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  • aldreydyman

    Book Reviews Dyman Associates Publishing Inc: The World’s First Stock Exchange

    3 years agoReply
    In his famous book Confusión de confusions Joseph Penso de la Vega wrote: “If one were to lead a stranger through the streets of Amsterdam and ask him where he was, he would answer ‘among speculators,’ for there is no corner where one does not talk shares.” And, Lodewijk Petram adds, “the people of Amsterdam were talking about options, too, and forward selling, quotations and prices, risk and speculation—all relating to the trade in the shares of the Dutch East India Company (the Vereenigde Oost-Indische Compagnie, VOC), which had been established in 1602. Fortunes were made and lost, and the men who engaged in this trade were wholly in thrall to it.”

    Petram did extensive archival research, including mining the records of active traders, to shed new light on de la Vega’s account of the Amsterdam stock market. The Dutch edition of his book appeared in 2011. Columbia Business School Publishing/Columbia University Press has just released the English edition, The World’s First Stock Exchange, skillfully translated by Lynne Richards. It’s an engrossing tale.

    Traders in Amsterdam occasionally used questionable strategies--strategies that have endured, in both legal and illegal manifestations. They engaged in “short selling through forward contracts, spreading rumors, buying even more shares.” These “vile practices” were decried in petitions to the government by the directors of VOC, who argued that they were “very disadvantageous to the investors and particularly the many widows and orphans.” Petram notes that “the number of widows and orphans who were dependent on an investment in the Company would have been very small indeed, but playing on their painful situation pricked the puritanical conscience of the authorities.” In February 1610 the government issued an edict banning naked short selling, a ban that share dealers blithely ignored.

    Large numbers of VOC investors had no direct experience in trading. “If these shareholders wanted to sell their shares … they had to [travel to Amsterdam and] brave the bear pit of the exchange, where they were complete novices.” (p. 102) By 1633, however, they were offered an alternative—to do business with a market maker (initially, the Raphoen brothers) who would make “a small margin on every deal because they always offered a little under the market price when buying and asked for slightly more when selling.”

    The Raphoen brothers also played a major role in standardizing the VOC share at 3,000 guilders, a huge sum at the time. “And as the share price rose, the amount that actually had to be paid for a share became even larger. In the 1640s the price of a Company share stood almost continuously at above 400, which meant that over 12,000 guilders had to be paid for a share with a nominal value of 3,000 guilders. To put this in perspective, in 1645 the substantial and prestigious canal-side mansion (with a rear annex) at 105 Herengracht was sold for 5,100 guilders.” The always shrewd Raphoen brothers bought up odd lots of VOC stock and combined them into 3,000-guilder shares, which could be sold for a better price.

    In his famous book Confusión de confusions Joseph Penso de la Vega wrote: “If one were to lead a stranger through the streets of Amsterdam and ask him where he was, he would answer ‘among speculators,’ for there is no corner where one does not talk shares.” And, Lodewijk Petram adds, “the people of Amsterdam were talking about options, too, and forward selling, quotations and prices, risk and speculation—all relating to the trade in the shares of the Dutch East India Company (the Vereenigde Oost-Indische Compagnie, VOC), which had been established in 1602. Fortunes were made and lost, and the men who engaged in this trade were wholly in thrall to it.”
  • aldreydyman

    Book Reviews Dyman Associates Publishing Inc: Clash Of The Financial Pundits

    3 years agoReply
    How the Media Influences Your Investment Decisions for Better or Worse by Joshua M. Brown and Jeff Macke (McGraw-Hill, 2014) is a book by financial pundits about financial pundits. It alternates between reflections on the financial media (I assume written by Josh Brown) and interviews conducted by Jeff Macke. The interviewees are Jim Rogers, Ben Stein, Karen Finerman, Henry Blodget, Herb Greenberg, James Altucher, Barry Ritholtz, and Jim Cramer.

    Since both authors are members of the financial media (Brown is author of The Reform Broker blog and a regular contributor to CNBC, Macke is the host of Breakout on Yahoo Finance), the reader can’t expect to be told: “just turn off the news.” Instead, the authors try to explain which pundits may be worth listening to and which ones are just noise, or worse.

    For investors who are not intrinsically skeptical and who have no idea of how to separate the wheat from the chaff, the authors offer a few good pointers. For the rest of us—hardened, cynical folk that we are, the interviews offer some good tidbits.

    The book has a strange subtext, along the lines of “I once was lost but now I’m found.” Jeff Macke recounts his career-killing “Car People” episode on the now defunct evening program CNBC Reports and his subsequent emotional descent and recovery. And he interviews three insiders who to a greater or lesser degree faced their own professional crises: Henry Blodget, banned from the securities industry but now the editor and CEO of Business Insider; Jim Cramer, who took a drubbing on Jon Stewart’s The Daily Show; and James Altucher, who seems to specialize in failing and bouncing back—and writing about it.

    Whom do I personally consider worth listening to? First, those who readily admit they don’t know the answer. Bob Shiller comes to mind here. Second, those who move markets, such as David Tepper. And third, those who are both bright and entertaining, with Warren Buffett being perhaps the prime example. I assiduously avoid Cassandras, dim bulbs, and pompous pretenders—and does that ever save me a lot of time!
  • aldreydyman

    Book Reviews Dyman Associates Publishing Inc: The Investor's Paradox

    3 years agoReply
    1 Like
    Investing is paradoxical, as many that read my blog would know. The market has cycles. There are overall boom/bust cycles. There are minor cycles between the major cycles. Strategies fall in and out of favor. What is an investor to do? Even harder, what should one who selects assets managers do?

    It is hard to select talented investment managers. I know this, because I have done it many times in my career. This book points out the difficulties in selecting managers. Were the returns due to skill, or did he hit a lucky streak? If you are looking at the numbers only, it would be hard to tell. Asking managers detailed qualitative questions could help, as could looking at the current portfolio, and asking:


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  • aldreydyman

    Book Reviews Dyman Associates Publishing Inc: All the Presidents’ Bankers

    3 years agoReply
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    Book Reviews Dyman Associates Publishing Inc: All the Presidents’ Bankers

    The Unholy Alliance between Presidents and Bankers


    Calling a book a “tour de force” is a cliché, but every once in a while this overused phrase fits, and that is the case with All the Presidents’ Bankers by Nomi Prins. Consider what Prins has pulled off in this meticulously researched yet readable work (her fourth book about the U.S. financial system): nothing less than tracking the often unholy alliance between American presidents and bankers across a century of American history, two world wars, the Cold War, market booms, busts and panics, and bailouts funded courtesy of American taxpayers.

    From Teddy Roosevelt to Barack Obama, J.P. Morgan and Charles Mitchell to John Reed and Jamie Dimon, presidents and bankers have depended on one another to open foreign markets, finance wars, and ensure the U.S. dollar became and remained the world’s dominant currency. As Prins notes, “No other country on the planet is driven by such a critical symbiotic and costly relationship.”


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  • aldreydyman

    Book Reviews Dyman Associates Publishing Inc: "Don't Kill the Messenger!"

    3 years agoReply
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    Whistleblower Don Soeken, author, "Don't Kill the Messenger!"

    My guest today is Donald Ray Soeken, author of Don't Kill the Messenger! How America's Valiant Whistleblowers Risk Everything in Order to Speak Out Against Waste, Fraud and Abuse in Business and Government.

    Joan Brunwasser: Welcome to OpEdNews, Don. What made you qualified to write this book and why are you called "The Bulldog" for whistleblowers?

    DS: I take cases no one else will - and I win. I've counseled hundreds of whistleblowers over the past 40 years. I tell all in my recent book, focusing on just a few of the whistleblowers I've helped. In some cases, we have gone to trial and won, as in the Hyatt case against Northrop. Judges have declared me an expert witness uniquely qualified to testify about whistleblower psychology. It's a tough road - all whistleblowers and all whistleblower advocates face setbacks from some of the most entrenched corrupt interests. Nevertheless, since 1980, I've helped whistleblowers win more than 100 million dollars in court awards and settlements.



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