Investment-management

The information provided in this book is extremely dated and unrealistic. I live in California and I do understand the real estate prices are much higher on average than most parts of the country. However, he uses an example of an average 3BR, 2BA home selling for between $10,000 and $15,000 and continues to use these numbers throughout his book. Somebody tell me where these homes exist? Downtown Baghdad? He gives an example of how to determine the value of a rental income property. He says to take the monthly rental amount and multiply it by 100 to determine the value of the property. His example was $150 monthly rent x 100 = house value of $15,000. I own a rental that rents for $1500. If I used his example $1500 x 100 = $150,000 right? Wrong!!! This same property will sell today for $375,000, which means a buyer's tenants would have to pay $3,750 per month. Gee, do these numbers ad up? You figure!

Other reviewers have stated that this book is dated and it is but that misses the fact that the basic premise of the book is still valid. With the way prices are going up in some places. you'd need a new edition every year to keep current. Look past that and grasp the fact that it's possible to become financially independent by owning as few as three rental houses and the one you live in.

This is a very unique book in the field of real estate investing that will expose you to thinking outside the box. The goal of all investing should be to achieve financial independence, not owning a bunch of houses.

There are areas of the country where this plan won't work as well as others because rents don't begin to cover the operating expenses and mortgage unless you go in with a huge down payment. But, even though those who live in the hyper-markets of San Diego, Boston or DC won't believe it, there are still very nice areas of the country where you can buy houses all day for less than $100,000. And in those markets, this plan will work.

David Grzesiek has produced in this title, a very detailed, and specific introduction to making money in the real estate business. Avoiding the hyperbole, and excessive claims of other titles in this field, he details methods, and techniques for making profit in single family homes. These are backed up with charts and statistics. The illustrations he uses are not current in the values represented, but he is more interested in conveying understanding of principles, which translate into whatever figures you require with little effort.
Not a make money overnight book, nor a title that neglects detail amidst "positive attitude" bluff, this is a readable, accessible title that I believe would assist people in making a start in a profitable field.

This is probably the ideal introductory textbook for advanced undergrad or MBA/MSc Finance majors for their first Financial Engineering or Risk Management courses.

New students of these subjects would benefit more from reading this textbook than from reading the much more celebrated (whether deserving or not is up to debate) and yet much more expensive John Hull's classic 'Options, Futures, and other Derivatives', despite the fact that Hull's book is a favorite among many college professors (Hull's book was, incidentally, the textbook used in my MBA options and derivatives course)

There are many reasons that I feel this book represents good value and provides a smooth introduction into the world of financial engineering:

1. Comprehensive: All the major financial products and derivatives are thoroughly covered. Advanced topics such as Chooser options and real options are included as well.

2. Available computer/spreadsheet models: To supplement the excellent coverage in the textbook, the author have made available codes on his website for students to download and to further their self-study. The spreadsheets are professionally done and I found them very useful, either as learning tools or as template to develop more advanced models.

3. Clarity of exposition: The style is straightforward, avoiding unnecessary jargons. Yet the authors walk you through each step of the way using examples, graphs(plenty of them), fully developed equations, and tables.

4. Math and theoretical Rigor: This book does not lack mathematical rigor. Technical appendices are included as well, e.g. Ito's Lemma. If needed, relevant literature is quoted for the student to further his/her study.

5. Solid Value: this book can be had for less than fifty dollars. A bargain compared to many other finance books of similar caliber. Getting this book is like getting two for the price of one: both the financial engineering section and that of risk management could have been sold as two separate volumes.

With this book the authors have paved the way for the new students of FE and Risk management to explore these fascinating world. You will not regret the purchase.

This book draws on the PhD course that Prof. Chacko teaches at Harvard Business School and the substantial real-world experience with derivatives of both authors to offer a solid package that is useful for both theory and practice. There are other books with clear and rigorous mathematics (e.g. Wilmott), variety of methodologies for pricing (e.g. Neftci) and guides to practical hedging (e.g. Taleb), but this one presents all three components and is therefore a must-have for any serious derivatives shop. Highly recommended.

At the outset, it is important to mention that my special area of interest is cost of capital with finite cash flows (CF). And in my review, it is this point that I would like to address.
In chapter 10, compared to similar books, the author presents a good detailed exposition on the cost of capital. However, my big complaint is that the author assumes that the formulas on the cost of capital that are derived from CF in perpetuity simply carry over to finite CF.
In practice, we derive finite cash flows from financial statements and on grounds of simplicity, one may use the formulas from CF in perpetuity. However, it is not self-evident that the formulas from CF in perpetuity are relevant and appropriate to finite CFs. This may or may not be true, but the equivalence certainly needs to be demonstrated with some simple numerical examples.

The book deals with the emerging markets' specific problems of investment valuation and financial decisioning. Elementary financial methodologies are modified to capture the different variabeles in emerging markets. It is an easy to read book but I would have liked it to be more in-depth than it is now. It gives, however, a nice structured view on emerging markets valuation theory.

I'm not a CFA candidate, but I've been an investor for years and always appreciate learning more about the field. My father was president of the CFA for a couple of years, and after 15 years working on Wall Street I have a reasonably broad understanding of some finance.

What impressed me most about the book was how short and terse the definitions were. Clearly they are useful and present good insight into what's important and why.

What impressed me least was the lack of mathematical rigour (perhaps one can't have both brievity and exactness?). For example, many of the formulas only work for specific instances, and details about yield/rate conventions are omitted.

Overall, it struck me as useful overview and quick reminder to financial analysis and the language/terms used. It's not really indispensable, and is not authoritative. But for a quick refresher, or ballpark estimates it's fine.

This is the only book of its kind, so far. The author compiled this pocket guide after completing his CFA program and realising that the vast concepts, terms and designations learnt were soon being forgotten.

That being the case, candidates of, as well as those who have completed, the CFA program would find this book a useful one-stop guide to all those concepts, terms and designations learnt in the pursuit of the CFA designation.

The book is arranged broadly around the various topics of the CFA program i.e. Quantitative Methods, Economics, Financial Statements Analysis, Equities, Fixed Income, Derivatives, Real Estate, Portfolio Management, Ethics, Behavioural Finance. As such, the CFA candidate would find this book more useful than say, a general finance/business masters student.

But I reckon that this book, though published as recent as this year, is already in need of an update. The CFA syllabus is constantly evolving. As a result, a number of concepts in say, Level 1 of the CFA Program, are not found in this book. Also, a number of the textbooks used in the CFA program which the author had based his book on, have either been superseded by newer editions or replaced all together.

All in all, I found this to be a useful book and a unique concept. Until a better book comes along, I will be using this book religiously to prepare for the CFA exams as well as to refresh my memory.

As a CFA candidate, I find this to be a useful summary of the key concepts that we are taught during the course of the programme. However, regard it as more of a "Cliff's Notes" of the programme -- with all its inevitable shortcomings -- but a handy little reference piece nonetheless. After completion of the programme and years down the road, I am sure that I will find it quite useful in helping to jog my memory and the sleepless nights that the CFA programme gave me! -- I hope, however, that a revised version will be introduced and perhaps with a less odd title. It is not a book for everyone, but anyone who wishes that s/he had made notes whilst studying for the CFA programme will find this book useful.