Contents
Acknowledgements / xi
How it all began / 1
part 1 One-way ticket
1 From Zurich to disaster / 5
The rules of compounding
/ 9
Whatever you want / 11
Gains and losses / 13
2 Taking risks / 17
Take a chance on me
/ 18
The business of risk / 21
The luxury gap / 23
3 The leap of faith / 31
Safety and danger
/ 31
Risk and return / 34
Buys and sells / 38
part 2 Welcome to the jungle
4 Damn clients / 49
The trading floor
/ 50
Spreadsheet monkeys / 52
Proprietary trading / 53
It’s raining middlemen / 54
viii Contents
5 An equitable solution / 61
Who predicted futurology?
/ 61
Stock-pickers of the world unite and take over / 63
Value, growth, neither, both / 67
6 Promises, promises / 71
The naked position
/ 71
The time value of money / 73
Wall Street Blues / 79
Income and safety / 82
7 Very interesting, Mr Bond / 87
The old principle/principal trade-off
/ 87
The name’s Safety / 89
Ratings measure risk – usually / 90
8 Chinese walls come tumbling down / 95
Deals on wheels
/ 96
Front running / 98
EBIT doh! / 102
Behind the Chinese walls / 105
part 3 You can always get what you want
9 The meek shall inherit the mineral rights / 115
Essential ingredients – rice, wheat and oil
/ 116
Why do people buy gold? / 120
Price is where supply shakes hands with demand / 122
10 The numbers game / 125
Yield and time
/ 126
The interest rate and bond price see-saw / 129
11 A lottery ticket is a contract too / 133
Welcome to World Lotto!
/ 133
Bringing home the risky bacon / 136
ixContents
12 Out of the money / 139
Difficult choices about options
/ 139
Call me / 141
13 In the future when all’s well / 147
Tomorrow always comes
/ 147
Markets and counters / 149
part 4 All’s fair in love and finance
14 Currency for the devil / 159
24-hour Forex people
/ 160
The currency banana / 160
Inflation is always the great destroyer / 167
Spread your love / 168
15 Paradigm city / 175
Hedge funds begin with a lie
/ 176
The scramble to be first / 177
Death insurance / 179
The insurance cycle / 181
Pension funds v hedge funds / 182
16 Confessions of a dot-com faker / 185
Silicon ditch
/ 185
Burn money / 187
17 The brain game / 193
How do we value our emotions?
/ 193
Some women are from Mars as well / 195
My investment questionnaire / 196
The right profile / 199
Classifying investors / 200
18 Swaps / 209
Border crossing
/ 210
x Contents
Home advantage / 210
Offshore pumps and scams / 212
19 Throwing darts at a random cat / 219
Asset allocation and fund management
/ 221
Get active / 223
On Margate sands / 225
part 5 Laying all the economists end to end
20 The bottom line / 235
Busts and burnt fingers
/ 236
The stumble from recession to depression / 237
The terrible cost of unemployment / 238
Coming out of recession / 239
21 Happy days are here again / 247
Boom time bubbles
/ 248
The fool in the herd / 249
22 Crash / 259
Homes fit for NINjAs
/ 259
Born to run / 262
23 Scam / 265
The truth about rhodium
/ 266
Teamwork in action / 270
24 Revelations / 277
Is there a master plan?
/ 277
The teacher/student relationship / 282
How it all ended / 287
Index / 289
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