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Capital in the Twenty-First Century
Capital in the Twenty-First Century
by Thomas Piketty
Edition: Hardcover
Price: $23.98
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43 of 105 people found the following review helpful
2.0 out of 5 stars Interesting data, really flawed analysis, April 6, 2014
The author aggregates a lot of interesting very long time series going back to the 1700. But, his overall analysis is flawed. His principal argument is that inequality invariably rises in a capitalist society because the return on capital exceeds economic growth. And, that such a condition is a natural consequence of capitalism. But, as we shall soon demonstrate, this is not the case. As a result, Piketty's analysis of the cause of modern inequality is really weak and really pales compared to other authors I'll mention later.

When looking at most of Piketty's graphs going back to the 1700 (graph 3.1 and 3.2 for the UK and France among others), you will notice something striking. Contrary to what his main tenet suggests, the Capital/Income ratio has not steadily risen over time. This C/I ratio was already around 7 back in 1700. If capital indeed grew at an annual rate of 4%to 5%; meanwhile, income grew by only 0.1% over the long term during the preindustrialized era (as he indicates), his C/I ratio should have grown very rapidly by a yearly compounded factor of 3.9% to 4.9% a year. Compounding at just 3.9% per year, his C/I ratio would have risen from 7 to 15 over 20 years and onward to 32 in 40 years (let's say from 1700 to 1740). But, his own data shows this exponential growth of the C/I ratio starting out at 7 never occurred going forward. Looking at his own graphs (3.1 and 3.2), instead the C/I ratio remained perfectly flat from 1700 to 1910. It then abruptly dropped and remained a lot lower because of the shocks of WWI, Great Depression, and WWII. Since, 1950 it has mean-reverted back upward to between 5.5 and 6.5 (graphs 3.1 and 3.2 among others),or not yet back to its somewhat natural state of 7 that prevailed for two centuries (from 1700 to 1910) before the mentioned brutal economic shocks occurred.

Besides the above examples, there are many others when Capital did not grow as fast as Income for several decades. This has been the case in Japan since 1989 to this day. There economic growth has been stagnant, and so has been income growth. But, return on capital has actually been negative ever since. The Japanese market today is still far off from its peak back in 1989. Similarly, in China Capital has not grown nearly as fast as economic growth and Income. The former and latter have increased by 7% to 9% for several decades. Meanwhile, investors' returns have been really lackluster over the same period. The Economist had a fascinating article on the subject fairly recently.

Given the above structural error that Capital does not grow faster than Income over the long term, Piketty's analytical framework fails to explain much of anything regarding the underlying causes of inequality.

Far more insightful authors on the cause of modern inequality include Charles Murray in Coming Apart: The State of White America, 1960-2010 and Erik Brynjolfsson's The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies. The rise of inequality as reviewed by these two authors has not a whole lot to do about capital alone (even though, they do think it plays a certain role). But, it has a lot more to do with our modern society being increasingly efficient at sorting, selecting, and monetizing the value of human capital. And, that's due in good part to the advent of digital technology that allows human capital to be leveraged worldwide far more than it ever has. Their respective analysis on inequality goes far beyond and is far more accurate than anything Piketty states on the subject within "Capital in the 21st Century."
Comment Comments (59) | Permalink | Most recent comment: Apr 18, 2014 5:32 PM PDT

How Much have Global Problems Cost the World?: A Scorecard from 1900 to 2050
How Much have Global Problems Cost the World?: A Scorecard from 1900 to 2050
by Bjørn Lomborg
Edition: Paperback
Price: $31.49
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1 of 1 people found the following review helpful
5.0 out of 5 stars A wealth of information, February 9, 2014
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Just to clarify this is not a book written by Bjorn Lomborg. Thus, you will not find his collegiate friendly writing style (except for his 25 page introduction at the beginning of the book). Instead, Lomborg has aggregated the equivalent of long detailed scientific papers on 10 different subjects written on the history and forecast of various environmental and socioeconomic costs such as air pollution, climate change, malnutrition, and gender inequality (just to mention four out of the 10 costs). Each of the 10 cost working paper is authored by one or more different set of authors. Not a single author has contributed to more than one paper on a specific cost. In total, 21 different social scientists/authors contributed to produce the 10 different papers. Thus, Lomborg has solicited a broad range of opinions.

The cost estimates run from 1900 to 2050 combining a long historical component with a pretty long forecast period. Those costs are often scaled as a % of GDP, which is really useful. There are a lot of related tables and graphs that are very informative, as you can readily observe pronounced long term trends.

The book is very well organized.

Lomborg’s introduction is very informative as it covers a lot of ground by itself on numerous long-term trends. Note that the majority of long term trends reviewed by Lomborg are positive including the exponential rise in economic growth since the 1950s that is not anticipated to slow down (page 4). The risk of death from air pollution is dropping quickly (page 9). Global welfare loss from illiteracy and gender inequality are plummeting (pg. 15) and so are losses due to poor nutrition (pg. 20). Mortality and morbidity related losses are also dropping quickly (pg. 22).

After the introduction, the next 45 pages consist of summaries of the findings on all of the 10 costs. Those are very useful and allow you to extract the main information out of this book without reading the entire 360 pages.

After the introduction and summaries, you have ten chapters each one earmarked to cover a specific cost out of the ten. That is where such cost issue is covered in much greater detail and presented as a scientific paper. Each such chapter is fully referenced with supporting scientific literature relevant to the subject studied.

All in all, this book provides a wealth of information on the subject. The data, information, and findings will most often diverge from the Media coverage that rarely provides a sense of scale on such costs (i.e. something will cost us $10 billion over the next century… is that a lot? Actually, as a % of world GDP over the same period it is close to nothing. But, the Media rarely scales such information).

Healthy Joints for Life: An Orthopedic Surgeon's Proven Plan to Reduce Pain and Inflammation, Avoid Surgery and Get Moving Again
Healthy Joints for Life: An Orthopedic Surgeon's Proven Plan to Reduce Pain and Inflammation, Avoid Surgery and Get Moving Again
by Richard Diana
Edition: Paperback
Price: $14.64
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3 of 3 people found the following review helpful
5.0 out of 5 stars Lots of unique insights, February 9, 2014
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The author is remarkable. Richard Diana is a surgeon who did a lot of research to come up with a program to avoid surgery! That be like a stockbroker recommending you invest in index funds or a lawyer recommending against lawsuits! Things get a bit more complicated because Diana, as an alternative to surgery, is pushing supplement packages on his own website. So, he regenerates an economic interest. But, if a surgeon is pushing supplements to avoid surgery, it behooves us to listen.

Richard Diana imparts a huge amount of information in a user-friendly style. But, the information is dense. Diana graduated from Yale with a double major in biophysics and biochemistry. Thus, his approach to human physiology and nutrition is a lot more scientific (at the molecular level) than is common for lay readers. Diana is aware of that. So, he included an in depth 40 page long scientific section in one Appendix. Still the scientific level in the main text remains amazingly high.

The first part of the book is really the main section. It has excellent chapters on how joints work, why they hurt, and how to take care of them with nutrition, supplements, and exercise. In this section, there is already enough information to make this a good book.

The second part of the book consists in his 8-week program. This section is an overkill as I doubt that that many not under his direct care would have the discipline to stick to it.

The author’s main principle is to reduce inflammation in the body through lifestyle changes that keep inflammation molecular signals dormant. Those are called Nuclear factor Kappa Beta (NFkB). Think of the NFkBs as a red light alarm switch. So, you want to keep that red light (NFkBs) switch off. Inflammation (the alarm) is associated with sugar spikes, insulin reaction, and a whole set of physiological biochemical reactions that impair cartilage, tendons, and ligaments.

By turning the NFkBs off you will reduce inflammation in your body and all its negative impact not only on your joints but also on cardiovascular disease and cancer. Thus, “Healthy Joints for Life” is really “Healthy Life for Life.” Diana has an appendix supporting why this is the case.

The information of this book can be so overwhelming that I’ll give you a couple of short cuts on how to extract a good bit of his insights over just a few pages. Those can serve as excellent references in the future once you have fully read the book and have forgotten a good deal of it.

Regarding nutrition, on page 41 and 42, he covers the essential nutrition concepts to eat healthily. He repeats and tweaks those just a bit on page 190. On page 295 he describes the basic healthy diet as including fiber, fish, white meats, low glycemic index fruits and vegetables. Reduce red meats and processed meats.

Regarding supplements that are good for joints, he has an excellent table summary of those on page 207. That list, however, is still long. He has a streamlined list of those on page 215. He calls it his “Level I stack.” Even though he has four stack levels that add incrementally to an extremely long list of supplements that few would ever follow unless you buy them prepackaged directly from the author; I feel that if you stick to Level I, you may get most of the benefits from his whole supplement program. On page 133, he described that by just giving Omega-3s to his patients with osteoarthritis, he observed 58% of them improving. When he gave them his full stack of supplements (Level I to Level IV), he saw 70% of them improve. Thus, one single supplement provided over 80% of the benefits of the full supplement stack. The Level I stack includes another 9 supplements in addition to Omega-3s. So, if Omega-3s provided over 80% of the benefit of the full I-IV supplement stacks, I have little doubt that Level I alone (Omega 3s + 9 other supplements) would provide over 90% if not 99% of the benefit of the full stacks.

Notice that much of the above is somewhat relative. None of his own studies have any control group. So, you don’t really know the precise answer. Instead, he borrows control group figures from other studies. But, you can’t do that. Control group results are specific to each study and reflect the unique composition of the groups of those studies (age, severity of joint impairment, weight, gender, etc…). Also, he most probably is not able to disaggregate the impact of the supplements alone vs the positive impact from all the other lifestyle changes he recommends (exercise, nutrition). Given all those caveats, I am reasonably comfortable with my rational that the first 10 supplements will provide you as much benefits as adding an extra 20 supplements or so.

Regarding exercise type and schedule, he has an excellent table summary regarding the type of exercise and the frequency of what exercise to do and for how long on page 183.

Diana’s overall recommendations are very attractive because they are moderate. Even though Diana was an extraordinary jock (pro football player on the Miami Dolphin team that made it to the Super Bowl), his exercise routine is very moderate: doing a variety of exercises (aerobic, resistance, and flexibility training) only 4 times a week with 3 to 4 days of rest for a total of 2 and a half hour of exercise per week. He has a great saying: “when there is too much pain, there is no gain.” This replaces “no pain, no gain.”

I also like Diana’s concepts of eating 5 smaller meals a day instead of 3 large ones. This reduces the digestive load, sugar spike, insulin reaction, triggering of the NFkBs, inflammation, and joint pain.

Back to inflammation, health scientists are searching for an overarching inflammation theory that would explain all our modern chronic diseases (cancer, cardiovascular disease, obesity, diabetes) as well as germ theory explained all our contagious viral diseases. I also understand we are not quite there yet. Inflammation is a multi-dimensional physiological phenomenon. In one single article, I counted seven different inflammation theories and none even mentioned Diana’s NFkBs. Those seven theories focused on the following agents: reactive oxygen species (ROS) (theory 1), mitochondria dysfunction (theory 2), oxidative stress (t 3), endocrinosenescence (t 4), telomere attrition (t 5), epigenetic modification (t 6), and C-reactive protein (t 7).

Some of those inflammation theories may overlap. Diana’s NFkBs may trigger the formation of C-reactive proteins that could contribute to telomere attrition? So, none of those seven mentioned theories necessarily contradict Diana’s NFkBs (well supported in the scientific literature). But, this is to say there is a whole lot more to inflammation than NKkBs alone. This is not a criticism of the book that is already almost too complicated as is. Nevertheless, you will certainly benefit from behaving in such a manner as not to turn on your NFkBs switches.

The Road to Recovery: How and Why Economic Policy Must Change
The Road to Recovery: How and Why Economic Policy Must Change
by Andrew Smithers
Edition: Hardcover
Price: $21.88
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3 of 5 people found the following review helpful
2.0 out of 5 stars A castle of charts, January 28, 2014
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This book is a mirage. The author throws at you 125 charts and attempts to persuade you about his strange theory. All our problems and the financial crisis in particular are almost solely caused by the "bonus culture." The latter supposedly causes corporate management to be too short-term oriented, and boost short-term profits at the expense of long-term business investments. In turn, this lack of long-term investments is curtailing long-term economic growth and boosting fiscal deficits associated with unsustainable Government debt level.

The above on the surface may appear appealing. But, if you drill down it does not hold up. It certainly does not explain much of the recent financial crisis and the ensuing large Budget deficits. Here is why. The bonus culture, as described by the author, has been in place for decades. Yet, no such crisis did occur for decades. The financial crisis was caused by a bunch of other reasons than the author's bonus culture. Far better models explaining the financial crisis are Irving Fisher's The Debt-Deflation Theory of Great Depressions published in the 1930s) and Hyman Minsky's credit cycles (developed in the 1960s. Reference: Stabilizing an Unstable Economy). Both economists understand financial crises far better than this author who is obsessed by one single peripheral issue (bonus culture).

Let me point out to another chart underlining the weakness in the author's argument. Chart 12 on page 21 shows an abrupt increase in the volatility of corporate earnings in the decade ending around 2010. This chart, the author thinks, is one of the main data set supporting his argument that earnings have become more volatile because of the bonus culture. But, the bonus culture was already well entrenched as far back as the 1980s. And, the volatility in earnings remained very subdued until the first decade in the 2000s. What happened instead was a classic Minsky moment when home prices stopped appreciating, mortgage refinancing dried up, defaults and foreclosures exploded. Banks' solvency became vulnerable. And, the credit market froze. The rest is history. The volatility in earnings was the result of a classic Boom-Bust credit cycle (too much credit extended to the home sector on the way up and too little on the way down the minute home prices stopped rising. The bonus culture had been in place way before and after the mentioned Boom-Bust. In other words, the bonus culture did not explain anything.

Another chart associated with another major argument that business investment is subpar is interesting. Look at chart 10 on page 15. Do current business investment levels look low to you? No, they are not. Considering we are in the aftermath of a wrenching financial crisis they are actually surprisingly high at or above the historical average near 10% of GDP. But, the author will later replicate this exact same time series but truncate it starting near the peak in the mid 1980s (chart 15, pg. 26) to show a rapidly declining trend. That's cherry picking the data. When looking at the longer data time series going back to 1929, the downtrend in business investment evaporates and so does the author's theory. If business investments are not so high, it is not because of business excess profits, cash flow, or savings as the author maintains... but instead because of excess capacity worldwide. In such circumstances, it does not make sense to invest more.

The author interprets a strong correlation between business savings (net lending) and Government Deficits as meaning that the former directly cause the latter. But, his own chart (chart 7 on page 10) suggests that the causality most probably runs the other way. At least from 1987 to 2001, you can see how the Budget Deficit trend leads by nearly two years the business savings one (and not the other way around).

At other times, the author does not make much sense. On page 67, he states "as inflation has been on a rising trend." That's not the case. Throughout most of the OECD countries inflation has remained extremely low. Instead, the risk of deflation is rising. This has been the case ever since the onset of the financial crisis near 2007. But, the author sticks to his gun that rising inflation is a problem. And, the main culprit as expected according to the author is "the change in management renumeration is keeping inflation much higher than it would be otherwise." As mentioned, inflation is not the issue but the opposite (potential deflation). Given that, the omnipresent "bonus culture" explanation is as flawed and meaningless as ever.

For the record, the author's "bonus culture" has been hammered for several years. A few years back, corporations were forced to recognize the price of executive stock options on their income statement. Ever since such option packages have become far stealthier. Additionally, in the aftermath of the financial crisis, in 2010 the US passed the Dodd and Frank bill, an ambitious financial reform legislation, with severe impact on executive compensation packages including "clawback" provisions on bonuses when earnings are restated. Also, as a result of the financial crisis Wall Street has been pretty much dismantled. Lehman Brothers, Merril Lynch, Bear Stearns were either merged or liquidated out of existence. And, the only two true investment banks, Goldman Sachs, and Morgan Stanley have now a commercial bank charter and are subject to very tight regulations. Wall Street was the champion of the "bonus culture" for decades if not a century. Well, that champion has been seriously emasculated. The author ignores all those facts to write his book about the "bonus culture."

The long-term economic growth challenges do not emanate so much from the "bonus culture" but instead from headwinds associated with population aging, unresolved and unsustainable rising healthcare costs (of the aging in particular), associated rising costs of social entitlements, and attracting and retaining human capital. Those are the prospective cause of unsustainable Debt/GDP ratios going forward. By comparison, the "bonus culture" is a trivial issue that has pretty much been addressed by the mentioned recent legislations.

Business Statistics For Dummies
Business Statistics For Dummies
by Alan Anderson
Edition: Paperback
Price: $17.03
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5.0 out of 5 stars Excellent reference on the subject, January 19, 2014
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The author, Alan Anderson, really knows his stuff as he is a college professor in finance, economics, statistics, and math. He covers a lot of ground, including: probability theory, statistical distributions, sampling techniques, hypothesis testing, and regression analysis.

His “part of tens” at the end covers many of the mind traps of quantitative methods, including: placing too much confidence in R Square (that is one of the most common traps people fall into), confusing causality with correlation (another excellent one), placing too much confidence in forecasts, and using the wrong distributions.

The author’s writing is clear, concise, and easy to understand. This makes for an excellent reference book on the subject.

Your Best Brain Ever: A Complete Guide and Workout
Your Best Brain Ever: A Complete Guide and Workout
by Michael S. Sweeney
Edition: Paperback
Price: $11.67
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1 of 2 people found the following review helpful
4.0 out of 5 stars A pretty good book on the subject, January 7, 2014
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Michael Sweeney does a good job of reviewing all the current research on the subject and imparting the practical knowledge you need to maintain your brain in top shape. Cynthia R. Green insertions illustrating many relevant exercises and lifestyle practices to sustain your brain’s capability are good too. If it is your first book on the subject, this book is great as it thoroughly covers all the basics of good nutrition, exercises (mental and physical), overall lifestyle, and attitude to optimize the sustainable performance of your brain. If it is not your first book, you may find much of it repetitive and overlapping with other materials you have read. This is not the authors’ fault. It is the nature of the subject. Much of what is covered in this book; I had read a couple of decades ago in other books on the subject. They bring in some current research that often just confirms intuitive findings of the past.

Human gastric function;: An experimental study of a man and his stomach
Human gastric function;: An experimental study of a man and his stomach
by Stewart Wolf
Edition: Hardcover
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1 of 1 people found the following review helpful
5.0 out of 5 stars A fascinating historical medical study, January 2, 2014
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I heard about this interesting book after reading the essay written by Scott Tossel "Surviving Anxiety" in The Atlantic that came out in December 2013. Within his essay Tossel refers to this interesting study by two doctors published in 1943.

The subject of the study is the physiological reaction of one man’s stomach. This man (Tom) incurred a childhood accident that impaired is esophagus. As a result, a surgical procedure (gastrostomy) made a hole in his abdomen that communicated directly with his stomach. His mother fed him through this hole (mucosa) for six years from 9 to 15 years old. Thereafter, his mother died. And, he fed himself ever after by chewing his food in his mouth; and, then spitting it out and inserting it in a tube inserted in his mucosa.

Such a condition had profound repercussion on his social life as casually sharing a meal with others was very challenging. Tom’s social world was divided between the few he trusted and could share a meal with and all others he could not share a meal with. With the latter, he remained very private and defensive.

Despite Tom’s mentioned disability, he led a remarkably normal life. He married at 28. He had two kids in addition to three step kids. He remained married to the same woman. And, every indication suggests that for the most part his conjugal and family lives were reasonably happy. Additionally, despite not having gone to school beyond the age of 10, his working life was rather successful. He worked for 16 years for a theater and became stage manager and assistant superintendent. He worked for 12 years for a real estate repair company as a machinist, plasterer, roofer, etc… He did hit hard financial times. At which point he fortuitously meets the two authors of this study. He becomes their lab assistant and guinea pig so to speak. By the time they work together, Tom is already 56. The study, I understand lasted several years. And, although it is not specified Tom seemed to have had a normal life span. In the appendix, the two authors mention a half dozen of documented cases similar to Tom (hole in abdomen, etc…). And, all of them had a normal to long lifespan after incurring their respective accidents.

The study is all about the stomach reaction in response to various external or emotional conditions. The two researchers measure the reaction of the stomach based on two parameters: 1) vascularity (blood flow) measured by the color of the mucosa; and 2) gastric acid secretion. The two researchers did take hundreds of such measurements that were very easy to capture given Tom’s condition. And, the stomach reactions are very differentiated in response to sensation of hot vs. cold (climate condition), hunger, appetite, emotional states (angry, anxious, depressed, relaxed, happy, etc…), various food eaten (fat vs. nonfat). Those three factors (climatic, emotional, and nutritional) interact with each other. They can sometimes compound each other’s impact when they all contribute in the same direction or counter each other when they don’t.

The emotional factor seems almost overriding. The two researchers suggest that any related stomach ailments such as peptic ulcers have a strong psychological component that needs to be addressed for the patient to recover and manage such condition.

Family Wealth Management: Seven Imperatives for Successful Investing in the New World Order
Family Wealth Management: Seven Imperatives for Successful Investing in the New World Order
by Mark Haynes Daniell
Edition: Hardcover
Price: $32.46
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3.0 out of 5 stars The authors can't overcome a contradiction, December 31, 2013
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This is a very in depth book about family wealth management. The two authors are very well versed in every aspects of this complex multi-faceted subject. They impart a ton of information and a lot of reasonably practical advice. Yet, they can’t avoid a pervasive contradiction throughout the book. And, that is, contrary to what they advance, simplicity seems to most often beat out complexity. Let me explain.

The authors make a case that the old approach of investing is dead. By that they mean that Harry Markowitz 1950s Modern Portfolio Theory promulgating asset diversification across just a few publicly traded asset classes is now obsolete. The world is now too complex, moving too fast, with many interdependent risks rendering this approach outdated. The new approach entails investing in many more asset classes including private equity, hedge funds, commodities, real estate, and infrastructure. The focus of their investment return test is the recent financial crisis with the related capital markets downturn (and upturn) from January 2008 to September 2009. On a related graph (pg. 257), they indicated that most asset classes were highly correlated during the downturn. And, that standard diversification did not work…

… Oh really. Notice that in this one graph, the one asset class not shown is bonds. Bonds (outside of the nefarious MBS, CDOs) provided an effective risk cushion during their reviewed period. I checked the record of Vanguard Balanced Index Fund (60%/40% Stocks vs. Bonds; the approach the authors think is so outdated) during this exact same period. And, it preserved capital during this wrenching downturn far better than all the other alternative asset classes the authors showed in their graph. The Economist in a recent article picked up on that too, as it mentioned that the mentioned 60%/40% asset allocation fared far better than hedge funds and private equity during the downturn. In other words, those fancy alternative asset classes did not provide any incremental diversification benefits to the standard 60%/40% asset allocation. This in itself contradicts much of the investment advice that the two authors impart throughout the book. To their credit, the two authors quote a bunch of other experts that state that simplicity most often beats out complexity. Just to mention a few, in the preface Stephen Georges states exactly that (60%/40% did far better during the downturn than most complex diversifications alternatives). Later, Dr. Thierry Malleret (pg. 41-43) states that investors’ success will be enhanced by keeping investment strategies and allocations simple. Later, Robert Maynard (Pg. 163-164) states that a complex world does not entail complex solutions, but just the opposite.

Despite this one major rebuttal to the author’s investment management philosophy, this book is very interesting and imparts a lot of information. Just to mention a few tools and insights I found very interesting: on page 253, the authors share a practical way of estimating bond returns over the next 10 years (just look at their current yield at yearend, and it gives you a good estimate of annual returns over next decade). On page 261, they share a similar method for estimating prospective stock returns as devised by John Boggle (founder of Vanguard). Regarding Private Equity, the authors state this is a 2-tier market. The top 10% of managers can generate Alpha returns. The vast majority of the remainder can’t. I am also wondering how persistent that top 10% of managers is. Once you look this issue, private equity investing may look even more unattractive. The authors advance that the vast majority of wealthy families fail in achieving their goals from one generation to the next. An even greater percentage fails to maintain their financial status over only three generations. This three generation hurdle is true in all cultures and throughout modern times. The authors impart a lot of information regarding dividing your investments into several different buckets (liquidity, medium and long term investing). They call this approach mental accounting. This makes a lot of sense, but in no way does this contradict the Modern Portfolio Theory (even though the authors advance it does).

They come up with numerous 7 steps or 6 steps for successful family wealth preservations in addition to their own. Those are invariably interesting and valuable. As an aggregation, they sometimes feel a bit overwhelming.

There are many more insights within this book than just the few I mentioned. In summary, this is a worthwhile and thorough book. However, you have to withstand the mentioned heavy dissonance throughout the book (simplicity vs. complexity).

Excel 2010 For Dummies
Excel 2010 For Dummies
by Greg Harvey
Edition: Paperback
Price: $17.79
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5.0 out of 5 stars Another excellent software reference, October 31, 2013
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This review is from: Excel 2010 For Dummies (Paperback)
I bought this book given that I was a very long time user of Excel 2003. I never transited to Excel 2007, as many of my colleagues did. And, making the transition from Excel 2003 to Excel 2010 is a heck of a jump. The whole visual interface is pretty different and rather overwhelming. At first, the Excel 2003 user will feel lost within the Excel 2010 visual framework.

The book is excellent in assisting one becoming familiar and ultimately adequately proficient in Excel 2010. The book is clear, well written, organized, and indexed. It serves as a good reference. I have no reservations, and strongly recommend this book.

Yet, ultimately making this shift from Excel 2003 to Excel 2010 is very much a kinesthetic experiences as much as an abstract cognitive one. To use a metaphor, it is like studying a driving manual vs actually driving a car. They are two totally different learning experiences. The latter is more effective than the former. But, the former will nicely assist the latter. So, if you make this 2003 to 2010 jump the best way to learn the program quickly is to use it. Take some time to click on all the tabs, thumbnails, and icons you can. Study exactly what those things do, where those functions are located. I also use a list-system form of learning. This list is taped to the bottom of my computer and it includes about 25 actions and functions that are key to my everyday Excel work. And, the list details the exact tab path where those actions/functions are located.

Each form of learning assists the other. It is a virtuous positive feedback loop. Between the book, the list, and actually playing around the program I am starting to regain my footing nicely within Excel in just a matter of days. If you use similar learning tools and have a similar foundation, your experience should be similar.

If you have some additional good software learning tricks that I am not aware off, please share them within the Comment section of this review.

Venture Capital For Dummies
Venture Capital For Dummies
by Peter K. Adams
Edition: Paperback
Price: $19.45
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3 of 4 people found the following review helpful
5.0 out of 5 stars Covers an amazing amount of ground on the subject, October 4, 2013
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The coauthors from the Rockies Venture Club do an excellent job of introducing you to the world of venture capital and then go in some depth on various related subtopics. Reading this book, you realize that succeeding in raising venture capital is about a lot of hard work, preparation, perseverance, and smarts. It is not easy, but it is doable. Luck comes to the well prepared. And, the coauthors show you how to get well prepared in every aspect of this business to successfully raise venture capital. They provide a lot of practical tools to assist you.

The book gives you the perspective of venture capitalists; how they value your company, evaluate management, view risks and returns. The pie chart on pg. 27 gives you what are venture capitalists revenue sources.

One of the first key questions is: should you raise venture capital? On page 44, the authors made an excellent decision tree/flow chart to assist you answering this question. Maybe the outcome for your fundraising needs is not venture capital but angel capital, seed fund, or organic growth (generate capital internally). On page 269, they have another excellent decision table allowing you to figure out if you are ready to raise capital from investors.

Following up on that they have an entire chapter (4) dedicated to alternatives to venture capital including angel capital, crowdfunding, Small Business Innovation Research (SBIR) grants, SBA loans, family and friends, and microfinance. The coauthors also share a key concept related to how to manage tens of different angel investors. This can be problematic for two reasons. First, they can waste a lot of your time with irrelevant questions. Second, venture capitalists hate fragmented ownership with so many investors before they come in. So, to manage this problem you create an LLC (limited liability corporation) and put all your angel investors within it. As is, they will behave as a single investor. And, venture capitalists won't mind them. See the textbox (pg. 166) titled "Cleaning your cap table by creating LLCs."

How to find investors online also has an entire dedicated chapter (5). This covers how to utilize the websites of Gust and AngeList.

The coauthors go into great detail on formulating your exit strategy. They cover the trade offs of going public and on which stock markets (on page 136, they detail some of the listing requirements of the different US stock markets) vs being purchased by Google or another company.

Sometimes, the coauthors go into interesting technical details. The formula they share on pg. 161 related to how to prevent ownership dilution through several rounds of funding is very interesting. They call this formula "weighted-average anti-dilution math." Risk evaluation tables (pg. 182 - 185) are very helpful. It puts you in the mindset of the venture capitalists you are pitching to.

Chapter 11 on how to value your start up company is excellent. It outlines several methods catered to this special situation where companies do not have enough of a history to be valued using traditional valuation methods. Related to valuation, the authors share a counterintuitive insight. It is just as bad to overvalue your company on the first round of capital raising as it is to undervalue it. If you overvalued it, your company will fail to reach future target goals to justify this high valuation. And, this may shut you out of raising additional capital. If you undervalued it on the first round, you left a lot of money on the table. This will cumulatively impair your valuation throughout the exit.

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