Book Bits |7 January 2017

High Returns from Low Risk: A Remarkable Stock Market Paradox
By Pim van Vliet and Jan de Koning
Summary via publisher (Wiley)
For generations investors have believed that risk and return are inseparable. But is this really true? In High Returns from Low Risk, Pim van Vliet, founder and fund manager of multi-billion Conservative Equity funds at Robeco and expert in the field of low-risk investing, combines the latest research with stock market data going back to 1929 to prove that investing in low-risk stocks gives surprisingly high returns, significantly better than those generated by high-risk stocks. Together with investment specialist Jan de Koning, he presents this counterintuitive story as a modern upbeat stock market equivalent of ‘the tortoise and the hare’. This book helps you to construct your own low-risk portfolio, select the right ETF or to find an active low-risk fund in order to profit from this paradox. And it explains why investing in low-risk stocks works and will continue to work, even once more people become aware of the paradox.

Vampire Capitalism: Fractured Societies and Alternative Futures
By Paul Kennedy
Summary via publisher (Palgrave MacMillan)
This book argues that in recent decades an unrestrained vampire-capitalism has emerged, disengaged from the needs of citizens and workers, leading to a deepening of social class, generational, gender, educational and ethnic divisions. The author explores how our cultural obsession with self-realization undermines our capacity for collective action and ability to confront threats such as climate change and the impact of the rapid advance of technology on labour. Drawing on sociology and political economy as well as worldwide case studies, the chapters interrogate how we arrived at these dilemmas and how we might escape them through establishing alternative social economies.

Central Banks and Gold: How Tokyo, London, and New York Shaped the Modern World
By Simon James Bytheway and Mark Metzler
Summary via publisher (Cornell University Press)
In recent decades, Tokyo, London, and New York have been the sites of credit bubbles of historically unprecedented magnitude. Central bankers have enjoyed almost unparalleled power and autonomy. They have cooperated to construct and preserve towering structures of debt, reshaping relations of power and ownership around the world. In Central Banks and Gold, Simon James Bytheway and Mark Metzler explore how this financialized form of globalism took shape a century ago, when Tokyo joined London and New York as a major financial center.

Tao of Charlie Munger: A Compilation of Quotes from Berkshire Hathaway’s Vice Chairman on Life, Business, and the Pursuit of Wealth With Commentary by David Clark
By David Clark
Summary via publisher (Simon & Schuster)
Words of wisdom from Charlie Munger—Warren Buffett’s longtime business partner and the visionary Vice Chairman of Berkshire Hathaway—collected and interpreted with an eye towards investing by David Clark, coauthor of the bestselling Buffettology series. Born in Omaha, Nebraska in 1924 Charlie Munger studied mathematics at the University of Michigan, trained as a meteorologist at Cal Tech Pasadena while in the Army, and graduated magna cum laude from Harvard Law School without ever earning an undergraduate degree. Today, Munger is one of America’s most successful investors, the Vice Chairman of Berkshire Hathaway, and Warren Buffett’s business partner for almost forty years. Buffett says “Berkshire has been built to Charlie’s blueprint. My role has been that of general contractor.” Munger is an intelligent, opinionated business man whose ideas can teach professional and amateur investors how to be successful in finance and life.

Mindful Money: Simple Practices for Reaching Your Financial Goals and Increasing Your Happiness Dividend
By Jonathan K. DeYoe
Review via Publishers Weekly
One virtue of DeYoe as an author, however, is that he, unlike some purported financial gurus, actually holds a day job as a financial adviser. Accordingly, his advice is more grounded in reality than most and the book is refreshingly devoid of silly savings schemes wherein one forgoes 20 years of lattes in order to retire at age 55. DeYoe doesn’t say anything about financial planning that hasn’t been written before, but his advice is solid, his delivery is assured, and his claim of discovering the key to happiness is surprisingly plausible. Alice Walker contributes a foreword, a rapturous ode to penny pinching entitled “Counting My Eggs,” that alone is worth the price of the book.

Escape from Democracy: The Role of Experts and the Public in Economic Policy
By David M. Levy and Sandra J. Peart
Summary via publisher (Cambridge University Press)
The orthodox view of economic policy holds that public deliberation sets the goals or ends, and then experts select the means to implement these goals. This assumes that experts are no more than trustworthy servants of the public interest. David M. Levy and Sandra J. Peart examine the historical record to consider cases in which experts were trusted with disastrous results, such as eugenics, the regulatory use of security ratings, and central economic planning. This history suggests that experts have not only the public interest but also their own interests to consider. The authors then recover and extend an alternative view of economic policy that subjects experts’ proposals to further discussion, resulting in transparency and ensuring that the public obtains the best insights of experts in economics while avoiding pitfalls such as expert bias.

Economic Modeling in the Post Great Recession Era: Incomplete Data, Imperfect Markets
By John E. Silva, et al.
Summary via publisher (Wiley)
Economic Modeling in the Post Great Recession Era presents a more realistic approach to modeling, using direct statistical applications to address the characteristics and trends central to current market behaviors. This book’s unique focus on the reality of today’s markets makes it an invaluable resource for students and practitioners seeking a comprehensive guide to more accurate forecasting. While most books treat the economy as if it were in a vacuum, building models around idealized or perception-biased behaviors, this book deals with the economy as it currently stands—in a state of recovery, limited by financial constraints, imperfect information, and lags and disparities in price movements. The authors identify how these characteristics impact various markets’ behaviors, and quantify those behaviors using SAS as the primary statistical tool.

Spikes and Shocks: The Financialisation of the Oil Market from 1980 to the Present Day
By Angelos Gkanoutas-Leventis
Summary via publisher (Palgrave Macmillan)
This book proposes that price volatility and speculation in the oil market originate from a decades-long process of financialisation. The author challenges mainstream critical accounts of the market that typically invoke the notion of a global oil shortage and so-called ‘peak oil’ arguments. Instead, he argues that the development of the market has been punctuated by recurring oil price shocks. Chapters examine the evolution of the international oil market and investigate how, and to what effect, the process of financialisation has transformed the structure and dynamics of the global oil market from 1980 to the present day. In doing so, the book suggests that the process of financialisation is both the cause and the proof of a profound change in the structure of the global oil market, that has turned the triangle of producers, consumers, and mediators that characterised the oil market until the 1980s into a four-tier structure through the addition of financial actors.