Customer Review

556 of 579 people found the following review helpful
1.0 out of 5 stars With this book, I give up my remaining trust in cover blurbs., November 8, 2008
This review is from: When Markets Collide: Investment Strategies for the Age of Global Economic Change (Hardcover)
I bought this book because it won the Financial Times Book of the Year Award (not a top ten winner or something, #1 mind you). Historically, a reliable guide (e.g., the masterpiece China Shakes the World, and theoretically dubious but highly provocative Friedman's World is Flat). It has dawned on me belatedly that advance praisers probably don't read their books. All these absolutely glowing endorsements by serious people...for a book that *clearly* isn't top notch.

T. Bojko's review may seem harsh, but it's spot-on. I can live with the ponderous writing style. I initially thought the big words concealed some new or profound thinking...but not at all.

The problems are: 1. there's almost nothing new or inspired about the "markets of tomorrow," and 2. there is nary a sliver of new, actionable advice about investing. The whole thing is a compendium of the superficial. Seeking to cut a swath a mile wide, it is everywhere one inch deep.

In regard to the first, the following are superficially summarized: global trade/capital flows (rightly footnoted to Martin Wolf, but Wolf's own columns are better on this); a cocktail of snippets on behavioral finance - called a "cocktail" - just read Shiller straightaway; some stuff on global trade and commodities, see latest Economist; a paraphrase of Taleb's colorful insights (just read Taleb directly); a woefully weak primer-not-really on securitization; a brief primer on asset classes that repeats everything I've got in a dozen other finance books; and too much material on IMF (e.g., not a single mention of Basel). I agree the topics per se are important, but most of them here are superficially derivative of other, better works.

Here are the four insights from Chapter 2: we are coming from a period of aberrations, many puzzles; too many dismissed them as noise; the inability to distinguish signal from noise is a bad thing; the adjustment caught people off guard. I'm not kidding. The blinding insight is: take care to distinguish signal from noise! Noise bad, signal good....

Strangest of all, in my opinion, is that the author appears to have nothing to add to the field of risk management, which stuns me given his unique vantage point. Risk management is reduced to a few catchphrases: tail risk, moral hazard, principal-agent. Say it ain't so...

Finally, T. Bojko is right about the mundane asset allocation plan: "the author just lays out a pretty mundane asset allocation plan (which is available for free on any number of websites) and then fills a couple dozen pages with worthless blather. Seriously, that's it." That's exactly right.

The book boils down to: big "structural" change is coming, try to sort signal from noise, here's pointers to a bunch of good reading material, I worked at the IMF, start with this generic plan.

I saved you a few bucks. More to the point, I wasted my time reading this book so you don't have to. Since that time is lost to me forever, the least you can do is vote my review "helpful."
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Showing 1-5 of 5 posts in this discussion
Initial post: Jun 19, 2009 11:48:19 AM PDT
Norm says:
You missed the point of using all available theories/models as tools to deal with the real world with an open mind. He showed us how to fish (independent and inclusive). It helped me understand how the policy was made at least. The only good cat is the cat that can catch the mouse. When the world has changed, American has to change which is not easy.

As a small investor, I got burned with the simple minded trading strategy such as " reverse to mean ". I know I can not possibly dig up the real signal from the noise. I have no way of knowing which destination my investment will end up with, not to mention his multi-equilibria situation. The real painful thought is not the loss itself, it is that we can no longer deal with the complexity ourselves. We need to hand in our money to professionals (e.g., PIMCO). Clearly, this book is not inspirational to me but it may tell us the truth. The only way to stay safe as well as independent is limiting our investment exposure and hope to catch a few positive black swans in our life time.

In reply to an earlier post on Aug 4, 2009 7:45:37 PM PDT
Last edited by the author on Aug 4, 2009 7:47:06 PM PDT
Norm - I don't disagree with his strategy or the idea of opportunistically using ideas. But these are *book reviews*: they should review the quality of the book as it presents to the reader, hopefully without too much bias based on whether you agree/disagree with the conclusions. The *quality* of the "argument" here stinks; even as the argument may be true. And, dressing it up in intellectual language doesn't help a bit. It makes me more wary: the best ideas can be plainly conveyed. On reflection, I actually think the ponderous language manages to conceal the vacuousness of the contents (e.g., if i don't understand these sentences, there must be something profound here...)

Posted on Apr 23, 2010 2:42:53 AM PDT
CoffeeMD says:
I am very appreciative of this ruthlessly truthful review. I HAVENT read the book, but have been listening to videos of interviews of this guy, and after a while I realized that 1. english cant be his native language, it is incedibly metaphoriocal and flowery and frankly opaque half the time, like you believe HE may know what he's talking about, but a confusing profusion of metaphors, frequently mixed, and idiosyncratic definitions (just WHAT is he referring to). I'm thinking he is Egyptian and that his thinking, clearly effective judging from his successes, is untranslatabe into English. He thinks in Egyptian concepts, or some other language. He never gives a concrete example. You could see a lot of this in the Charlie Rose interview. Charlie finally essentially gave up having pinning him down on what he was talking about. So I guess the guy sees he grand scheme of things, and that's really all he wants to share.

Posted on Sep 30, 2011 12:34:50 PM PDT
[Deleted by the author on Oct 1, 2011 3:03:27 PM PDT]

Posted on Nov 15, 2013 4:33:57 PM PST
D. Holmer says:
Interesting that about the time you wrote this review, El-Erian was being put in charge of Pimco's Global Multi-Asset Fund (PGAIX) specifically so that he could put into practice the principals outlined in his book. The fund underperformed 85% of its peers for the next 5 years.
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