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Life in the Financial Markets: How They Really Work And Why They Matter To You

Book Description

An accessible and thorough review of the international financial markets

Life in the Financial Markets—How They Really Work And Why They Matter To You offers the financial services professional, and anyone interested in knowing more about the profession, an entertaining and comprehensive analysis of the financial markets and the financial services industry. Written by Daniel Lacalle—a noted portfolio manager with EcoFin and well-known media personality—the book goes beyond a simple summary and offers solid advice on the future of the global financial markets. This great resource also includes a review of effective strategies and forecasts the trends that represent potential opportunities for investors.

The book reviews the recent history of the financial crisis and includes information on hot topics such as derivatives and high frequency trading. An in-depth section on investment banking is written from the perspective of a successful practitioner and provides clarity on several complex and overly politicized elements of the banking system. The author gives an expert's perspective on the debt markets, monetary policies, and quantitative easing, and helps explain the various issues surrounding sovereign debt, the Euro crisis, and austerity versus growth policies. Comprehensive in scope, this resource also offers an analysis of investment styles, from hedge funds to "long only" investments, as well as an in-depth look at corporate communication and its impact on markets and investments.

  • Offers an engaging and comprehensive analysis of the financial services industry

  • Includes information on the workings of the global financial system following the economic crisis

  • Contains a review of complex banking systems

  • Analyzes the various investment styles and answers the most common questions pertaining to investing

    Table of Contents

    1. Cover
    2. Title Page
    3. Copyright
    4. Dedication
    5. Preface
    6. Acknowledgements
    7. Part I: The financial markets: Who they are, what they are, how they work
    8. Chapter One: “Thinking against the box”
    9. Chapter Two: The financial market: Complex and volatile
      1. An enlightening crisis and a real shock
    10. Chapter Three: Welcome to London
      1. Valuation models
    11. Chapter Four: The market doesn't attack, it defends itself
    12. Chapter Five: The Lehman crisis and the change in mentality: Habits and customs
    13. Chapter Six: Traders, “robots” and speculators
      1. “Robots” and how the markets are adapting to a changing environment
      2. The commodities and oil market
    14. Part II: The debt crisis and the great lie of free money
    15. Chapter Seven: The debt market
    16. Chapter Eight: Welcome, investors!
    17. Chapter Nine: The European and sovereign debt crises
    18. Chapter Ten: Credit-rating agencies
    19. Chapter Eleven: When the problem only seemed to be Greece
    20. Chapter Twelve: Why was the break-up of the euro feared?
    21. Chapter Thirteen: Evil speculators: Someone else is to blame
      1. Credit default swaps
    22. Chapter Fourteen: Snowballing debt
    23. Chapter Fifteen: The damned risk premium
      1. What is the risk premium?
    24. Chapter Sixteen: Derivatives: Weapons of mass destruction?
      1. How long have derivatives been around?
      2. What are they used for?
      3. Purpose and uses of derivatives
    25. Chapter Seventeen: The illusion of easy money: The investment banks and the great deception
    26. Chapter Eighteen: Stimulus policies and kicking the can down the road
      1. The impact of quantitative easing in emerging markets
    27. Chapter Nineteen: Lies and mistakes of the debt crisis
      1. Eight myths about the crisis
      2. Bitcoin: Free currency, bubble or Ponzi scheme?
      3. Ten myths about tax havens
    28. Chapter Twenty: Economic liberty and austerity
      1. Austerity and growth
    29. Part III: Hedge funds and the stock market
    30. Chapter Twenty-One: Hedge funds: The bad guys of the economic crisis?
    31. Chapter Twenty-Two: Active management
    32. Chapter Twenty-Three: Critics and reality
    33. Chapter Twenty-Four: Strategies
    34. Chapter Twenty-Five: Building portfolios
      1. Portfolio vs. index
    35. Chapter Twenty-Six: Closeness makes the heart grow fonder: How to identify investment opportunities
      1. Investment process
    36. Chapter Twenty-Seven: Short positions in a portfolio
    37. Chapter Twenty-Eight: Banning short selling and the Tobin tax
    38. Chapter Twenty-Nine: Recommendations
      1. Watch out for consensus and crowded trades
      2. Beware following government messages
      3. Pay attention to the cost of capital
      4. In a bear market the investor is never conservative enough
      5. Be careful of dividends
    39. Chapter Thirty: The long-term illusion… and the opportunity of value investing
      1. Value investing: All is well that starts well
      2. Good liquidity
      3. Low leverage
      4. High gross margins
      5. A profitable business
      6. Qualitative factors
      7. Looking for good entry points
    40. Chapter Thirty-One: A strange case: Companies with politicians
      1. My favourite “shorts”
    41. Chapter Thirty-Two: Communication with the market and attractiveness to investors
    42. Chapter Thirty-Three: Why invest in a hedge fund?
    43. Chapter Thirty-Four: Ten golden rules for investing
    44. Chapter Thirty-Five: “Warning” phrases and comments
    45. Chapter Thirty-Six: Books and films about the market
    46. Chapter Thirty-Seven: A day in the life of an investment fund
    47. Chapter Thirty-Eight: Farewell
    48. Euro-crisis and “exceptions”
      1. Cyprus: Another “exceptional” episode in the European crisis
      2. The contagion effect
      3. What may happen in Spain?
    49. Recommended Reading
    50. Index
    51. End User License Agreement