Cocktail Economics: Discovering Investment Truths from Everyday Conversations
- By Victor A. Canto
- Published May 7, 2007 by FT Press.
- Copyright 2007
- Dimensions: 6x9
- Pages: 336
- Edition: 1st
- ISBN-10: 0-13-243273-0
- ISBN-13: 978-0-13-243273-3
- eBook (Watermarked)
- ISBN-10: 0-13-235428-4
- ISBN-13: 978-0-13-235428-8
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Product Author Bios
VICTOR A. CANTO is Chairman and Founder of La Jolla Economics, an economic consulting firm located in La Jolla, California. He served as tenured Associate Professor of Finance and Business Economics at the University of Southern California (USC), and as Visiting Professor at both the Universidad Central del Este (Dominican Republic) and UCLA.
Dr. Canto has been published in The Wall Street Journal and Investor’s Business Daily, and in many leading economic journals, including Economic Inquiry, Journal of Macroeconomics, The International Journal, Journal of Business and Economic Statistics, The Southern Economic Journal, Applied Economics, Weltwirstchaftliches Archiv, The CATO Journal, Public Finance, and The Journal of International Money and Finance. His series on portfolio strategy appeared in the Financial Analysts Journal.
He holds a M.A. and Ph.D. in Economics from the University of Chicago (1974, 1977).
What can moonshine, mountain climbers, power plants, salmon, football players, and well-known celebrities teach you about investing? More than you ever imagined!
Through entertaining, easy-to-understand anecdotes, analogies, and examples, Canto reveals why the most successful investment strategies reflect a balance of active and passive approaches. You’ll learn how to “read” economic cycles, identifying the specific asset classes most likely to outperform in tomorrow’s business environment.
Construct and optimize your winning investment plan, step-by-step, from start to finish!
MAKE HAY WHILE THE SUN SHINES
The case for predicting, forecasting, and timing
PASSIVE INVESTING? ACTIVE INVESTING? NO. BOTH.
Why you need to take both sides in the never-ending debate
ELASTICITY: CATCH IT IF YOU CAN
Putting industry behavior to work for you
CALIFORNIA, FRANCE, AND THE “LOCATION EFFECT”
Investing internationally in the age of globalization
TURN “SMOKE” INTO “SIGNALS”
Making the most of publicly available price data
YOUR PORTFOLIO VS. THE GOVERNMENT
Anticipating and responding to regulations and taxation
TILT TOWARD SUCCESS, ONE STEP AT A TIME
Build your benchmark portfolio, then optimize it for changing environments
Victor Canto reveals exactly how the economy affects markets and how to “read” business cycles so you can profit from every shift in the business cycle. Among the topics covered: investing internationally in the age of globalization; transforming price data into usable market “signals”; anticipating the impact of regulations and taxation; and more. From start to finish, Canto’s focus is practical, and his focus is simple: outstanding investment results.
20 of 20 people found the following review helpful
Economics and Investments,
This review is from: Cocktail Economics: Discovering Investment Truths from Everyday Conversations (Hardcover)It seems that many recent books on economics, while no doubt entertaining, pertain less and less to our everyday lives. Sure, it is fascinating learning that sumo wrestlers cheat in Steve Levitt's Freakonomics, but how can I apply this newfound economic knowledge for my personal benefit?
It is here that Victor Canto's Cocktail Economics scores big where many contemporary economic books miss the mark. The book applies sound economic principals to where many of us need the most help: our investment portfolios.
Not only are we sold on the importance of investing, but we are taught how to use economics to improve our investment performance at the margin. Topics like inflation, taxes, globalization, regulation, technological advances, and more are presented clearly and shown how they can affect our investment decisions like stocks vs bonds, large-cap vs small-cap, value vs growth, and investment choices among various industries.
As an example, in Ch. 4... Read more
3 of 3 people found the following review helpful
"A rose by any other name...",
This review is from: Cocktail Economics: Discovering Investment Truths from Everyday Conversations (Hardcover)I am a bit perplexed by the positive reviews for this book.
First of all, the title is a misnomer---the subtitle is "Discovering Investment Truths from Everyday Conversations". The only "conversation" is the one the author has trying to convince you that by using his "if-then" models of beta and elasticity you can predict the effects of various exogenous events ("policy shocks" is his preferred term) on stock prices. By adjusting your allocations accordingly, you can beat market returns. When you cut to the chase, he is advocating a form of market timing. There are many superb academic studies that have shown the fallacy of this approach.
To give just one example, on pages 226-230, he inveighs against the Carhart/Sinquefield study for comparing cap weighted index funds to a portfolio of equal-weighted managed funds. He then goes on to state mathematically self-evident conclusions such as "if we apply a cap weight to the performance of these funds, we will identify a 50/50... Read more
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This review is from: Cocktail Economics: Discovering Investment Truths from Everyday Conversations (Hardcover)I majored in Econ many years ago. It was fun catching up.
It would also be a good place to start for the many who have no understanding of basic economics.
› See all 5 customer reviews...
Online Sample Chapter
Table of Contents
Introduction: The Above-Average Opportunity xxi
Chapter 1: The Buy-and-Hold Connection: Investing Fundamentals, Courtesy of the American Homeowner, the American Dream–or Reality? 1
Chapter 2: Leaping the Transaction-Cost Hurdle: Sometimes It’s Easy, Other Times It’s Not 19
Chapter 3: Dressing Appropriately for the Stock Market: The Potential Payoffs of a Switching Strategy 31
Chapter 4: Catch Elasticity If You Can: An Introduction to Industry Behavior 47
Chapter 5: Putting High-Beta to Work: Industry-Based Portfolio Strategies 67
Chapter 6: California Is a Country: An Introduction to the Location Effect 83
Chapter 7: …And France Is a State: How to Invest Internationally in the Age of Globalization 99
Chapter 8: Pipelines to Our Investment Returns: How We Get What We Want, in the Amount We Want, and When We Want It 113
Chapter 9: Who Are You? Investor Profiles and the Case for Asset Allocation 131
Chapter 10: Your Benchmark Portfolio. . .and Beyond 145
Chapter 11: Turning Smoke into Signals: How to Make the Most Out of Price Data 157
Chapter 12: Making Hay While the Sun Shines: The Case for Predicting, Forecasting, and Timing 173
Chapter 13: The Fight Is On: How to Invest Properly Relative to Regulations, Inflation, and Taxation 195
Chapter 14: Ending the Never-Ending Debate: Active vs. Passive Investing and Why You Can Take Both Sides 217
Chapter 15: A Rational Walk Down Wall Street: Darting Between Passive and Active When the Odds Are in Your Favor 233
Chapter 16: Alpha Bets: The Case for Hedge Funds and a Greek Letter You’ll Want in Your Portfolio 247
Chapter 17: Tilting Toward Success: A Step-by-Step Guide to Above-Average Asset Allocation 265
Downloadable Sample Chapter
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