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Enough! is a piece of work that simply has not been seen by the likes of Jack Bogle before. Sure, the world knows of his legendary financial mind. He is the Father of Index Investing. He is the founder of Vanguard. He is St. Jack. And now he wants to share his own journey, filled with famous characters and telling anecdotes, that aims to teach investors the importance of doing the right thing, how to be a strong leader in today's world, and what it means to have "enough."
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Ben Bernanke's swearing in as Federal Reserve chairman in 2006 marked the end of Alan Greenspan's long, legendary career. To date, the new chair has garnered mixed reviews. Business economists see him as the best-qualified successor to Greenspan, while many traders and investors worry that he's too academic for the job. Meanwhile, ordinary Americans do not even know who he is.
How will Bernanke's leadership affect the Fed's actions in the coming years? How will Bernanke build on Greenspan's success, but also put his own stamp on the Fed? What will all this imply for businesses and investors? In Ben Bernanke's Fed, Ethan Harris provides exceptional insights into these crucial issues.
Engaging and discerning, this book demystifies the man who has stepped into what many describe as the second most powerful job in America.
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I received my review copy of Money Well Spent, the new book on strategic philanthropy by Paul Brest and Hal Harvey, back in August. I sat right down and read the book, but waited to post this review to align with the timing of the book's public availability. Given that there's been a "slight" change in our financial structures since August, I'm glad I held back. Harvey and Brest can't rewrite the book before it hits the shelves to account for the changing economic fortunes across the U.S. or the new landscape of investment banking, Wall Street, and mortgage lenders (to say nothing of taxpayers and mortgage owners). Nor can (this edition of) the book ponder the implications of these crisis-driven shifts in the financial industry or regulatory systems on the philanthropic industry.
But I can. So let me use the occasion of this book review to remind us of how interconnected the business of giving is with the fortunes of finance and the vagaries of regulation. I have always contended that philanthropy is a regulated industry. Three forces define the outlines of philanthropy as we know it - markets are the first and regulatory structures around personal taxes and institutional tax exemptions make up the second. The third, a concern for others, is the only one of these forces that flows from within humanity and stands outside of human institutions and systems.
Lets get on with it. The book marks a significant moment in the marketization of philanthropy. It is, in its own words:
"...intended to do for philanthropists what the best books on business strategy do for business entrepreneurs and executives: provide readers with the concepts necessary to design a strategy to achieve their goals - in this case their charitable goals." (preface, page xi, review copy)
Why does this matter? Because such a 'manual' couldn't have been published 10, maybe even 5 years ago. Why? For at least three reasons: First, there was not enough material, hadn't been enough discussion, not enough real development of strategic technique and thinking. Even though foundation philanthropy - which the two authors know best of philanthropy's many forms - has been around for almost 100 years, there was not, until recently, the commitment to an industry, a demand for strategy, lasting challenges to the status quo, or a significant quantity of players, thinkers, institutions, vehicles and experiments about philanthropic practice to actually inform a book such as this.
Second, and perhaps more important, there was no visible demand. The market of individuals who might become philanthropic, and of philanthropists who might become strategic, and of advisers who'd like to sell to this market, and of financial companies who wish to manage assets for these individuals - these were all too fragmented, too under-the-radar, and too quiet. Only in the boom of the last six or seven years have critical numbers of each of these developed to the point where there was an identifiable, reachable target market.
Finally, the book is published by Bloomberg, which is an example of the changes that have occurred in the philanthropy marketplace and of those to come. That a financial press is bringing out this first guide for the mass market is telling - their readers care about this stuff, they see philanthropy as a core business skill, and the business press intends to serve them.
That said, what about the book's contents? The authors divide the work into three sections - Framework, Tools, and Organizing Your Resources. The first two are relevant to all their intended audiences - the last one is best for individual donors and their financial or legal advisers. Professional foundation staff (a small group, about 18,000 or so nationally, including both of the authors) may be less interested in the third section.
The logic of the sections is important - Brest and Harvey go to great lengths to present strategy absent ideology or issue. Their frame for thinking, their recommendations on strategy development, programmatic approach, asset allocation, evaluation, structure, and so on are determinedly issue-agnostic. It doesn't matter, assert the authors, if you are interested in the arts or health care, whether you are pro-life or pro-choice, whether you want your philanthropy to support micro-finance in Zimbabwe or Zen studies in Michigan - the guidance they offer is relevant.
And much of it is. Of particular use is the frame that the author's provide to help a donor locate their goals. They present a frame for thinking about the scale of philanthropic goals that I believe is truly important. This scale offer three dimensions to consider:
* Does the problem diminish the quality of life or does it threaten life itself?
* How long will the harm persist?
* What is the scope of the problem? (pp. 22-28, review copy)
These are three, judgement-free, axes that will help a donor articulate his/her goals and escape "zero-sum"comparisons of "infants or immigrants, arts or AIDS." This is valuable, it effectively "de-escalates" judgement value on values that often paralyze people.
Working from this three-dimensional analysis, Brest and Harvey take readers through carefully chosen, well-documented stories that illustrate real-life choices to define a problem, establish a funding strategy, and evaluate the support that is provided. They provide accessible, and relevant, discussions of technicalities such as expenditure responsibility grants, prizes and awards, and payout rates that will help donors make better decisions about their philanthropy. Simply put, the advice in this book will help people give smarter.
As useful as the advice is, I still found myself pondering two ironies as I finished my read. The first irony is that the same place the book succeeds is where I also think it falls short. No doubt about it, Brest and Harvey have synthesized and presented key elements of rational, strategic giving. Their chapters on goal articulation, strategy and evaluation logically lead them to their final section on organizing resources - the book takes to heart the idea that form should follow function. What it leaves out is the heart. Philanthropy is an industry, enterprises within it do compete as businesses, and it is becoming ever more rational, measurable and visible because of this. These are good things.
Philanthropy is also a labor of love. It is perhaps the only business where passion and volunteerism play major roles. No matter how strategic a donor or foundation becomes, they may still be pursue what some will consider to be foolish, frivolous, or redundant goals. No matter how strategic or effective (or neither) a foundation may be, at any point in time for any number of reasons (some rational, others perhaps not) the donor may pull the plug, redirect the resources, or simply decide to no longer participate. There is little to put an endowed foundation out of business, nothing to tell a donor "don't do that, it is actually harmful," or little that can keep someone from packing up her philanthropic playthings and going home. The most strategic foundation, the most carefully evaluated program strategy, and the most well-weighted goals will still be pre-defined by the donor's interests - be they environmental, health related, artistic, justice oriented, equality-seeking, or none of the above. So while the focus on strategy and measurement are in sync with two of the defining forces of philanthropy (markets and regulation), they are out of sync with the third, the heart and human nature.
The second irony of the book has to do with the timing of its release. Just as this book could not have been published 10 or 5 years ago, it is somewhat fitting that it is being released in the midst of a crisis-induced restructuring of American financial markets and the public systems that oversee them. The book was written during a boom that seemed to have no end, it is informed by a mindset that philanthropy as an industry will continue to grow in size and sophistication and it is intended to inform that growth strategically. Only hindsight will tell us if this transformative moment for markets and regulations is also a transformative moment for the business of giving.
One can easily see a need to be more strategic with declining philanthropic resources, just as Harvey and Brest lay out the need to be more strategic during boom times. Whether or not that will happen, however, is anyone's guess. If it does, it will more than likely depend on that amorphous, irrational, non-strategic third defining force, the heart of philanthropy, as the roles and shapes of markets and regulation are reconstituted.
The publication timing for Money Well Spent will either prove to be deeply ironic or deeply prescient. In either case, since any valid philanthropic strategy must account for the context of relationships between independent actions, public systems, and private markets, Brest and Harvey's message remains important, we just can't predict how well it will be heard.
Full disclosure: I had several opportunities to discuss the developing book with the authors and provided feedback on a penultimate version of the manuscript. I have to say, for all my love of blogs and RSS feeds, and reading the news on my iPhone it is still exciting to see a book become a book (as in the real artifact, bound paper with a nice cover, table of contents, index, the whole shebang). Even as it is, of course, also a website. ([...])
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How championing consumers led to ING Direct's revolutionary rise in the banking industry
Since 1996, ING Direct has grown from a mere concept to an ocean-spanning global enterprise, with over 20 million customers and more than $300 billion in assets. From the time this Internet-based direct bank first launched in Canada, it focused on serving ordinary people who felt abandoned by today's money hungry financial institutions and provided its customers with products they actually wanted--like savings accounts with high interest rates. This revolutionary idea was startling in its simplicity. The Orange Code recounts ING Direct's intriguing story, explaining the philosophy of its founder, Arkadi Kuhlmann, the "bad boy of banking," who fervently believes in the power of individuals to control their financial destiny, and his 12-year partnership with Bruce Philp, the branding consultant who helped Kuhlmann make ING Direct a cause to its own people and a household name across North America. In entertaining and inspiring style, Kuhlmann and Philp discuss the unconventional approach to business strategy, leadership, and management that built ING Direct. From refusing to promote credit cards to college students to pointing out frivolous expenses, Kuhlmann and Philp not only address the practical principles that have propelled ING Direct to the top, but they also help readers understand how making a cause of personal financial empowerment made everyone a winner in the ING Direct story. Engaging and informative, The Orange Code offers readers a rare look at this company and provides them with invaluable insights into making more inspired leadership decisions.
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Friedman and Schwartz's A Monetary History of the United States, 1867-1960, published in 1963, stands as one of the most influential economics books of the twentieth century. A landmark achievement, the book marshaled massive historical data and sharp analytics to support the claim that monetary policy--steady control of the money supply--matters profoundly in the management of the nation's economy, especially in navigating serious economic fluctuations. The chapter entitled "The Great Contraction, 1929-33" addressed the central economic event of the century, the Great Depression. Published as a stand-alone paperback in 1965, The Great Contraction, 1929-1933 argued that the Federal Reserve could have stemmed the severity of the Depression, but failed to exercise its role of managing the monetary system and ameliorating banking panics. The book served as a clarion call to the monetarist school of thought by emphasizing the importance of the money supply in the functioning of the economy--a concept that has come to inform the actions of central banks worldwide.
This edition of the original text includes a new preface by Anna Jacobson Schwartz, as well as a new introduction by the economist Peter Bernstein. It also reprints comments from the current Federal Reserve chairman, Ben Bernanke, originally made on the occasion of Milton Friedman's 90th birthday, on the enduring influence of Friedman and Schwartz's work and vision.
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In Investing from the Top Down, Anthony Crescenzi, esteemed financial author and chief bond strategist for Miller Tabak & Co., explains how to develop new, highly effective investment strategies by taking a macro view of the factors shaping industries and markets. Emphasizing the importance of economic and market cycles (as opposed to a bottom-up approach, which places valuation ahead of the big picture) top-down investing is better suited for today's global economy and will likely become the dominant strategy in the future.
Crescenzi provides more than fifty tools for analyzing domestic and international trends and indicators, such as GDP growth rates, inflation, interest and exchange rates, and energy prices. He then explains how to narrow your search down to region, total sales, price levels, competition, and entry/exit from market to make astute buying and selling decisions. Crescenzi explains why “thematic” investing is the ideal approach for:
- Taking full advantage of exchange traded funds (ETFs)
- Using the policies of central banks to steer your investments
- Designing diversification best suited for the long term
- Using sector selection to insulate your portfolio from risk
- Maximizing profits when market sentiment spikes or plummets
Investing from the Top Down covers every major financial instrument and investment choice, from bonds, treasuries, and currencies to real estate, private equity, and emerging markets. Crescenzi concludes with an extensive list of market indicators, providing specific advice on how to exploit them using a top-down investment strategy.
Investing from the Top Down provides everything you'll need to develop a sound strategy rather than making isolated choices. Comprehensive and forward-thinking, it will place you ahead of the game today and take you well into the 21st Century.
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This book focuses on the 11 men, lawyers and bankers, who are responsible for the creation of Wall Street's merger industry. It specifically concentrates on the events and personalities who dominated Wall Street during the takeover battles of the 1970s and 1980s. Lawyers Joe Flom and Marty Lipton, the godfathers of modern M&A, educated bankers on takeover laws and regulations as well as tactics. Flom and Lipton were also superlative businessmen who built their own firms to become Wall Street powerhouses. The two men drew into their orbit a circle of bankers. Felix Rohatyn, Ira Harris, Steve Friedman, Geoff Boisi, Eric Gleacher and Bruce Wasserstein were close to Lipton. Robert Greenhill and Joe Perella were close to Flom.
M&A Titans provides insight into the culture of the different investment banks and how each of the bankers influenced the firms they worked in as they became more powerful. Some such as Gleacher, Harris, Wasserstein, Perella and Greenhill clashed with the men running their firms and left. Others such as Friedman and Boisi stayed and profoundly influenced how the firm did business. The career of Michael Milken, perhaps the notorious name on Wall Street in the 1980s, is also examined as well as the actions and tactics of his firm, Drexel Burnham Lambert. Milken and Drexel paved the way for the growth of private equity and helped popularize attacks on management by investors such as Boone Pickens and Carl Icahn.
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Cooper has written a book that currently must be judged to be superior to any other book written on the Subprime mortgage backed bond catastrope that has led the American Treasury Secretary Paulson to advocate the government purchase of about 1 trillion dollars of bank and investment bank assets about which no one has the slightest idea of what their true worth is.
Cooper simply and easily dismantles the Efficient Market Hypothesis(EMH)that is the foundation of modern finance theory.This hypothesis is also the foundation of ALL modern macroeconomic theory.The EMH goes under the name rational expectations,real business cycles,New Classical Economics,and New Keynesian Economics in macroeconomics.Underlying both is the Subjective Expected Utility(SEU)decision theory,a hybrid of the Frank Ramsey,Bruno De Finetti,and Leonard J. Savage subjectivist theory of probability that is combined with the Von Neumann and Morgenstern expected utility theory.This theory assumes that the weight of the evidence available to decision makers is complete.This means that all decision makers know and can apply a unique probability distribution's mean and standard deviation, or act " as if " they did,before they make any decision.This case is a very special case of Keynes's weight of the evidence variable,w, where w=1.w is defined on the unit interval between 0 and 1 (Ellsberg's rho variable gives the same results as Keynes's w because rho is also defined on the unit interval.A rho =1 means that the decision maker has complete confidence in his information set and can specify a unique probability distribution).
The efficient market hypothesis assumes that w and rho =1,just as the rational expectations hypothesis does.Cooper,unfortunately,overlooks the fact that Minsky's financial fragility hypothesis,which shows how waves of speculation ,magnified and amplified by bank loans to speculators ,will morph into Ponzi finance schemes that lead to the collapse of the bubble and a crash , is directly built on Keynes's Chapter 21 analysis in his General Theory(1936;GT) which integrated Keynes's weight of the evidence analysis concerning w from chapters 6 and 26(sections 7 and 8) of the A Treatise on Probability(1921;TP)into his elasticity analysis on pp.304-306 of the GT.The crucial result is that a complete information set requires that the macroelasticity e = 1(or ed subscript =1).A e=1(this means the same thing as w=1 or rho =1)means that there is a complete information set that allows decison makers to calculate the riskiness of different alternative portfolios.The Efficient Market Hypothesis and Rational Expectations hypothesis will both hold.There will be no uncertainty or ambiguity(Ellsberg's term),only risk.However,Keynes points out that the general case is where e < 1(so both w <1 and rho <1).Uncertainty exists and results in a speculative demand for money.The greater the speculative demand for money is the greater the amount of involuntary unemployment and economic instability that will result.I have deducted 1/2 of a star because Cooper overlooks the fact that Keynes had already demonstrated theoretically that a Minsky crisis can occur whenever w or rho or e is less than 1.Minsky himself had absolutely no understading of the technical results derived by Keynes in chapter 21 of the GT.
Cooper redeems himself by showing how Mandelbrot's analysis of his general 4-parameter model, built around the Cauchy distribution's dangerous wild risk ,that, practically, goes out as far as 25 standard deviations ,demonstrates the special case nature of both modern finance theory and modern macroeconomic theory.Both theories are built on the Normal distribution's plus or minus 3 standard deviations covering 99.7 % of all outcomes.The Normal distribution is a special case of the Cauchy distribution.Heavy government regulation of the financial and banking system,aimed at stopping banker finance speculation ,can, as argued by Adam Smith(The Wealth of Nations,1776,Modern Library(Cannan)edition,pp.260-340) over 230 years ago in his 80 page discussion of why a central bank was needed,prevent the boom-bust turbulence of the Cauchy distribution from arising.A heavily regulated financial and macroscopic system can artificially create normally distributed outcomes with no more than plus or minus 3 standard deviations ,thus preventing the wild risk of the Cauchy from destroying the financial system.Deregulation and privatization automatically unleach the destructive potential of the Cauchy.Cooper covers this satisfactorily,but somewhat unevenly,in chapters 2,4,7,and 8 of his book.
This book is not meant for the general reader.The potential buyer needs to be familiar with both modern finance theory(EMH) and macroeconomic theory(REH) ,as well as Mandelbrot's work,to understand why the world's financial markets can be destroyed in a deregulated environment of the type that has been constructed between 1978 and 2008 in the United States and the World
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Hi, My Name is Chong Beng Lim. I am from Malaysia. I have just bought "The Snowball" from the Kinokuniya Bookstore on 29 September 2008. Well, I bought two of them, one I gave it to another good friend of mine.
This review is a tribute to Mr. Buffett for willing to share his secrets with the rest of the world. My great compliments to Ms. Alice Schroeder for doing such a great job. The book is really a gem, a jewel, a masterpiece! I am honoured and privileged to read it.I fervently believe that by reading this book it will instill the life values of Mr.Buffett in every readers!
I have just read about 2 chapters. The reason I am writing this review is that while I was reading this book, I kept shouting, "Gosh! Gosh!" This book is unbelievably incredible! Even two chapters, I feel like I have got my money back!
In fact, I am reading three books: Hot, Fat and Crowded by Thomas L. Friedman; The Snowball; The Christmas Carol by Charles Dickens. I couldn't help but get hooked by this book as it contains a wealth of valuable advice, a profusion of Warren's Secrets and a breathtaking view of Warren's philosophy.
I have taken down a few key tips from this book:
i)honesty and rationality
ii) failures contribute to rules of success
iii)We cannot use our past experiences to determine the future
iv) The airlines and the auto industry have not contributed to the wellbeing of investors
v)humility
vi)carry your own luggage
vii)respect your father (Warren hangs his father portrait at his office as a permanent feature)
There are some more as the notes are not with me now.
The kaleidoscope of photos of Buffett also gives me an instant snapshot of the life of Mr. Buffett. It was amusing and yet unbelievable when you saw Warren Buffett shaking hand with the little girl, Ariel Hsing who crushed him in a pingpong match on his 75th Birthday!
Remember, you have to pay $2.1 million to have lunch with him! You can't even learn everything from a lunch with him. Thus, I am absolutely convinced that by reading this book, you have earned more than $10 million dollars...as it enriches your mind constantly, it expands your horizons literally and finally when you have read this Snowball, you will grow from a tiny snowball to a gigantic snowball that will shake and move the world!
And, your life will never be the same!
Bon appetit!
Chong Beng Lim
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