Buch, Englisch, 190 Seiten, Format (B × H): 157 mm x 235 mm, Gewicht: 450 g
Reihe: Wiley Finance Series
Buch, Englisch, 190 Seiten, Format (B × H): 157 mm x 235 mm, Gewicht: 450 g
Reihe: Wiley Finance Series
ISBN: 978-0-470-02739-4
Verlag: Wiley
In this stimulating new book, the authors bridge the gap between academic and practical experience by advancing the liquidity theory of asset prices. For many investment managers, liquidity is a crucial subject to which academics have paid too little attention. The book demonstrates that knowledge of liquidity is vital for understanding markets. For academics who have not been thoroughly exposed to working in financial markets, the liquidity theory of asset prices will add to the explanatory power of the Efficient Markets Hypothesis.
The liquidity theory of asset prices explains that an investment transaction often takes place because someone either has cash to invest or needs to raise cash. In the economy as a whole the difference between the amount of cash waiting to be invested and the need to raise cash can be substantial; moreover, an imbalance can persist for many months. Markets react accordingly, going up or down as the case may be. When a market is rising, people become optimistic, and pessimistic when a market is falling. If a trend continues investors start acting as in a crowd. Crowd psychology becomes important. Booms and busts follow.
An understanding of these forces is important not only for investors but also for industrialist and governments. This book is the only practical explanation of the liquidity theory of asset prices currently available and the text has been enhanced by its use on MBA and Continuous Professional Development courses. It is guaranteed to go a long way to remedying an embarrassing lack of understanding of an economic force which has moved to the centre stage of financial market understanding.
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Weitere Infos & Material
PART I: THE LIQUIDITY THEORY.
1 Types of Trades in Securities.
1.1 Liquidity trades and portfolio trades.
1.2 Information trades and price trades.
1.3 'Efficient prices'.
1.4 Expectations of further rises or falls.
2 Persistent Liquidity Trades.
2.1 Demand for money.
2.2 Supply of money.
2.3 Monetary imbalances.
2.4 Excess money in the economy.
2.5 Summary.
3 Extrapolative Expectations.
3.1 Sentiment.
3.2 Intuition.
3.3 Decision-taking inertia.
3.4 Crowds.
3.5 Fundamental and monetary forces in the same direction.
4 Discounting Liquidity Transactions.
4.1 Speculation.
4.2 Timing.
4.3 Short-term risk versus profits in the longer term.
Appendix: Speculation and market patterns.
5 Cyclical Changes Associated with Business Cycles.
5.1 Introduction.
5.2 Direct and indirect effects of money on asset prices.
5.3 Strategy.
5.4 Timing.
5.5 Sequences.
5.6 Triggers.
6 Shifts in the Savings Demand for Money.
6.1 The peak of a business cycle.
6.2 Running down bank deposits.
Appendix 6A: Some bond arithmetic.
Appendix 6B: Government bond markets.
PART II: FINANCIAL BUBBLES AND DEBT DEFLATION.
7 Financial Bubbles.
7.1 Detection of a bubble.
7.2 Phases.
7.3 Crosschecks.
8 Debt Deflation.
8.1 The cure for debt deflation.
Appendix: Ignorance of Irving Fisher's prescription.
PART III: ELABORATION.
9 Creation of Printing-press Money.
9.1 The UK in more detail.
9.2 Four policies.
10 Control of Fountain-pen Money and the Counterparts of Broad Money.
10.1 Control of bank lending.
10.2 Bank capital.
10.3 The UK in more detail.
10.4 The 'counterparts' of changes in broad money.
10.5 Relationship between the counterparts.
11 Modern Portfolio Theory and the Nature of Risk.
11.1 Summary.
11.2 Expected yield.
11.3 Risk.
11.4 Exploiting skewness.
12 Technical Analysis and Crowds.
12.1 Trends and trading ranges.
12.2 Crowd behaviour.
12.3 Information.
12.4 Trends and momentum.
12.5 Approaching a turning point.
12.6 Turning points.
12.7 Further reading.
13 The Intuitive Approach to Asset Prices.
13.1 Intuition that is a reflection of monetary forces.
13.2 Intuition that is not a reflection of monetary forces.
13.3 Forced selling.
14 Forms of Analysis.
14.1 Different languages.
14.2 Macroeconomic models.
14.3 Disequilibrium.
14.4 Intended and actual transactions.
14.5 Accounting identities.
Appendix: Direct Estimates of Supply and Demand for Credit in the US.
PART IV: EVIDENCE AND PRACTICAL EXAMPLES.
15 The UK Markets Prior to 1972.
15.1 UK money supply and a combined capital market price index, 1950-72.
15.2 UK money supply and the equity market, 1927-72.
16 The US Equity Market 1960-2002.
17 Two Forecasts.
17.1 Health warning.
17.2 Prediction of the October 1987 crash.
17.3 Prediction of the top of the US equity market in April/May 2000.
17.4 Postscript.
18 Debt Deflation, Practical Experience.
18.1 The US in the 1930s.
18.2 Japan in the 1990s and early 2000s.
PART V MONITORING DATA.
19 Monitoring Current Data for the Monetary Aggregates.
19.1 Erratic data.
19.2 Which aggregate?
19.3 A target aggregate.
19.4 An expert approach.
19.5 Timing of the availability of data.
19.6 Understanding the current behaviour of the market.
Appendix 19A: Monetary targets in the UK.
Appendix 19B: Distortions to monetary data in the UK.
Appendix 19C: Velocity of circulation.
20 Monitoring Data for the Supply of Money.
20.1 Printing-press money.
20.2 Fountain-pen money.
20.3 The counterparts of broad money.
20.4 Forecasts.
20.5 Management information.
20.6 Discernible trends.
20.7 The public sector's borrowing in foreign currency and from abroad.
21 The Different Sectors of the Economy.
Conclusions.
Glossary.
References.
Index.
