Review of The Irwin Guide to Using The Wall Street Journal, 6th Edition (Hardcover)

This book is a good introduction to the principles of the macro economy.

The author explains the basics of the federal reserve system, monetary policy, the causes and effects of inflation, and various personal investment products such as stocks, mutual funds, commodities, and money market accounts. The basics of each is explained, and the author shows how each is tracked daily in the Wall Street Journal. The purpose is to allow individuals to understand their investments, track their progress, and be able to react to changing market conditions. Its all sounds very axiomatic, but the great thing about this book is that it states basic principles that are often assumed, and thus left unstated.

For example, if the following excerpts are helpful to you, then this would be a great book for you:

Page 15: "The forces of supply and demand condition every business cycle."

Page 25: "Bank lending finances spending, and spending generates inflation. The Fed controls bank lending and can thereby control inflation."

Page 33: "Every commodity has a price; the interest rate is the price of money. As with any commodity, the price fluctuates according the the laws of supply and demand."

Page 165: "Mutual funds are popular with individual investors because they permit diversification in a wide variety of securities with a very small capital outlay."

These are examples of the points covered, and the level at which they are covered. If the above quotes sounded obvious, this book may be below your expertise. But if you finally want to understand the jargon you hear on CNNfn, this book will do the job.

This would be a great book to buy as a graduation gift for a high school senior, or anyone without a background in finance.



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Review of The Handbook of Fixed Income Securities, 6th Edition (Hardcover)

I used this book as a text for a graduate level "Fixed Income Analysis" course. This book covers almost all the fixed income financial instruments from plain vanilla bonds to interest rate derivatives. However, reading this book leaves the reader with a desire for more than just the peripheral knowledge, which is all this book offers.

Theoretically, this book justfies its being called a handbook, but on the mathematical front, it stands absolutely nowhere. There are little or no examples used in the text even though the author touches base on the advanced topics sometimes. Any fixed income practioner, including me, will tell you that ONE JUST CANNOT LEARN FIXED INCOME CONCEPTS WITHOUT GRASPING THE MATH BEHIND THEM, and this book scores poorly in the quantitative analysis. Fixed income securities are extremely sensitive to interest rate fluctuations, and hence, it would be only sensible to present atleast a few chapters trying to explore the concepts used in the modeling of interest rates. But this book doesn't do that. There is little quantitative discussion about duration and convexity, two of the most important risk-measurement tools for bonds.

Since it is called a handbook, I don't see any reason why the author should hold back advanced concepts from the readers. Conversely, since this book doesn't attempt to teach all the concepts to its readers, it should not be called a handbook. This problem is actually common to all the Fabozzi books. Either his math is weak, or he is just busy making money writing a handbook on every possible fixed income security. It's only a shame that a capable and learned individual like him should do such a sloppy job.

I would recommend books by Bruce Tuckman, Garbade, or Horne for more advanced and intelligent discussions on fixed income securities and interest rates rather than this book. One really need not waste money on this book. Theory on Fixed Income instruments is widely available from Federal Reserve publications, which are almost always free. Put your money only where it will produce fixed & positive returns - Fixed Income 101.



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