Book Description
Most people lose in the markets for one simple reason – they trade emotionally. Good trading is not a question of doing, it is a question of being. How do you trade?Trading is a life experience. It is not like any other business. The beauty of trading is that it becomes an expression of your own personality. The truth is, good traders don’t do, they simply are. And to become a good trader you have to create a model built around an approach that suits you. The Way to Trade will help you do just that.Find your own route to success.

In the 1990s, America’s focus on productivity and innovation led to huge gains in technology, communication, and healthcare stocks, and contributed to the transformation of the U.S. stock market from a value (dividend-paying orientation) to a growth (nondividend-paying) bias. During this time, forward thinking value managers began to develop analytical tools for valuing nondividend paying stocks. These tools allowed them to evaluate and identify the best investments in both traditional and nontraditional value sectors. At the forefront of this movement was author Nancy Tengler who, along with Noel DeDora, developed “Relative Value Discipline,” an approach-which combines two proven methods for valuing growth stocks: Relative Dividend Yield and Relative-to-Price Sales. The combination of these approaches allows individuals to invest across the investment universe regardless of dividend policies. New Era Value Investing introduces the proven method known as Relative Value Discipline by combining the excitement of developing a new investment discipline with the lessons learned through the application of this new methodology in the real world. In addition to providing an insider’s look at an investment manager’s experience in adopting a new investment approach, this book creates a context for understanding the transformation of the U.S. economy, and offers expert insights beyond those of traditional value theory.

The New Reality of Wall Street explains what went wrong in the 2000-2002 markets, and what investors can do to build a solid portfolio amid the turbulence and fear that still grips much of investing. This important book also discusses strategies to recoup losses, where to find the best new investment opportunities, and much more.

From the Back Cover
This much-needed book, from a selection of top international experts, fills a gap by providing a manual of applied quantitative financial analysis. It focuses on advanced empirical methods for modelling financial markets in the context of practical financial applications.

Data, software and techniques specifically aligned to trading and investment will enable the reader to implement and interpret quantitative methodologies covering various models.

The unusually wide-ranging methodologies include not only the ‘traditional’ financial econometrics but also technical analysis systems and many nonparametric tools from the fields of data mining and artificial intelligence. However, for those readers wishing to skip the more theoretical developments, the practical application of even the most advanced techniques is made as accessible as possible.

Depending on the model being described, different software will be used, and examples included on the accompanying CD. Data and details will be provided to enable the reader to transfer the routines to a different software package.

The book will be read by quantitative analysts and traders, fund managers, risk managers; graduate students in finance and MBA courses

It is divided into five parts:

* Part I sets out the financial and regulatory contexts that explain the rapid development of these three areas during the last few years and shows the ways in which the Risk Management function has developed recently in financial institutions.
* Part II is dedicated to the underlying theories of Asset Management and deals in depth with evaluation of financial assets and with theories relating to equities, bonds and options.
* Part III deals with a central theory of Risk Management, the general theory of Value at Risk or VaR, its estimation techniques and the setting up of the methodology.
* Part IV is the point at which Asset Management and Risk Management meet. It deals with Portfolio Risk Management (the application of risk management methods to private asset management), with an adaptation of Sharpe’s simple index method and the EGP method to suit VaR and application of the APT method to investment funds in terms of behavioural analysis.
* Part V is the point at which Risk Management and Asset and Liability Management (ALM) meet, and touches on techniques for measuring structural risks within the on and off balance sheet.

The book is aimed both at financial professionals and at students whose studies contain a financial aspect.

“Esch, Kieffer and Lopez have provided us with a comprehensive and well written treatise on risk. This is a must read, must keep volume for all those who need or aspire to a professional understanding of risk and its management.”

Some of the area that the a company/stock (to buy) should have a lot of these criteria:
1. Product and service with potential increase in sales for seveal years
2. Management who commited to develop products to continue growth
3. Size of company’s research versus its size (enough research needed)
4. Good sales organization
5. Worthwhile profit margin
6. Activity to improve profit margin
7. Good labor and personal relation
8. Outstanding executove relations
9. Depth in management
10. Good accounting controls and cost analysis
11. favorable (degree of skills) compare to the competition
12. Long range outlook on profit
13. Equity financing in the next couple years should ot cancel the existing shareholder benefit from the anticipated growth
14. Management talk freely to investor about tings that goes well and also when things doesn’t go well
15. Management needs to have unquestionable integrity

Five don’ts for investor:
1. Don’t buy into promotional companies (development companies)
2. Don’t ignore stocks just becuase it is traded over the counter
3. Don’t buy stocks because you like the tone of annual report
4. Don’t assume the high price is an indication of future growth
5. Dont quibble over small fraction (when you buy a stock)

Five additional don’ts for Investor
1. Don’t overstress diversification
2. Don’t be afraid buying in a war scare
3. Don’t forget your Gilbert and Sullivan
4. Don’t fail to consider time as well as price in buying a true growth stock
5. Don’t follow the crowd

This book also covers what a good business should have (it recaps of what they teach you in business school). I have 10 years of investing experience before I read this book (I know I should have read this book earlier), and in my opinion this book should work as a guideline to develop our own investing philosophies (and not our philosophy itself). There are no one size fits all strategy in the investing world. This book will also help to open your eyes (especially for beginner) that investing (the right way) is not easy and is a complex process, however the result from a patient and diligent investor could be great.

There are 3 important aspects of a business (apart from the stock price) which this book will cover most of them:
1. The Business (and the Industry)
2. The Financials
3. The People (Management, Personnel)

I also recommend you all to read Ben Graham’s “The Intelligent Investors” (with commentary by Jason Zweig who will give more recent and relevant example), and Peter Lynch’s “One up on Wall Street”. Once you read them all (coupled with some real experience), then you are ready to be an investing pro…

Happy Investing!

Review
John H. Cochrane, University of Chicago : I am extremely enthusiastic about this book. I think it will quickly become a classic. Like Sargent’s and Varian’s texts, it will be a centerpiece of the core cirriculum for graduate students.