Customer Reviews

If It's Raining in Brazil, Buy Starbucks : The Investor's Guide to Profiting from News and Other Market-Moving Events

5 star:		(7)
4 star:		(9)
3 star:		(2)
2 star:		(0)
1 star:		(2)

 

 

This is the best book I've ever read on the topic of interpretations on macro economic factors that drive the market. Many books and textbooks are cut and dry, and in the end they are theories. An example would be: an economic report may come out, but the market is responding in the exact opposite way based on standard economic theory, however the understanding of why the market is reacting in that way requires the correct interpretation based on economic(business) cycles and such. The theories may be correct, however it also depends on other factors as well. The author emphasizes the markets as a chess board rather than a simple checkboard. I for one agree.

I found this book to be very impressive in articulating sources of investment risk, and pointing out how investors using many different kinds of investing approaches can eliminate many of these risks. Whether you are a day trader, or a buy-and-hold type, you will find a least some valuable ideas in this book that will be new to you.

For many new investors, the most useful part of the book will probably be the description of when various industry sectors tend to do well, relative to the economic and stock market cycles.

For experienced investors, insights will probably come from getting some new ideas about managing event risk, being flexible about what financial instruments are bought, and doing pre and post analyses of trades to learn from your decisions. If you get to a section where you are familiar with the issues, feel free to skim forward until you find something that is a new idea for you. Much of the trading information will be old hat to you.

Many investors are unsure what to do with all of that new data that comes out about the economy and specific companies. This book is the best I have seen for helping you connect each item to its potential investment implications. Usually, these implications are at least somewhat indirect. For example, if a company makes a bid for another company, you should consider buying stocks in companies that may be acquired in the future as a response to the first bid.

The book's content covers first "macrowave" risks from inflation, a weak economy, changing interest rates, shifts in productivity, changing budget deficits, the trade balance, government regulation, technology changes, and acts of God (from storms to war to earthquakes). You will also learn how different government theories of economics can affect your investments.

The book's key principles are that you avoid gambling when you are looking for a speculation (take a chance when the odds are in your favor); diversify away from market, sector, and company risk; follow trends regardless of direction, expand beyond stock investing, never fight the trend, match news to economic and sector sensitivities, and look into indirect effects that others may ignore. To do this, you are given directions for how to think about sector rotation, and how to protect your capital.

Each concept is developed with at least one example drawn from actual news stories. Some of these will seem like "no brainers" like buying Starbucks if rain in Brazil breaks the drought that's harming the coffee crop there and has been forcing up coffee prices. Many of the other examples are a little more imaginative and interesting.

Each investor should also remember that almost no one beats the market averages over ten years or more. For the average individual investor, inexpensive indexed mutual funds are the right answer. To make that point more relevant, the professional investors who already know almost everything in this book seldom beat these indexed funds either over long time periods.

Make any attempts to beat the market that you pursue as inexpensive as possible!

The one bad review is clearly sour grapes. Anybody who has worked with Peter, such as taking one of his classes at U.C. Irvine, or even just met him, knows that he's one of the least "Ivory Tower" academics around. In fact, he's one of the few that actually gets involved, and tries to put in to practice what he researches.
That said, the book does offer a broader perspective on how news will move markets, and teaches "chess" strategy as opposed to "checkers". Anyone who is interested in avoiding being blind-sided by world events effects on markets should read this book. It will teach them how to think about these events in a new way.

This book was a very unexpected pleasure. I thought that I would get just a book to help me with my stock market trading. But this book has also helped me sort out all of the various affects of the terrorist attack and subsequent war in Afghanistan on the economy as well. It's a whole new way of thinking about the world. As a long time investor and business executive, I've found that If It's Raining in Brazil, Buy Starbucks useful on two counts. Read it and prosper.

This book has some good information on money supply, various views on economic stimulation, margins affected by commodity prices and more. The problem with the book though is a big one: the author is literally all over the place. His thoughts are not structured enough to make an argument in a compelling rational way. He consistently says things that sound like "you too can make money, here's how!". Then he contradicts himself by claiming that others discount the event-risk based news that he spends so much time talking about in the book.

This book is unorganized, but has some interesting information, although you really need to get through his tiring writing style and structure in order to get to it.

I've read an extensive number of investment books on everything from day trading to futures to options to system trading, etc. This book takes a macroeconomic view of the market and is one I hadn't put too much emphasis on in my trading style. The more I read the book, the more I liked it and found its ideas logical and practical. It is not a "Holy Grail" book but is one that has expanded my knowledge envelope by also considering a macro view and has helped me trade more intelligently. The book describes how external events effect the market and how to take advantage of them. Events such as earnings reports, fed reports, climate events, etc. that definitely do effect on the market. The author tells how to trade in specific ETF's or stocks to take advantage of these events as well as other signifigant things like sector rotation. All in all, a great book.

Very succinct, and to the point.

The book presents a not quite original, however, very well articulated study of examining macroeconomic trends, indicators, and `pure' economics, to add value to investment forecasting and technique.

The work is simply explained, focuses directly on the core issues, and leaves the reader with a thorough understanding of how important macro-trends, sector analysis, and studying economic indicators are to successful investing.

This book is unlike any investment book I've read. It finally explains in quite clear terms how broader events -- what the author calls "macrowaves" -- move the stock market. I'm finding this kind of perspective very helpful in understanding the dramatic fall in the stock market (particularly the NASDAQ) over the last year and half. It should be very helpful in my portfolio planning -- and protecting my assets. I highly recommend it.

Just finished the book today and would comfortably recommend it to beginning and experienced investors and traders. The author does a great job of explaining market cycles, economic indicators, and basic sector rotation. It is an easy read and has good examples of fictional characters and their investment decisions both good and bad.

For ages, humans were trying to figure out a way to predict the future. This book is a continuation of this same old quest. The authors argue that investors and traders can use different events to predict price movements in order to profit from them. This book is more for short-term investors and traders than long-term investors.

However, just because I personally do not believe in what the authors are teaching, I am not going to say that this book did not help me. It did. Most of the investment community is short-term oriented and as a long-term investor, it is extremely useful to understand what indicators or events make prices move up and down. I want to know what my competitors are doing even though I do not agree with them.

- Mariusz Skonieczny, author of Why Are We So Clueless about the Stock Market? Learn how to invest your money, how to pick stocks, and how to make money in the stock market