book

A Decade of Delusions: From Speculative Contagion to the Great Recession

by Frank K. Martin, John C. Bogle

May 2011

Intermediate to advanced

449 pages

13h 28m

English

Wiley

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Cover
Contents
Title
Copyright
Dedication
Foreword
Preface
Chapter 1 : Lead Us Not into Temptation
May Reason PrevailPatience and PersistenceThe Dean of Wall Street RevisitedThe Investor’s DilemmaIt’s a Numbers GameThe Supremacy of Earnings“Stealth Compensation”Conclusion
Chapter 2 : Techno Babble, Techno Bubble
A Tale of Two MarketsBack to the Future?Warren Buffett on the Stock MarketIs the Internet the Answer?What’s a Long-Term Investor to Do?Investment Redefined
Chapter 3 : “Pop!!”.com
Risk: No Longer an AfterthoughtInvestment Strategy: Is It Time for Technology?Is There a Snowball Rolling Our Way, Gathering Mass and Speed?The Art/Science of Managing RiskBaby Boomers: Whither Goest Thou?The Internet and IPO FrenzyFool’s GoldGoliaths Slain

Chapter 4 : Swimming against the Current
Prelude to Our Investment “Strategy”Interest Rates: It Had Better Be Uphill from HereThe Power of Popular DelusionsThe Mind of CrowdsInvestment Consultants: The Great Middleman Myth
Chapter 5 : The “Greenspan Put”. . . Again
Investment StrategyThe ReckoningSober in the MorningMicro versus MacroThe Margin-of-Safety ParadoxWaiting Patiently for Those Hanging Curves
Chapter 6 : Only Fools Rush In
The Rogues Gallery, 2003 VintageMaking Progress in the Post-Bubble EnvironmentHow Did We Get Here in the First Place?The Apogee of the Mutual-Fund BoomThe Great Abdication of Fiduciary Responsibility: The Defined-Contribution PlanWhere the Buck Really Stops
Chapter 7 : Expanding Concern: A Bigger Bubble?
Maybe the Markets Are Not Random?A Short History of Financial EuphoriaFully Deluded Earnings: Penance (?) in the Cuff-Links CoolerRun for the Roses: Of Pawns, Guinea Pigs . . . and “Retail Investors”“Swing, You Bum!”Marathon Endurance
Chapter 8 : What History Teaches
Free Markets: Popular Delusions and the Madness of CrowdsAspiring to Rationality by Overcoming Heuristic BiasesToday Is Not Tomorrow: Cycles and Differing “Opportunity Sets”Inverting the Traditional High-Risk/High-Return ParadigmThe Inevitability of Regression to the MeanThere Are No Called Strikes in the Investment BallgameFocus on the ImportantThe Malevolent Mathematical Mystery of Modern Money Management (a.k.a. MPT)The Absurdity of the Collective Wisdom of Individual IrrationalityDiversification and the Myth of Safety in NumbersThe New-Era Error
Chapter 9 : Contagious Speculation
The Means to the EndThe Perfect Storm? Viewing the Vista through the Lens of HistoryThe Blossoming of the Financial Economy: The Cataclysm in the Creation of CreditBubbles Are Indigenous to the Financial EconomyIf Housing Prices Roll OverA Remarkable Story of Risk Management—Run AmokThe Perfect Storm ReduxCapitalism: When “Financial” Overwhelms “Commercial”Minsky: A Prequel?The Evolving History of Economics and Finance: Reflections
Chapter 10 : The Tipping Point
Excerpt from Quarterly Capital Markets Review, July 2007Draft of Letter to MCM Clients, July 2007Quarterly Capital Markets Review, October 2007: “What’s Up, Doc?”Cyclical or Secular? The Current Crisis in the Larger Context of Cause and Effect—Connecting the Dots through TimeThe Misalignment of Incentives and the Opaque World of High FinanceEdging toward the PrecipiceThe “Simple” Question Why?An Early Epitaph for the First Decade of the New MillenniumCredit-Default Swap Alchemy: Transmuting Junk into GoldCounterparty Risk
Chapter 11 : The End or the Beginning?
Origins of a Crisis: Decoupling Risk and ReturnThe Question on Which the Future of Investment HangsThe Stockdale Paradox: What Do Survivors Have in Common?Know ThyselfHarsh Realities and the Snowball EffectThe Future of Risk AversionPrice Is What You Pay, Value Is What You GetThe Lost DecadeThe Most Powerful Force in the UniverseValue Investors: A Rare BreedRisk—Once Again a Four-Letter Word?Analysis and Intuition: The Yin and Yang
Epilogue “This Time Is Different”
Index

Content preview from A Decade of Delusions: From Speculative Contagion to the Great Recession

Index

1987 market correction

1998–2004 summary

2000–2009 investment performance

2000–2010 overview

401(k)s. See also Retirement plans

9/11

Abelson, Alan

Above-average bias

Accountability

Accounting, role of

Acquisition reserves

Adjustable rate mortgage (ARM)

Aftermath characteristics of financial crises

Against the Gods: The Remarkable Story of Risk (Bernstein)

Agency dilemma

Airline industry

Amazon.com

American Association of Retired Persons (AARP)

Amplification mechanisms

Analysis of individual businesses

Analytical vs. intuitive thinking

Anchoring

Annual reports:

1998

1999

2000

2001

2002

2003

2004

2005

2007

2008

2009

Arrow, Kenneth

Arthur Andersen

Art of Thinking, The (Dimnet)

Asset-backed securities (ABSs)

Asset classifications

AT&T

Atlas Shrugged (Rand)

Austrian business-cycle theory

Auto industry

Availability bias

Babson, Roger

Baby Boomers

Bailouts

Bank consolidations/earnings

Bank of America

Barnes, Martin

Baruch, Bernard

Base-rate neglect

Beane, Billy

Bear Stearns

Behavioral economics

Beresford, Dennis

Berkshire Hathaway

B shares issuance

cash holdings

effects of 9/11 on

Bernanke, Ben

Bernoulli, Daniel

Bernstein, Peter

Beta

Bezos, Jeff

Biases in reasoning

“Big bath” charge

“Black Monday” crash of 1987

Black Swan: The Impact of the Highly Improbable (Taleb)

Boards of directors ethics

Bond-interest coupon

Bond prices

Bond quality

Bonds. See also Fixed-income securities

corporate

purpose of

Treasuries

valuation of, vs. stocks

yields

Bonhoeffer, Dietrich

Bookstaber, Richard ...

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A Decade of Delusions: From Speculative Contagion to the Great Recession

by Frank K. Martin, John C. Bogle

Become an O’Reilly member and get unlimited access to this title plus top books and audiobooks from O’Reilly and nearly 200 top publishers, thousands of courses curated by job role, 150+ live events each month,
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