Book Bits For Saturday: 10.29.2011

The Handbook of Equity Market Anomalies: Translating Market Inefficiencies into Effective Investment Strategies
By Len Zacks
Summary via publisher, Wiley
The Handbook of Equity Market Anomalies organizes and summarizes research carried out by hundreds of finance and accounting professors over the last twenty years to identify and measure equity market inefficiencies and provides self-directed individual investors with a framework for incorporating the results of this research into their own investment processes. Edited by Len Zacks, CEO of Zacks Investment Research, and written by leading professors who have performed groundbreaking research on specific anomalies, this book succinctly summarizes the most important anomalies that savvy investors have used for decades to beat the market.

Models.Behaving.Badly: Why Confusing Illusion with Reality Can Lead to Disaster, on Wall Street and in Life
By Emanuel Derman
Review via Bloomberg
Disturbed, disillusioned and ashamed: Those aren’t emotions you expect a Wall Street quant to express when asked why taxpayers were obliged to bail out wealthy bankers. Unless, of course, the quant is Emanuel Derman, a particle physicist and former head of quantitative finance at Goldman Sachs Group Inc. “I am ashamed at the hypocrisies of the system,” Derman writes in “Models.Behaving.Badly,” an erudite yet pleasantly readable exploration of why financial models failed during the U.S. mortgage meltdown and why modelers must learn to use them more wisely. “We were told not to expect reward without risk, gain without the possibility of loss,” he says in disgust. “Now we have been forced to accept crony capitalism, private profits and socialized losses, and corporate welfare.” Unlike many quants, Derman says he wasn’t surprised that models failed in 2007, as events predicted to happen “once in 10,000 years happened every day for three days,” as one strategist at Lehman Brothers Holdings Inc. put it. The breakdown, Derman argues, flows from a misunderstanding of the difference between models and theories.
The Big Handout: How Government Subsidies and Corporate Welfare Corrupt the World We Live In and Wreak Havoc on Our Food Bills
By Thomas Kostigen
Review via The Environmental Working Group
You’d be hard pressed to find a better time to release a book that dissects how federal farm subsidies sent America’s food and farm policies wildly off track. “The Big Handout” hits the stores today (Oct. 25) just as the Congressional Super Committee tasked with reining in the ballooning US deficit is said to be eyeballing farm subsidies as a place to find potential savings. (Of course, we don’t know for sure, because only certain well-connected lobbyists for industrial agriculture get to be in the loop.)
No Fear Finance: An Introduction to Finance and Investment for the Non-finance Professional
By Guy Fraser-Sampson
Review via UK Analyst
To some people the world of finance can be as complicated to understand as medicine or particle physics. This seems sad given that money is a vital part of our everyday lives – unlike brain surgery or splitting the atom. But in No Fear Finance Guy Fraser-Sampson attempts to show that finance is not such a scary subject as it can sound and that anyone can learn to understand it by taking on some basic principals. The book, which after a short introduction to why the subject can be difficult to understand, introduces all of the key topics involved in finance which people should be aware of in today’s world. It starts right at the beginning of the business process, with the various legal structures of enterprise explained. Moving on through basic accounting, bonds, the time value of money, equities and working capital, we then learn about more difficult subjects such as derivatives and the portfolio management concepts, alpha and beta. Each chapter also includes a useful summary section, with the main points of the text presented in an easy to read, bullet point format.
The Legacy of the Crash: How the Financial Crisis Changed America and Britain
Edited by Terrence Casey
Review via London School of Economics
Three years ago the world was gripped by the aftermath of the collapse of Lehman Brothers… Fast-forward to the present and the sense of crisis is no less imperative. However, instead of worries about government inaction, the primary fear is now that the various stimulus package and bailouts have increased the burden of sovereign debt around the world to unsustainable levels. Consequently, despite anaemic growth and high unemployment, the political barometer has moved rightwards in many countries. The Legacy of the Crash: How the Financial Crisis Changed America and Britain, a collection of articles and essays on the effects of the crisis edited by Terrence Casey, attempts to explain these recent political shifts.