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Thursday, December 31, 2009

Business/Finance Books of The Year

2009 was a big year for business books although I cannot claim to have read all or even most of them, I have give most of the more notable ones at least a quick review. The two that will be read long after most of the others are :

How Markets Fail by John Cassidy's book is almost 2 books in one. The most valuable first sections is a comprehensive intellectual review of the schools of economics that explain that the market doesn't always 'get it right". Most notable is his part in the revival of interest in Hyman Minsky who wrote decades ago about patterns of credit bubbles. The second section is a good analysis of the current financial crisis. At a minimum, grab a latte in your bookstore and read the introduction.

The Myth of the Rational Market by Justin Fox. This book is a great complement to Cassidy. Fox does much the same thing as Cassidy but concentrates on the field of  finance rather than macro and micro economics. Fox traces the growth of quantitative finance, the belief in efficient and rational markets and the real world and intellectual challenges that  have arisen to challenge it . A particularly attractive part of the book is that Fox was able to interview so many of the participants in these debates.

Both these books succeed in explaining complex concepts in a way that is accesible to the general reader and yet they are useful to the specialized reader. And in the spirit of their (and my) skepticism of the "physics envy" in academic finance and economics the authors manage to explain everything without a single equation !

Both these books are on the syllabus of my investment management course.

Happy New Year

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