The book “Investments” by renowned authors Zvi Bodie, Alex Kane and Alan J. Marcus provides a scientific perspective to help deconstruct investing over principles and objective laws that have held true for the past century. By removing blindspots and building a framework for investments, it aims to capture the timeless essence of investing. Covering concepts from asset pricing to risk management, it gives a comprehensive overview for everyone from hobbyist stock pickers to professional money managers at top financial institutions, helping them maintain independence and rational decision-making for satisfactory long-term returns.
Core premise that investing is challenging and requires a structured, scientific approach
The quotes from famous investors Graham, Buffett, Munger and Lynch underline the complexity of investing. Scientific investing is key as emotions and biases often undermine returns. The book provides frameworks to think systematically, sweeping aside assumptions to uncover key control points and processes for investing excellence. This timeless perspective is invaluable in turbulent, unexpected market environments.
Comparison of English texts’ clarity in conveying principles versus Chinese texts’ mathematical opacity
The reviewer shares from experience that English economic texts convey insights in a clearer, more accessible manner compared to Chinese texts that rely more on mathematical theorems beyond undergraduate level math. This explains why political economics is the only discipline taught using Chinese texts. The approach of English texts allows quicker grasp of core principles and essence.
Overview of essential canon – Investments, Money & Banking and Corporate Finance
The reviewer recommends Zvi Bodie et al’s “Investments”, Frederic Mishkin’s “Economics of Money, Banking and Financial Markets” and Ross & Modigliani’s “Corporate Finance” as an introductory canon that covers the breadth of finance. Reading these leads to appreciation of how theories are constructed and the thought frameworks involved, which is key for meaningful expertise versus superficial fluency.
How deeper expertise reveals gaps in common Chinese finance texts
After reading these foundational texts, the reviewer realized even certified accounting books poorly grasp the domain with haphazard explanations. This reflects a wider trend of English authors respecting reader comprehension versus Chinese authors prioritizing demonstrating their own expertise. The reviewer recommends references for accessing texts and papers.
Zvi Bodie, Alex Kane and Alan Marcus’ seminal text Investments provides a robust, structured approach to demystify investing using practical scientific principles developed over the past century. Its frameworks help overcome emotional biases to make rational decisions for optimal risk-adjusted returns. Covering core areas from asset pricing to risk management, it delivers foundational knowledge for everyone from casual investors to professional money managers.