This book authored by Roger Lowenstein, is a short biography and chronology of an infamous hedge fund.

Background

So before getting into the review of this excellent read we need to understand, what does hedge fund means?

Investopedia defines the term hedge funds as “An aggressively managed portfolio of investments that uses advanced investment strategies such as leveraged, long, short and derivative positions in both domestic and international markets with the goal of generating high returns”.

For most of us (read naive to financial jargons), hedge funds would refer to something which creates volatility in the market and most of the times makes our well thought out investment decisions wrong.

One such hedge fund, which was a cause of envy for the fellow hedge fund managers till it was operative (for the kind of returns it generated) and created ripples in the markets, (as much as to force the Federal Reserve to arrange a bail-out so as to avoid a systemic crisis) was Long Term Capital Management commonly known as LTCM.

About author

Roger Lowenstein earlier authored the bestselling biography of Warren Buffet named Buffet: The Making of an American Capitalist. He was also a financial journalist for The Wall Street Journal and today a columnist for SmartMoney. Following this book, Roger also authored –

• The End of Wall Street
• While America Aged: How Pension Debts Ruined General Motors Stopped the NYC Subways, Bankrupted San Diego and Loom as the Next Financial Crisis
• Origins of the Crash: The Great Bubble and Its Undoing

The book – When Genius Failed

LTCM is all about John Meriwether who was a successful trader at Salomon Brothers. He is also credited with establishing the best arbitrage desk at Salomon Brothers. He is even mentioned in Michael Lewis’ book Liar’s Poker, were he has been described as Salomon Brothers Uber-trader and master of Liar’s Poker. In 1991, following a scandal involving one of his trader he had to resign. This is when seeds of LTCM were sown.

Over the next two years, Meriwether convinced his earlier team comprising mainly of mathematicians and stasticians to join him in forming a new hedge fund. One of the biggest draw of the fund was that Nobel laureate Myron Scholes and Robert Merton became the partners in the fund. Over the 4 year period from 1993-1996, LTCM earned spectacular profits, sometimes in excess of 40%. By the spring of 1996, LTCM was holding $140 billion. The fund thrived on speculative trades in the name of arbitrage by using complex models earning small amount of profit on huge volume of trades.

However, following a few wrong bets placed and the strategy of LTCM to double its bets each time it went wrong, proved disastrous for the fund. Also as the world wide traders came to know that bets placed by LTCM had failed and it might have to liquidate, things worsened and the losses of LTCM increased. Fearing the probable systemic crisis, Federal Reserve System had to arrange for a bail-out. Buyers of distressed assets of LTCM however made profit later on.

Positives

What I like the most in the book is that the details of each of the above events have been captured in gripping detail by Lowenstein. Even after 13 years, you get an illusion of experiencing the events. Especially towards the end, when he captures the events of bail out of the fund, Lowenstein’s conversational but equally urgent tone carries it along well.

Negatives

I felt that the language of the book is not very lucid. Author assumes its readers to have a basic understanding of the financial concepts. You might have to put a little strain on the brain to completely comprehend the book.

Conclusion

To someone who is interested in how no one can keep on winning the trading game, this book is a good read. To someone willing to know about the inside story of how a great profitable financial entity can be rapidly built and how because of a fundamental mistake it can crash, this book is an even better read.

If you would like to read this book you can buy online from FlipKart.com. If you have read this book, share your review with other readers b y posting a comment below.

Author : Praveen Bajaj, MBA (SCMHRD)

Related posts:

1. Book review: A Colossal Failure of Common Sense
2. Book Review – Screw it, Let’s do it
3. Book Review – Barbarians at the Gates: The Fall of RJR Nabisco

Inviting applications from experienced options traders for Options trading desk at Kredent Finance, Kolkata

Kredent Finance is one of the largest professional trading firms in Eastern India contributing significantly to market volumes. Our professional trading desk has access to all the asset classes available for trading in India and houses some of the best traders in this part of the country. We are direct clearing and trading members of the NSE, BSE, MCX-SX, MCX, NCDEX and ACE. Visit www.kredent.com for more details.

Position will be based out of Kolkata.

Incumbent should be experienced in trading options in either equities or currencies on Indian markets.

Please forward your resumes to career@kredent.com with the subject line “Options Trading”.

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This book is the most complete, reliable, and objective guide to technical analysis, this book has been thoroughly updated to reflect the latest advances in field of technical analysis. Selected as the official companion to the prestigious Market Technicians Association CMT program, it systematically explains the field’s principles and techniques, presenting academic evidence and hundreds of illustrations.

There is an extensive review of chart construction, chart pattern analysis and trend confirmation using bar charts, candlesticks, and point-and-figure charts. Also covered is a discussion on cycles, Elliott wave, Fibonacci and Gann. Furthermore, there is a discussion of trading and investing and market and issue selection. A chapter on system design and testing, and money and risk management provides additional insight into the subject.

The knowledge imparted by this book can benefit financial professionals, individual investors, college students; financial journalists who want to learn the key concepts of technical analysis, and other interested parties. In addition, this book can also be used as a study guide for the Certified Market Technician (CMT) designation.

Purchase Online

Related posts:

1. Advance Technical Analysis Seminar in Mumbai by Manish Hathiramani
2. Book review: A Colossal Failure of Common Sense
3. Book Review – When Genius Failed

If you’ve ever wondered how successful traders are able to profit consistently – in various market conditions – you need to attend this Workshop. In this vital workshop you will learn the strategies and techniques that today’s top performing Technical Analysts & Traders have utilized for years.

It is a 2 day workshop where

DAY: 1
* Introduction to the field of Technical Analysis: its philosophy, rationale and premise
* Basics: charts & price fields
* Using Volume and Support/Resistance concepts to trade
* Detailed Analysis, the concept and trading techniques using the Moving Average (breakout and add on trades)
* Revision Exercises and Case studies

DAY: 2
* Introduction to “Counter Trend” Indicators: CCI and RSI
* Parabolic SAR
* Projection Models: Fibonnaci Numbers
* Stochastic Oscillator
* Optimisation Trading: RMO
* Conclusion: trade management and discipline

Dates: 11th & 12th December, 2010

Time: 11 am to 5 pm

Fees for Workshop- Rs.5000 + Service Tax 10.3%

This seminar will be taken by:

Mr Manish Hathiramani is a technical analyst and proprietary trader at Deen Dayal Investments, and is interviewed regularly on Bloomberg UTV on their shows “Mad About Markets” and “Market Analytics” and on CNBC TV 18 on “Midcap Radar”.

For more details contact 9769943216 or email us at info@kredentacademy.com or visit us www.kredentacademy.com

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Financial Shared Service Centre (FSSC) are autonomous operating units providing services to different businesses and geographical entities in group companies.

Need for FSSC:

The main reason for companies to set up FSSC is Cost reduction followed by flexibility and improvement in quality.

It also provides standardization of process and excess staff levels to be removed.

Also FSSC re-engineer processes under which they eliminate the task that do not add value to organization.

Companies who had already set up a FSSC stand on better platform when it comes to growth and expansion in business in terms of reduced overhead, finance and business administration cost.

FSSC set up is also done in order to consolidate the business across the globe, but doing consolidation does not serve the basic purpose of Cost saving, it is achieved only when company automate the process.

The decision to set up a FSSC shall derive from very top of the organization, since top management commitment is a key variable for the project success.

The regulation of the transactions is managed through Service level Agreement whose content is largely defined by rules of standardization adopted by company.

Now the question arises as to which of the processes can move to FSSC.

• Receivables Management
• Accounts Payable
• Procurement

Three main Objective of FSSC

• Standardization
• Automation
• Business processes excellence

There are two types of alternative available to set up FSSC i.e.

> In house FSSC

> Outsource the F&A function

Comparative Advantage / Disadvantage for In house / Outsource FSSC functions

Worldwide study has revealed that Outsource FSSC functions are more successful than In house FSSC as far as cost cutting is concerned. However In house FSSC may also prove cost effective if it is able to expand itself by pitching third party contracts over the years.

Author: CA Shalini Tibe

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Barbarians at the Gates: The Fall of RJR Nabisco by Bryan Burrough and John Helyar is a book about the biggest LBO of all times, the RJR Nabisco in 1988 for a sum of $ 25 million. This was an event which shook the stock market for 2 months and created liquidity concerns in the market.

The drama starts when Ross Johnson (RJ), CEO of RJR Nabisco launched the LBO in order to increase the share of price of the company. This was thought to be a single bid affair due the enormous size of the transaction and because of the nature in which the company was run by Ross and his team. But Henry Kravis, Senior Partner, Kohlberg Kravis Roberts & Co. (KKR) launched a bid against RJ’s team and in course of time other investment banks also joined the bandwagon. What followed was a fierce battle between the groups fought over rounds of meetings, biddings, interrogations and ever-escalating bids. Finally, KKR won the war even though RJ’s group placed a higher bid as doubts were cast over RJ group’s junk bonds.

About authors

Bryan Burrough is a reporter for the Wall Street Journal in New York. In 1987 he won the John Hancock Award for Excellence in Business and Financial Journalism. John Helyar worked for the Wall Street Journal for nine years. He is now a senior editor of Southpoint, a business magazine based in Atlanta, Georgia.

Positives

The book is arranged in good volumes about the company itself, how it was formed and about the CEO Ross Johnson giving the reader a good background of the company and the main characters involved.

Authors have presented a detailed account of all the events that happened involving all the concerned parties. How the meetings happened and what transpired in these meetings has been written in a well formulated manner.

Book is a good account of how investment banking, the corporate world, corporate boards, and sophisticated financial instrument operate. Having said this, all of this has been done without getting into un-necessary financial details which would have bogged down the reader.

Negatives

Having said this, it should be mentioned that in the early part of the book, many details seem to be un-necessary. Such as details have been mentioned about the lavishness of RJR executives, personal accounts of some of the not-so-important players could have been eliminated.

Also, a large number of characters have been mentioned which at times confused me and I had to turn few pages to recollect about the same. Also since this is a book about something which happened way back in 1988, authors could have taken a few more efforts to include something on how the company was dealt with afterwards and how KKR came out of it.

Verdict

All in all, I would recommend this book to all the book lovers, even if you like fiction, as the way in which this book is written it takes you in that era and you know all about all the main characters involved and what they might be thinking. If you are interested in reading about corporate battles this book simply grips you. This book is a great business book of all times.

I bought it from flipkart.com because they deliver to your doorstep free of cost and on this book I also got 18% discount.

Happy reading and let me know how did you like it.

Book Review by Praveen Bajaj

Related posts:

1. Book Review – When Genius Failed
2. Book review: A Colossal Failure of Common Sense
3. Book Review – Screw it, Let’s do it

Here are some links that you may find useful for accessing macroeconomic information and other statistics. These Datasets don’t require you to pay or register. (Note that some free datasets that require registration are also listed below)

We will be happy to add any link suggested by you for the benefit of all others.

Hope this collection is helpful. Leave your comments below.

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The Book

Screw it, Let’s do it – is a capsule of wisdom. You can read it cover to cover in 2.5 hours. In this book, the world famous maverick entrepreneur Sir Richard Branson narrated in a very lucid and frank way the guidelines that have formed the basis of his success. This book has a unique quality of binding and involving the reader while he read this book.

The book has 14 chapters – Just Do It, Have Fun, Be Bold, Challenge Yourself, Stand on Your Own Feet, Live the Moment, Value Family and Friends, Have Respect, Gaia Capitalism, Sex Appeal, Be Innovative, Do Some Good, Pow! Shazam!, Think Young. Reading at the topic of each of the chapters, I am sure everyone will be intrigued by the contents.

This is book is for the people who are looking for inspiration and motivation in their business or life. The personal experiences he has shared make you believe that earning money can be lot of fun.

About Author

Author of this book is one of the most audacious Entrepreneurs of the present world. Branson has beautifully portrayed his unconventional way of doing business. His full name is Sir Richard Charles Nicholas Branson. He was born 18 July 1950 and he is a British industrialist, best known for his Virgin brand of over 360 companies. Richard Branson is the 261st richest person in the world according to Forbes’ 2009 list of billionaires, with an estimated net worth of approximately £2.6 billion (US$3.9billion).

Other Books written by Richard Branson

If you want to know more about the maverick nature and adventure filled life of Richard Branson and his unique style of doing business, you must read his autobiography -

• Losing My Virginity: How I’ve Survived, Had Fun, and Made a Fortune Doing Business My Way
• Business Stripped Bare: Adventures of a Global Entrepreneur

Conclusion

Like this review, the book, Screw It, Let’s Do It, is a quick read full of the wisdoms that made and still makes Richard Branson a successful man by anyone’s standard. And it is definitely worth a couple of hours of your time to read through it and learn more about what makes people like him successful.

I got this book brand new hard cover @ just at Rs. 134 (after 19% discount) from Flipkart

Related posts:

1. Book review: A Colossal Failure of Common Sense
2. Book Review – When Genius Failed
3. Book Review – Barbarians at the Gates: The Fall of RJR Nabisco

Friends, I have just finished reading a really nice book discussed below. This is the first time I have tried my hand on writing a book review. I have tried to be very objective and honest. Please let me know your views by posting a comment below.

Background: A Colossal Failure of Common Sense

A Colossal Failure of Common Sense

One date that any person across the world would like to forget in recent times would be September 12, 2008- the day when Lehman Brothers, one of the mighty Investment Banks on Wall Street filed for bankruptcy and set in motion sequence of events which led to one of the most severe recession the World had ever experienced. One question which has still not been answered is what conspired inside such a huge investment bank which led to its dramatic fall?

“Colossal Failure of common sense: The inside story of collapse of Lehman Brothers” is an attempt in that direction.

About the Author

Lawrence G McDonald, until 2008 was vice president of distressed debt and convertible securities trading at Lehman Brothers and was considered as the firm’s most profitable traders.

About the Book

Positives

The book very well describes the causes of crisis and how the seeds of the crisis were sowed with the repealing of Glass-Steagal Act and watered by the subsequent developments in financial markets like wide-spread use of instruments like CDS, MBS etc. One thing for which I really liked the book was the simple way in which such instruments have been explained.

As the title claims, the book does give a good insight into the inside culture and happenings at Lehman Brothers. Different people involved in the decision making hierarchy and their roles have been apt fully described which gives the reader an understanding of what might have happened. For instance, Lehman’s former chief executive, Richard Fuld, who, on reading the book appears to be arrogant, stupid, greedy, reckless and a cause which led Lehman in the mess. Mr. Fuld appears to have supported many others who led to a concentration of risk in the then highly profitable segment of CDOs etc which ultimately led to huge losses and MTM write offs.

It also gives a good account of how Mr Mc Donald and others realized that Lehman might be out in troubled waters early on and how they tried to bring it to the notice of seniors but where put down.

Negatives

What might disappoint readers are initial few chapters which describe the early life of the author which have no connection what so ever with the Lehman failure. Also, at some points in the book, there has been a considerable room for ambiguity but there are only few of them.

My Personal Opinion

Overall, I would say this would be a good read for people who either have no knowledge or just a basic knowledge of the financial world. If you are an expert, looking for some high profile details of what transpired, you might be disappointed.

You can buy this book from FlipCart at 10% discount and free shipping here : Buy A Colossal Failure of Common Sense

Author name: Praveen Bajaj

Related posts:

1. Book Review – When Genius Failed
2. Book Review – Barbarians at the Gates: The Fall of RJR Nabisco
3. Book Review – Screw it, Let’s do it

We are glad to invite applications for our Professional Derivatives Trading desk.

Kredent trading desk is one of the largest trading desk in India with substantial market share in exchange’s volume and liquidity. Kredent is the direct clearing and trading member of the NSE, MCX-SX, MCX, NCDEX and BSE. There are multiple openings in our options trading, currency trading, and commodities trading desk.

Pre-requisite: Candidates meeting either of the conditions can apply. The is no compulsion of any trading experience.

• International CFA level 1 pass
• CMT level I pass
• FRM/PFM pass

Kindly forward your resume at career@kredent.com with subject: Professional Trading

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