Book Bits For Friday: 4.22.2011

The Strategic Dividend Investor
By Daniel Peris
Summary via publisher, McGraw Hill Business
There’s a big difference between investing in the stock market and investing in companies through the stock market. The Strategic Dividend Investor shows you why, over the long run, investing in companies with high and rising distributions is far superior to “playing the market.” Responsible for $4.5 billion in dividend-anchored portfolios, Daniel Peris demonstrates that, for most investors, buying a stock in the hope of making a quick buck by selling it in a few weeks or months is far from the best way to create wealth. Instead, you should use the stock market as a means of receiving a share of excess profits—dividends—from corporations in which you own stock. Over time, those payments—and the growth of those payments—represent the vast majority of stock market returns.

Debt, Deficits, and the Demise of the American Economy
By Peter J. Tanous
Peter J. Tanous and Jeff Cox
Excerpt via publisher, Wiley
Here’s the problem. About 40 percent of our federal debt is scheduled to mature by midyear 2011. Seventy percent of the debt will mature within five years. If investors smell even a whiff of inflation, they will demand higher interest rates when the government attempts to roll over (reissue) the debt as it matures. And since so much federal debt is maturing within the next few years, it is very important to keep interest rates low in the short term. For a strategy of “inflating our way out of debt ” to work, we would need to have a much higher proportion of long-term debt to short-term debt. Indeed, we can ’ t infl ate our way home if infl ation causes us to roll over existing debt at much higher interest rates. Doing that just makes a bad problem even worse. Moreover, we also have TIPS bonds, which are Treasury bonds that adjust for inflation. These would react swiftly to a rise in infl ation since the principal amount on these bonds is adjusted for infl ation every six months. At this point, however, inflation-adjusted bonds (TIPS) account for only 7 percent of the total. The fact that 40 percent of outstanding Treasury securities will mature in 2011 sets the stage for the crisis. But in our view, the chain of events leading to a world stock market crash will start not in the United States, but rather in Europe.
The Blind Spot: Science and the Crisis of Uncertainty
By William Byers
Summary via publisher, Princeton University Press
In today’s unpredictable and chaotic world, we look to science to provide certainty and answers–and often blame it when things go wrong. The Blind Spot reveals why our faith in scientific certainty is a dangerous illusion, and how only by embracing science’s inherent ambiguities and paradoxes can we truly appreciate its beauty and harness its potential.
Crackling with insights into our most perplexing contemporary dilemmas, from climate change to the global financial meltdown, this book challenges our most sacredly held beliefs about science, technology, and progress. At the same time, it shows how the secret to better science can be found where we least expect it–in the uncertain, the ambiguous, and the inevitably unpredictable. William Byers explains why the subjective element in scientific inquiry is in fact what makes it so dynamic, and deftly balances the need for certainty and rigor in science with the equally important need for creativity, freedom, and downright wonder. Drawing on an array of fascinating examples–from Wall Street’s overreliance on algorithms to provide certainty in uncertain markets, to undecidable problems in mathematics and computer science, to Georg Cantor’s paradoxical but true assertion about infinity–Byers demonstrates how we can and must learn from the existence of blind spots in our scientific and mathematical understanding.
Climate Capitalism: Capitalism in the Age of Climate Change
By L. Hunter Lovins and Boyd Cohen
Excerpt via Reuters
The CEOs of the companies implementing greater sustainability in their business practices may not recognize it, but they are following the principles set forth a decade ago in this book’s predecessor, Natural Capitalism. These principles have proved to be some of the best guides a company can use as it embraces sustainability in its own operations. They also represent a roadmap to a sustainable economy.
The first principle, buying time by using all resources as efficiently as possible, is cost-effective today and is the best way to address many of the worst problems facing humankind while delivering premium returns on investments. There are many smart companies implementing this principle, from measuring and managing their carbon footprints with the Carbon Disclosure Project, to Mi Rancho Tortilla’s saving $175,000 a year by implementing efficiency measures because it knows it has to do so to meet Walmart’s Sustainability Scorecard. It and the other small businesses participating in Natural Capitalism Solutions’ “Solutions at the Speed of Business” program are enjoying returns on investment ranging from 100 percent to more than 600 percent.
Money: Facts and Figures About Everyone’s Favorite Thing to Do (Everything You Never Knew)
By Sandra & Harry Choron
Summary via publisher, Chronicle Books
Ever made a fast buck? How about traded cowrie shells for a bride or paid for gum with a $10,000 bill? This entertaining and information-packed miscellany explains our fascination with money and how it has shaped our world. Vintage photographs and artwork illustrate surprising facts, lists, and trivia about forgotten financial catastrophes and famous bank robbers, the history of bankruptcy and ancient money gods, wacky cash-related slang and get-rich-quick schemes for the ages. Witty and comprehensive, Money explores the one subject that really makes the world go round.
Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty
By Abhijit Banerjee and Esther Duflo
Review via The Economist
If it is a mistake to equate poverty and dependency, it is equally mistaken to believe the poor will lift themselves up by their bootstraps. The book crosses swords with the business gurus and philanthropists who project their own enthusiasm for Promethean entrepreneurship onto the poor. Yes, the poor are more likely to run their own business than the rest of us. But that is because they have no other choice. When asked, most of them aspire to a government post or a factory job. Developing countries are not full of billions of budding entrepreneurs; they are full of billions of budding salarymen. The authors also dissent from the “melancholy view” held by some economists, who argue that bad politics will always trump good policy. Why bother figuring out the best way to spend a dollar on education, when $0.87 will be diverted into the pockets of officials? These economists argue that you can’t do anything in a country with bad institutions—and you can’t do much about these bad institutions either. You just have to wait for a revolution.