Saturday, October 13, 2007

Capital Ideas and Market Realities

This week I finished the book "Capital Ideas and Market Realities" by Bruce Jacobs. This was a set of essays about modern finance. Bruce was complaining about "Portfolio Insurance". This is a strategy to move from stocks into safer cash or bonds, when the stock market starts to go into decline. This is meant to help stop loses. This is theoretical idea behind automated selling that was a cause of the stock market crash in 1986. I am still learning the financial jargon, but the book was a good introduction to the ideas of financial mathematics