Customer Reviews

The Strategic Bond Investor : Strategies and Tools to Unlock the Power of the Bond Market

5 star:		(7)
4 star:		(6)
3 star:		(1)
2 star:		(1)
1 star:		(0)

 

 

Unlike books addressing stock market investing, there are relatively few investor-oriented Bond books, probably due to several reasons - (i) bond concepts are somewhat more quantitative compared to stocks, (ii) bonds have no central "bond exchanges" with readily available price quotes, (iii) bonds can't be sold and bought as easily as stocks, (iv) perception is people can't "swing for the fences" with bonds.
However, as the "Strategic Bond Investor" makes clear, it is imperative to become familiar with bond market dynamics to understand how and why interest rates are set, which in turn affects the economy and the stock market. The book does a wonderful job of laying bare the intricacies of the bond market, at the same time stays away from the more technical aspects. The writing style is very engaging, and the content is very organized. The discussion on Bond Types - how big various types of bond markets are and how they got that way, is fascinating. So are practioner-oriented "rules of thumb" permeating several chapters. Chapter on "real yields" was a bit confusing (when inflation is expected to go up or down, why do real yields move as opposed to "expected inflation"?) I initially felt the visual presentation (charts, graphs, tables etc) was somewhat limited, but as the book progressed, it seemed to be just the right amount, and contained a lot of high impact information. There is a good appendix containing a primer on economic indicators. With this, you'd be better able to judge the reaction of the market to CPI, employment, consumer sentiment, etc., etc.
The book seemed somewhat repetitive at places, but still read well. With this book, one should be able to answer: (1) How can bonds be expected to perform given the current economic information, market sentiment, etc. (2) what types of bonds can be expected to do better? I highly recommend the book for purchase. Another great book for the bond investor would be William Gross's "Everything You've Heard About Investing is Wrong!"

By far the best introduction to bonds is Annette Thau's The Bond Book. But Thau makes no attempt to explain why the price of a given bond fluctuates over time. Crescenzi, one of the most frequently cited of the legion of professional Fed watchers, tries to make up this deficiency, describing the impact of Fed moves, market perceptions of the state of the economy, the supply of new issues, etc. on bond prices.
But Crescenzi has a much more ambitious agenda. He explains how the yield curve can be used to forecast developments in the economy. Other chapters summarize how to predict trends within the bond market, from analyzing the put/call ratio to interpreting the economic data that a dozen or more agencies spew out every week. He makes the case that knowing the bond market will be useful to anyone with a credit card in his or her wallet.
Crescenzi also wants the book to serve as a general introduction to bonds. There are chapters on "bond basics," types of bonds, risks facing the investor, and then inexplicably late in the book, chapters on credit ratings and using the internet. The latter is particularly weak chapter (Thau's isn't much better.) For whatever reasons, Crescenzi doesn't explain clearly how to use the internet to research individual bonds and check recent trades, and doesn't give the URLs of the sites that let you do this and purchase bonds.
If it sounds like the book is a bit of a hodge-podge, that's because it is. The book's organization leaves a lot to be desired, apart from the scope being too broad. Not only is the sequence of chapters mysterious, but there's a fair amount of repetition. While the writing itself is pretty lively, or at least conversational, I'm not sure Crescenzi has figured out his intended audience. Even though this is an introduction, some readers are bound to feel he's assuming too little and being condescending at times.
The best chapters are probably 7,8, and 9 on the yield curve, real yields, and rate forecasting. Crescenzi apparently wasn't trained as an economist or historian, and when he tries to describe the effect of interest rates on politics, he goes awry. A big fan of Clinton, he imagines Hoover believed in and practiced "laissez faire" and that budget deficits inevitably result in high interest rates. A chart of deficits as a percent of GDP vs. the yield on the 10 year note would reveal the wrongheadness of this claim. In general, there are far too few charts and graphs thoughout the book. Many more important points ought to be represented graphically--like changes in yield spreads in Ch. 12.
Still another gripe--munis get slighted throughout the book.
Despite these negatives, The Strategic Bond Investor fills an important niche and is definitely worth reading. Crescenzi is an ethusiastic teacher and he makes a fairly complex subject accessible. Though there are certainly books introducing readers to the economic indicators and explaining the Federal Reserve System, I don't know of another book that tries to make the bond market as a whole intelligible to outsiders. Hope he gets a chance to revise this in a second edition.

Although this book contains good information on types of bonds, yield curves and things that affect the bond market and interest rates, I found it disappointing. To me, it was overly wordy and sometimes repetitive. At times, I felt that I was slogging through molasses. My biggest disappointment was that it did not get into the specific bond investing actions that an individual like myself would take using the information presented. There was nothing about things that I was interested in i.e., bond laddering, bond mutual funds, convertible bonds, when to buy or sell short, intermediate and long term bonds, etc.

The Strategic Bond Investor is much more thorough and relevant than most bond books. Others who commented discussed the lack of certain strategies, but those reviews miss the point. The book offers strategies and insights that are the most important ones to grasp: those which help investors to forecast what to expect next in the bond market. Sure, laddering, and other traditional strategies are important, but they do not represent the path to big money, understanding trends in the markets is far more important and this book is a major help in that regard. Other books are very weak in talking about the things that move markets. For example, there is an excellent section on the inverted yield curve, and insights into tools for tracking market sentiment and how to use futures to gather market intelligence. Mr. Crescenzi works on Wall Street, so his insights are better than anyone on the outside could deliver.

There is also an appendix in the back of the book that gives great insights into the major monthly economic news that is released each month.

The Strategic Bond Investor is far above other bond books and is easy to understand.

I am more than halfway through the book, and thought I would share my thoughts.

First, this book is outstanding in terms of the depth of knowledge imparted. If you want to understand bonds in the context of today's market (especially with regard to the all-important Fed), this book is a MUST read. I am convinced that you will become a better investor. Imagine getting taught by one of the top bond managers at the top bond investment firm in the world! This is just that. So: If you're investing in bonds, this book is very important.

I would just say that this book is not an "idiots" guide. I am an intermediate-level investor, with a good vocabulary and a decent understanding of the financial markets. I feel like it's more of a book to train a professional bond portfolio manager. The math is fairly light (only one bit of calculus is introduced - convexity - and it is not vital to understand it in order to understand the book). However, some of the reading is tedious. I feel like the authors could have the benefit of a professional writer (say, a journalist) edit the book for clarity and simplicity.

That being said, if you really want an exhaustive overview of the current bond market, it's a very good book. It also has invaluable advice on how to understand the current market. Just be prepared to re-read paragraphs as you go through to make sure you understand. Also, there are concepts introduced early in the book (like market/quote depth) which are not explained until later. So if you find yourself confused, just hold on, the author will get around to explaining a term perhaps in the next few pages, or even more fully in a later chapter.

If you are interested in how interest rates are practically determined this is a very useful hands-on book. If you are interested in stock or commodities investing, maybe interest rates are less important, but if you're into forex, interest rates are absolutely essential to understand. You should note that this book is written for a US bond investor audience so it doesn't talk about forex at all.

I know of no better book describing how interest rates are set than this book, so it definitely deserves four stars. That does't mean the book is without weaknesses:
- It is very US focused. I would have liked to see a bit more international focus; especially how interest rates are set worldwide. US is not an island and today it is important to understand interest rates with a bit more global perspective.
- It doesn't contain good references. I would have liked to have a short list of suggested further readings. Sometimes we get recommendations to the author's preferred information. However, often this is to services priced for institutional investors. It would have been nice with the best available options available for free or below USD500 (i.e. for retail investors).
- It doesn't talk much about theoretical economic models and interest rates.

I will skip talking about the positive, because there are not many choices of books. You can also find that info in many of the other reviews.

The Strategic Bond Investor is a very informative book for any investment, bonds or equities. It serves as a good reference for a number of investment topics, topics which are related to judging the current economic condition and climate. However, be forewarned - you might need a degree in finance or economics to get full value from this book.

I am new to bond investing so, I found many of the chapters informative but in a way that I had not anticipated. The book was a lesson on macro economics and judging the bond market not on bond investing strategies as a specific topic(s). Anyone serious about investing will find this helpful, even eye-opening, but you will not find information that will help you develop a bond portfolio. Maybe I should say that you will find information to wisely judge your bond portfolio, but you will not find information as to how to build your bond portfolio. You will learn valuable information about yield curves but you will not learn about how to build a laddered portfolio as a simple example.

The critical thing though is that if one is not well versed in finance or economics, many of the topics will be difficult to understand fully. Useful information abounds but I was left feeling as though I only absorbed 15% of the information covered, if that.

Most of the fixed income books just cover the mathematical part of the securities, which is important but not sufficient enough for the trading floor terminologies.

"The Strategic Bond Investor" because of its nice top-down approach helps in understanding the whole economic process. The coverage of the Federal Reserve system and how it manages interest rates is great. Also, the yield curve analysis and spread analysis and their historical/ political significance is awesome.

I really found the detailed overview of the various important economic indicators very helpful.

Again, the book has been written in a way that helps one to become part of the day-to-day happenings in the economy and to understand micro picture from macro level.

The Strategic Bond Investor does a great job by educating people both on the Wall Street and on main street.

Reading this book was so boring it was like... Well it was like reading a book on strategic bond investing. That being said it had a wealth of information. The price I got it for used was well worth the Fed speak chapter, and the detailed explanation of the various monthly economic data (employment, housing starts etc). Also each chapter has a summary that is helpful if you are just scanning the book. For non bond investors it is quite good to have for reference.

This book is worth the money, it belongs on your bookshelf next to Malkiel's Random Walk down Wall Street. Anthony Crescenzi leading fixed income analyst at Miller Tabek and creator of Bondtalk does an excellent job with this work. I myself received my undergraduate degree in Finance and was honored to participate in my university's first two invitations to the Federal Reserves education challenges for undergraduate and high school students.

I found this book an extremely good reference, outline and compandium for the understanding of fixed income investment vehicles and the economic market environment in which they exist. This book would be ideal in combination with say the Princeton Professor Malkiels book Random Walk down wall street which explains equities, their analysis and the markets in which they trade.

I would suggest this book to the lay investor who maybe doesnt even manage the majority of his/her asset just to understand the fundamentals. Ofcourse, the world of finance and in my opinion especially fixed income can be the drabbest, greyest, quantitatively complicated and mind numbing topics. But I must say that Mr. Crescenzi breaths a light humor and a little youth into the subject matter.

And to the person with say a degree in business, finance or economics this book elaborates on topics probably already discussed into further detail. After reading the aprox. 300 pages and the appendix entitled a power tool for investors which describes the leading economic indicators and extrapolations one can take from them. The student can expect to be able to render even better analyses of the domestic economy with better understanding of stimuli that effect the price of fixed income securities.

All over this book is great should you be the least bit interested in fixed income it covers all the bases. I am almost positive that you will fail to find a better book on fixed income/bonds out there the man who wrote this is very highly respected in his field and also worth checking out is the website his pioneered bondtalk. Perfect for the financial scientist!!!