A Decade of Delusions – From Speculative Contagion to the Great Recession
From Speculative Contagion to the Great Recession
Gebonden Engels 2011 9781118004562Samenvatting
The proven strategies rational investors require for success in an irrational market
When the dot–com and real estate bubbles of the 1990s and 2000s burst, few were spared the financial fallout. So, how did an investment advisory firm located in Elkhart, Indiana one of the cities hit hardest by the economic downturns not only survive, but also thrive during the highly contagious speculative pandemics. By remaining rational. In A Decade of Delusions: From Speculative Contagion to the Great Recession, Frank Martin founder of Elkhart, Indiana′s Martin Capital Management offers a riveting and real–time insider′s look at the two bubbles, and reflects on how investors can remain rational even when markets are anything but.
Outlines strategies the average investor can use to wade through the endless news, information, and investment advice that bombards them
Describes the epidemic of market speculation that gradually infects feverish investors
Details how investors can spare themselves the emotional devastation and accompanying paralysis resulting from shocking financial losses
Investors are still reeling from the instability in the market. A Decade of Delusions: From Speculative Contagion to the Great Recession provides the information investors need to achieve safety, liquidity, and yield.
Specificaties
Lezersrecensies
Inhoudsopgave
<p>Preface xvii</p>
<p>Chapter 1 Lead Us Not into Temptation 1</p>
<p>May Reason Prevail 2</p>
<p>Patience and Persistence 6</p>
<p>The Dean of Wall Street Revisited 12</p>
<p>The Investor s Dilemma 19</p>
<p>It s a Numbers Game 20</p>
<p>The Supremacy of Earnings 22</p>
<p> Stealth Compensation 36</p>
<p>Conclusion 42</p>
<p>Chapter 2 Techno Babble, Techno Bubble 43</p>
<p>A Tale of Two Markets 45</p>
<p>Back to the Future? 53</p>
<p>Warren Buffett on the Stock Market 58</p>
<p>Is the Internet the Answer? 65</p>
<p>What s a Long–Term Investor to Do? 68</p>
<p>Investment Redefi ned 69</p>
<p>Chapter 3 Pop!! .com 75</p>
<p>Risk: No Longer an Afterthought 76</p>
<p>Investment Strategy: Is It Time for Technology? 83</p>
<p>Is There a Snowball Rolling Our Way, Gathering Mass and Speed? 87</p>
<p>The Art/Science of Managing Risk 88</p>
<p>Baby Boomers: Whither Goest Thou? 99</p>
<p>The Internet and IPO Frenzy 100</p>
<p>Fool s Gold 101</p>
<p>Goliaths Slain 102</p>
<p>Chapter 4 Swimming against the Current 113</p>
<p>Prelude to Our Investment Strategy 116</p>
<p>Interest Rates: It Had Better Be Uphill from Here 127</p>
<p>The Power of Popular Delusions 131</p>
<p>The Mind of Crowds 139</p>
<p>Investment Consultants: The Great Middleman Myth 142</p>
<p>Chapter 5 The Greenspan Put . . . Again 145</p>
<p>Investment Strategy 146</p>
<p>The Reckoning 149</p>
<p>Sober in the Morning 151</p>
<p>Micro versus Macro 151</p>
<p>The Margin–of–Safety Paradox 153</p>
<p>Waiting Patiently for Those Hanging Curves 154</p>
<p>Chapter 6 Only Fools Rush In 159</p>
<p>The Rogues Gallery, 2003 Vintage 160</p>
<p>Making Progress in the Post–Bubble Environment 164</p>
<p>How Did We Get Here in the First Place? 171</p>
<p>The Apogee of the Mutual–Fund Boom 181</p>
<p>The Great Abdication of Fiduciary Responsibility: The Defined–Contribution Plan 188</p>
<p>Where the Buck Really Stops 192</p>
<p>Chapter 7 Expanding Concern: A Bigger Bubble? 197</p>
<p>Maybe the Markets Are Not Random? 200</p>
<p>A Short History of Financial Euphoria 218</p>
<p>Fully Deluded Earnings: Penance (?) in the Cuff–Links Cooler 222<br /><br />Run for the Roses: Of Pawns, Guinea Pigs . . . and Retail Investors 231</p>
<p> Swing, You Bum! 242</p>
<p>Marathon Endurance 247</p>
<p>Chapter 8 What History Teaches 253</p>
<p>Free Markets: Popular Delusions and the Madness of Crowds 254</p>
<p>Aspiring to Rationality by Overcoming Heuristic Biases 257</p>
<p>Today Is Not Tomorrow: Cycles and Differing Opportunity Sets 259</p>
<p>Inverting the Traditional High–Risk/High–Return Paradigm 260</p>
<p>The Inevitability of Regression to the Mean 261</p>
<p>There Are No Called Strikes in the Investment Ballgame 263</p>
<p>Focus on the Important 264</p>
<p>The Malevolent Mathematical Mystery of Modern Money Management (a.k.a. MPT) 264</p>
<p>The Absurdity of the Collective Wisdom of Individual Irrationality 265</p>
<p>Diversification and the Myth of Safety in Numbers 266</p>
<p>The New–Era Error 268</p>
<p>Chapter 9 Contagious Speculation 269</p>
<p>The Means to the End 271</p>
<p>The Perfect Storm? Viewing the Vista through the Lens of History 272</p>
<p>The Blossoming of the Financial Economy: The Cataclysm in the Creation of Credit 281</p>
<p>Bubbles Are Indigenous to the Financial Economy 299</p>
<p>If Housing Prices Roll Over 306</p>
<p>A Remarkable Story of Risk Management Run Amok 310</p>
<p>The Perfect Storm Redux 325</p>
<p>Capitalism: When Financial </p>
<p>Overwhelms Commercial 329</p>
<p>Minsky: A Prequel? 332</p>
<p>The Evolving History of Economics and Finance: Reflections 334</p>
<p>Chapter 10 The Tipping Point 339</p>
<p>Excerpt from Quarterly Capital Markets Review, July 2007 341</p>
<p>Draft of Letter to MCM Clients, July 2007 342</p>
<p>Quarterly Capital Markets Review, October 2007: What s Up, Doc? 348</p>
<p>Cyclical or Secular? The Current Crisis in the Larger Context of Cause and Effect Connecting the<br />Dots through Time 350</p>
<p>The Misalignment of Incentives and the Opaque World of High Finance 352</p>
<p>Edging toward the Precipice 360</p>
<p>The Simple Question Why? 362</p>
<p>An Early Epitaph for the First Decade of the New Millennium 363</p>
<p>Credit–Default Swap Alchemy: Transmuting Junk into Gold 371</p>
<p>Counterparty Risk 376</p>
<p>Chapter 11 The End or the Beginning? 381</p>
<p>Origins of a Crisis: Decoupling Risk and Return 384</p>
<p>The Question on Which the Future of Investment Hangs 388</p>
<p>The Stockdale Paradox: What Do Survivors Have in Common? 389</p>
<p>Know Thyself 390</p>
<p>Harsh Realities and the Snowball Effect 394</p>
<p>The Future of Risk Aversion 400</p>
<p>Price Is What You Pay, Value Is What You Get 404</p>
<p>The Lost Decade 407</p>
<p>The Most Powerful Force in the Universe 409</p>
<p>Value Investors: A Rare Breed 411</p>
<p>Risk Once Again a Four–Letter Word? 413</p>
<p>Analysis and Intuition: The Yin and Yang 416</p>
<p>Epilogue This Time Is Different 427</p>
<p>Those Who Don t Remember History . . . 428</p>
<p>The Insidious Disappearance of Accountability 430</p>
<p>The Intersection of the Philosophical and the Pragmatic 432</p>
<p>Respect for Risk . . . Just for a Fleeting Moment 433</p>
<p>Index 437</p>
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