Investment Management P or Japans Policy Trap

Investment Management P

Author: Bernstein

Investment Management provides a powerful package of systematic principles and cutting-edge applications for intelligent-and profitable-investing in the new world of finance. Its authoritative approach to the investment process is indispensable for coming to grips with today's rapidly changing investment environment-an environment that bombards the investor with an oversupply of information, with novel and complex strategies, with a globalized trading arena in a constant state of flux, and with radical innovations in the development of new financial instruments. Traditional investment methods no longer suffice for investors managing their own funds or for professionals entrusted with the wealth of individual and fiduciary institutions.

Edited by Peter Bernstein and Aswath Damodaran, widely respected experts in the field, this authoritative resource brings together an all-star team that combines Wall Street savvy with profound theoretical skills. The hands-on professionals who have contributed to this volume command high respect among academics in finance; the academic contributors, in turn, are also experienced in the rough-and-tumble of the Wall Street scene.

Together, they have designed the book to look at investing as a process-a series of steps, taken in the proper sequence, that provides the tools and strategies for optimal balancing of the interaction of risk and return. The analysis is at all points comprehensive and lucid as it moves from setting investment objectives to the best methods for selecting securities, from explaining how to measure risk to how to measure performance, from understanding derivatives to minimizing taxes, and from providing theessentials of portfolio strategy to the basic principles of asset allocation. In a unique chapter, the book also offers a searching evaluation of management and governance structures in the modern corporation.

One form of risk management is to make such successful investments that losses do not matter. Only luck can achieve that result; the real world requires decisions whose outcomes are never known in advance. That is what risk is all about. Every stage of the investment process-from executing a trade to optimizing diversification-must focus on making rational choices under conditions of uncertainty. The successful investor's toolkit has more inside of it than just the essential apparatus for selecting securities and allocating assets. The successful investor is also the one who has the knowledge, the confidence, and the necessary control systems to deal with the inevitable moments when forecasts go wrong.

Investment Management explores the investment process from precisely this viewpoint. It is a comprehensive and accessible introduction to investing in today's challenging marketplace-an ideal resource for serious investors and students.

A state-of-the-art program in investment principles and applications from topflight professionals.

Edited by Peter Bernstein and Aswath Damodaran, who are widely respected throughout the world of finance, this authoritative text brings together an all-star team to provide both a hands-on and theoretical overview of investing in today's challenging financial environment.

Once upon a time, Wall Street lived off little homilies like, 'buy low and sell high,' 'nothing ventured, nothing gained,' and 'don't put all your eggs in one basket.' Like all sayings that endure, these simple proverbs contain a lot of truth, even if not the whole truth. When wrapped into a body of theory that supports them with logic and a systematic set of principles, these elementary wisdoms pack a great deal of power.

Yet if the theory is so consistent, logical, and powerful, another fabled Wall Street saying comes to mind: 'If you're so smart, how come you're not rich?' The answer is disarmingly simple: The essence of investment theory is that being smart is not a sufficient condition for being rich. This book is about the missing ingredients.-from the Preface by Peter L. Bernstein.

Interesting textbook: Fortgeschrittene Finanzbuchführung

Japan's Policy Trap: Dollars,Deflation,and the Crisis of Japanese Finance

Author: Akio Mikuni

Until quite recently, the Japanese inspired a kind of puzzled awe. They had pulled themselves together from the ruin of war, built at breakneck speed a formidable array of export champions, and emerged as the world's number-two economy and largest net creditor nation. And they did it by flouting every rule of economic orthodoxy.

But today only the puzzlement remains -- at Japan's inability to arrest its economic decline, at its festering banking crisis, and at the dithering of its policymakers. Why can't the Japanese government find the political will to fix the country's problems? Japan's Policy Trap offers a provocative new analysis of the country's protracted economic stagnation.

Japanese insider Akio Mikuni and long-term Japan resident R. Taggart Murphy contend that the country has landed in a policy trap that defies easy solution. The authors, who have together spent decades at the heart of Japanese finance, expose the deep-rooted political arrangements that have distorted Japan's monetary policy in a deflationary direction.

They link Japan's economic difficulties to the Achilles' heel of the U.S. economy: the U.S. trade and current accounts deficits. For the last twenty years, Japan's dollar-denominated trade surpluses have outstripped official reserves and currency in circulation. These huge accumulated surpluses have long exercised a growing and perverse influence on monetary policy, forcing Japan's authorities to support a build-up of deflationary dollars.

Mikuni and Murphy trace the origins of Japan's policy trap far back into history, in the measures taken by Japan's officials to preserve their economic independence in what they saw as a hostile world. Mobilizing every resource to accumulate precious dollars, the authorities eventually found themselves coping with a hoard they could neither use nor exchange. To counteract the deflationary impact, Japanese authorities resorted to the creation of yen liabilities unrelated to production via the largest financial bubble in history. The bursting of that bubble was followed by massive public works spending that has resulted in an explosion in public sector debt.

Japan's Policy Trap points to the likelihood that Japan will run out of ways to support its vast pile of dollar claims. Should the day come when those claims can no longer be supported, the world could see a horrific deflationary spiral in Japan, a crash in the global value of the dollar, or both. The effects would reach far beyond Japan's borders. Mikuni and Murphy suggest that a reduction in Japan's surplus must be accompanied by a reduction in deficits somewhere else -- most obviously through far-reaching shifts in the American economy.

Table of Contents:

	Foreword
	Preface
1	The Policy Trap	1
2	The Preservation of Bureaucratic Power	38
3	Monetary Policy and Mercantilism	67
4	Hoarding Gold, Hoarding Dollars	96
5	Experimenting with Bubbles	125
6	Of a Great Bubble and Its Collapse	145
7	The Downward Spiral	171
8	The Policy Trap Revisited	189
9	The Anomalies of Contemporary Japan	214
10	The End of the Japanese System?	240
	Notes	263
	Index	279