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Customer Review
Reviewed in the United States on June 11, 2012
This is truly the best book that I have ever read about inefficient markets. It is conceptually sound and simultaneously based on the wise experience of a portfolio manager over decades. In particular, Howard Marks' explanation of the cylicality of markets around their intrinsic valutions correctly explain market over reaction. Market over reaction offers the opportunity to profitably trade for the longer term. Acaemics call this cyclicality "ranges of bounded rationality." Practitioners call it "market sentiment." Bollinger attempts to measure it with "Bollinger Bands." (Bollinger Bands are +/- 1.5 standard errors of prices over a 200 day moving average.) Behavioral finance people account for this cyclicality based on human irrationality.
Marks does a terrific job of calling into question the commonly accepted academic assumption: market prices ALWAYS equal intrinsic valuation. The academic community must relax this erroneous assumption. Until that community does so, the profession will continue to face an impossible task. That task is making progress on the core issues facing manking on how markets actually work in the real world.
Empirical evidence to support Mark's incredibly sound concepts would substantiate his arguments. My research fills part of this gap. Combining Marks' concepts with Benoit Mandelbrot's research measurements promises the opportunity to achieve both lower fat-tailed risk and superior investment returns.
Rawley Thomas
President and Co-Founder of LifeCycle Returns
Co-Editor of The Valuation Handbook
The Valuation Handbook: Valuation Techniques from Today's Top Practitioners (Wiley Finance)
and
Co-Author of ValuFocus Investing
ValuFocus Investing: A Cash-Loving Contrarian Way to Invest in Stocks (Wiley Finance)
Marks does a terrific job of calling into question the commonly accepted academic assumption: market prices ALWAYS equal intrinsic valuation. The academic community must relax this erroneous assumption. Until that community does so, the profession will continue to face an impossible task. That task is making progress on the core issues facing manking on how markets actually work in the real world.
Empirical evidence to support Mark's incredibly sound concepts would substantiate his arguments. My research fills part of this gap. Combining Marks' concepts with Benoit Mandelbrot's research measurements promises the opportunity to achieve both lower fat-tailed risk and superior investment returns.
Rawley Thomas
President and Co-Founder of LifeCycle Returns
Co-Editor of The Valuation Handbook
The Valuation Handbook: Valuation Techniques from Today's Top Practitioners (Wiley Finance)
and
Co-Author of ValuFocus Investing
ValuFocus Investing: A Cash-Loving Contrarian Way to Invest in Stocks (Wiley Finance)
