Review of Less Is More: How Great Companies Use Productivity (Hardcover)

Perhaps because of, or even in spite of, positive reviews aplenty from other Amazon reviewers, I found this book disappointing and confusing. A comment in the Introduction caught my attention. Jennings writes "we were eager to avoid Tom Peters' embarrassment when a number of excellent companies sagged badly soon after publication..." Quick Google searches on three (there were more companies; I just did three) Jennings-commended companies (The Warehouse, Ryanair, and Nucor) read more like embarrassments as well.

To be specific:

The June 4, 2003 New Zealand Herald reported that "The Warehouse founder Stephen Tindall has stepped back into the company's day-to-day operations, leading a scheme dubbed Project Urgency to fix its Australian problems. ... Tindall is leading Project Urgency. Its aim, as the name suggests, is to give the Australian operation a rapid makeover."

At the same time, Ryanair had its own problems. Per the web report: "Europe's fast-growing low-fare airline, dropped as much as 14.7 percent Tuesday after the low-fare airline said it expects lower fares and yields this year will pressure its profit margin." The book may provide an explanation: Jennings lauds attention to customer service and satisfaction and chastises those who fail to respond to customers. As Jennings ironically notes: "Other than cheap airfares, customer service at Ryanair is nonexistent." Queried by Times of London reporter as to the paper receiving "more complaints concerning Ryanair's customer service than any other airline," Ryanair's CEO response: "We don't screw them every time we fly them." Nice attitude.

A third featured company, Nucor, also turned south about the time Jennings went to press: Nucor's stock price dropped by half between mid 2002 and early 2003.

There is more I found unsettling: Jennings repeats canards about "eggs and ham" (the chicken's involvement and the pig's commitment), about showing prospects a heavenly version of product yet delivering hell, and about decentralizing fireworks production (avoiding one big explosion). He mimics Jim Collins's "Get the right people on the bus." He follows Peter Drucker's ideas to produce the anagram, WTGBRFDT ("What's the good business reason for doing this?"). And Edwards Deming must be spinning in his grave when he reads Jennings: "The objective is to perform the task with zero variation." (p.129)

The all-too-flattering biographies and profiles remind me of Fast Company or Inc. pieces. The book concludes with a self-congratulatory chapter recommending of Jennings' previous work, an epilogue featuring Jennings' personal trainer, and a lengthy section of acknowledgements that consists of name dropping more than links to research help. He commends his research team of recent graduates of Stanford, Princeton, and Berkeley yet he offers no systematic research, data, tables, graphs, analyses or standards. Jennings has a lot of ideas and inspiration, but little is substantiated. And, in another twist, the book is about more (productivity, profits, revenue per employee), not less. The final product is a watered down amalgam of "In search of excellence" and several other popular business authors and books.



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Review of You Don't Have to Be Rich: Comfort, Happiness, and Financial Security on Your Own Terms (Hardcover)

There are dozens of books which address many of the same topics and issues and this is one of the best because it was written primarily for non-experts such as I who seek "comfort, happiness, and financial security on [our] terms," of course, and need guidance to make appropriate decisions. Answers to questions such as these are more difficult to formulate now than at any prior time that I recall:

*What are the significant differences between standard of living and quality of life?
*Are they mutually exclusive?
*How can -- and should -- "wealth" be measured?
*To what extent (if any) is there a correlation between personal happiness and net worth?
*What do the happiest people seem to share in common?
*What are the most damaging misconceptions many people have when formulating a financial plan?
*Which strategies and tactics are most effective to achieve financial security? Why?
*What are "The Ten Commandments of Financial Happiness"?

Chatzky address these and countless other questions which many of us may have but feel embarrassed to ask. Of course, we can retain highly reputable financial planners whose services are worth every dollar they cost. However, my own experience suggests that a financial planner's best client is a well-informed client. More specifically, financial planners are most valuable once a client has carefully completed exercises such as those which Chatzky includes in her book. Invoking direct address, what do you REALLY want in life? Being rich and being happy are NOT mutually-exclusive. Many people are unhappy because they are essentially insolvent, if not destitute. No savings, credit unworthy, deeply in debt, in danger of foreclosure or eviction, etc. Many others are just as unhappy because of their affluence. They yearn to possess what money can't buy: physical health, peace of mind, friendship worthy of the name, etc.

Caveat: Do NOT purchase this book or any other such book unless and until you are wholeheartedly committed to doing the "homework" required and then to following through on whatever decisions you make. I think that Chapter 6 (all by itself) is worth far more than the cost of the book. However, do you REALLY understand the requirements as well as the benefits of living within your means? Tough decisions may need to be made. (I mean TOUGH.) Do you have what it takes to make them? More importantly, do you have what it takes to stick with those decisions no matter what? Years ago, the actor Rod Steiger was asked if young people ever requested career advice. "Oh yeah, sure, all the time. I look them right in the eye and ask `Do you want to be an actor or do you HAVE to be an actor?' The longer it takes themto answer, the less likely they'll ever make it." If you HAVE to have financial security, Jean Chatzky can help you to achieve it.Otherwise....



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Review of You Don't Have to Be Rich: Comfort, Happiness, and Financial Security on Your Own Terms (Hardcover)

There are dozens of books which address many of the same topics and issues and this is one of the best because it was written primarily for non-experts such as I who seek "comfort, happiness, and financial security on [our] terms," of course, and need guidance to make appropriate decisions. Answers to questions such as these are more difficult to formulate now than at any prior time that I recall:

*What are the significant differences between standard of living and quality of life?
*Are they mutually exclusive?
*How can -- and should -- "wealth" be measured?
*To what extent (if any) is there a correlation between personal happiness and net worth?
*What do the happiest people seem to share in common?
*What are the most damaging misconceptions many people have when formulating a financial plan?
*Which strategies and tactics are most effective to achieve financial security? Why?
*What are "The Ten Commandments of Financial Happiness"?

Chatzky address these and countless other questions which many of us may have but feel embarrassed to ask. Of course, we can retain highly reputable financial planners whose services are worth every dollar they cost. However, my own experience suggests that a financial planner's best client is a well-informed client. More specifically, financial planners are most valuable once a client has carefully completed exercises such as those which Chatzky includes in her book. Invoking direct address, what do you REALLY want in life? Being rich and being happy are NOT mutually-exclusive. Many people are unhappy because they are essentially insolvent, if not destitute. No savings, credit unworthy, deeply in debt, in danger of foreclosure or eviction, etc. Many others are just as unhappy because of their affluence. They yearn to possess what money can't buy: physical health, peace of mind, friendship worthy of the name, etc.

Caveat: Do NOT purchase this book or any other such book unless and until you are wholeheartedly committed to doing the "homework" required and then to following through on whatever decisions you make. I think that Chapter 6 (all by itself) is worth far more than the cost of the book. However, do you REALLY understand the requirements as well as the benefits of living within your means? Tough decisions may need to be made. (I mean TOUGH.) Do you have what it takes to make them? More importantly, do you have what it takes to stick with those decisions no matter what? Years ago, the actor Rod Steiger was asked if young people ever requested career advice. "Oh yeah, sure, all the time. I look them right in the eye and ask `Do you want to be an actor or do you HAVE to be an actor?' The longer it takes themto answer, the less likely they'll ever make it." If you HAVE to have financial security, Jean Chatzky can help you to achieve it.Otherwise....



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Review of The Greed Merchants: How the Investment Banks Played the Free Market Game (Hardcover)

This book is a very informative book and would prove useful for someone who wants a critical perspective on modern investment banking.The author's facts are based up with citations.Furthermore, he takes a very balanced approach to making his point, don't let the title fool you, the book is not as moralistic as its title.Occasionally, the writing lack vitality, but the author is not a professional writer, he is a veteran i-banker and this is probably as about as good writing as you are going to get out of a banker.His insider perspective is very useful and he tells it as it is without resorting to jargon.

My biggest concern is that this book takes too negative a view of investment banks.It seems to assume that investment bankers must play an altruistic role and look out for everyone's interest except their own.This is unrealistic, no other company does this.[......]



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Review of Predicting the Markets of Tomorrow: A Contrarian Investment Strategy for the Next Twenty Years (Hardcover)

In Predicting the Markets of Tomorrow author James O'Shaughnessy offers his ideas on the investment environment we are likely to encounter over the 20 years from 2006 through 2026. He selected twenty years as this time horizon based on extensive analysis of market behavior over approximately the last 200 years. His logic goes something like this:

1.When calculating returns from any investment strategy, it is essential to focus on the real return, after accounting for inflation.
2.Approximately two hundred years of stock market data (1809-2004) show that real returns have been highly erratic, especially when analyzed over periods of a few years or less.
3.However, when one calculates returns using overlapping periods of 20 years, they become much smoother. Stocks have rarely lost value over a 20 year period.
4.There are probably some underlying factors that cause returns to be smoother over 20 years. O'Shaughnessy suggests two. First, many investors don't really get started saving and investing until their mid 40s, giving than about 20 years to accumulate assets before retiring. Second, retirement at 65 together with a life expectancy of 85 suggests retirements (and asset depletion cycles) that last about 20 years.
5.If one decomposes the 20 year average returns of the S&P into the returns of the growth and the value stocks that comprise the S&P, these two groups have tended to move out of cycle with each other. Growth stocks occasionally have produced the higher return, as they did in the 1980s and 1990s. More often, value stocks have outperformed value stocks.
6.The returns of these three groups (S&P, Growth, and Value) all seem to revert to their mean rates of return. Any group that has outperformed in a 20 year interval is likely to underperform in the next 20 year period.
7.Since growth stocks outperformed in the 1980s and 90s, it's now their turn to underperform while value stocks outperform.
8.One can also segment the market by the capitalization (the total value of all the shares of a company). This analysis suggests that small cap stocks are likely to outperform large cap stocks over the next 20 years.
9.The average 20 year real returns /standard deviations of the key market groups between 1947 and 2004 have been:

Large Cap Growth: 6.26%/3.83%
S&P 500:7.30%/3.76%
Large Cap Value: 10.32%/3.42%
Small Cap: 10.42%/2.94%

10.As seen in the figures above, Large Cap Value and Small Cap stocks have higher returns with lower standard deviations. When you add on the fact that these two groups have underperformed over the last 20 years, O'Shaughnessy appears to have a compelling argument for focusing on these two groups. To hedge his bets slightly, he recommends a preferred portfolio allocation of 50% large cap value, 35% small cap growth, and 15% large cap growth.
11.Fixed income securities, even inflation protected treasuries (TIPS) are currently producing returns that, at best, break even. They are "Return-free risks, not risk-free returns".Avoid them except as a place to park cash they you will need in the next few years.

Reviewer's Comments: I agree with O'Shaughnessy's approach and conclusions but would have liked a better justification for using 20 year average returns. One could argue that generations are separated by about 25 years which might make that figure the logical interval for averaging. Perhaps someone has (or should) compare the results of averaging over different periods such as 10, 15, 20, 25 and 30 years. Or, even better, use a Fast Fourier Transform to determine the power spectral density of each time series.




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Review of You've Lost It, Now What? How to Beat the Bear Market and Still Retire on Time (Hardcover)

Investors contemplating retirement, but stunned by losses sustained in the extended bear market that began in the spring of 2000, will find hope and encouragement in Wall Street Journal columnist Jonathan Clements' "Now What?". This is a do-it-for-yourself repair strategy for baby boomers with badly damaged bubble portfolios. First, face facts, we are told: You've got a "bone-head" portfolio, and it's not likely to come back in value, so sell your losers. Forget the "foolish beat-the-market fantasy" promoted by Wall Street's brokerage houses and money management firms. Invest to capture market returns with stock index funds. Diversify with stocks, bonds, and real estate. Specifically, you should own large and small US stocks and foreign stocks. For the bond portion of your portfolio, use inflation indexed treasuries and short-term corporate funds, and to boost your income, consider high yield bond mutual funds. Clements recognizes that "this will be the decade of the dividend and interest payment". So, REITS (real estate income trusts) with their high, single-digit returns, should represent 10-15% of your portfolio. In all this, Jonathan Clements is in good company: W. Bernstein, C. Ellis, B. Malkiel, L.Swedroe, B. Schultheis, et.al., have recently written (or updated) books with similar conclusions. Clements' contribution is in the timeliness of his insistence that boomers can salvage their own retirement plans by acting to keep investment costs in check, diversifying, and saving "like crazy". Indeed, the investment process should be simple to follow. "Why are we such sluts for sophistication?" Clements asks with exasperation. Readers may be skeptical that a fifty-year old, in an example, who hasn't saved a "nickel" for retirement can accomplish much by age sixty-five. But this late starting investor is not the book's primary focus. 'Gilding the Golden Years' (Chapter 7) is one of the author's better chapters. Investing may be "simple", but it is also an art, so this frequently quoted columnist's portfolio advice is of value. Clements is clearly intrigued by a strategy of establishing multiple sources of investment income during retirement. In addition to income from social security, 401k-style plans, pensions, and humbled securities portfolios, investors might consider an immediate annuity, a reverse mortgage, or even part-time work. After all, if it's true that investors should take no more than five percent of their investment assets each year for income, working part-time to earn five thousand dollars is like having another hundred thousand dollars in retirment assets. And an unconventional idea like a reverse mortgage may take on a new practicality for today's generation of soon-to-be retired. Investors paralyzed by their recent bear market experience will find sound, helpful advice in this book.



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