001-2021 Send your comments
