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Book Review: Abnormal Returns

Abnormal Returns

I consider Tadas Viskanta to be a friend of mine.  I write my eclectic blog, and Tadas occasionally features me on his daily curation of the economics/finance/investment blogosphere.

But it is not friendship that leads me to write the following: this is a really good book.  Why?  Every day, Tadas curates the best thoughts in finance.  He finds them, he motivates them, and links to them.  If I had just one site to visit everyday, it would be his, not mine.  He’s really good at finding the best content in finance.

But it goes a step further than that.  Tadas is a very good blogger in his own right.  It’s not that he comes up with new insights, but he is very good at taking the insights of others and weaves them into a greater insight than the separate thoughts of the individuals.  He finds themes, and he finds disagreements.  Each provides good food for thought.

Now, if Tadas can do this on a daily basis, let’s call him the Chief Synthesizer of the economics/finance/investment blogosphere — then, what happens if he decides to take several steps back, and synthesize the grand themes he has seen in six years of writing his blog.

It’s been a violent period, after all.  Tadas has been blogging from the peak of residential real estate (October 2005), through the tail of the boom (October 2007), to the bust (March 2009), to the present.  He keeps it relevant, and he doesn’t take sides, which allows him to source the best content better.

So as he synthesizes the themes of the last six or seven years, he comes down to really basic ideas for each chapter: Risk, Return, Stocks, Bonds, Portfolio Management, Does Active Investing Work, ETFs, Global Investing, Alternative Assets, Behavioral Finance, Using Media, and the Lost Decade.  He handles them deftly, highlighting differences, but giving a consensus opinion.

The book is modest, in that it does not promise you greater profits if you follow his advice.  It is a realistic book, because most of us know that the basic principles of investing are straightforward, but they get clouded by academics and hucksters.  After you read this book, you may or may not earn more, but you will probably be safer.

Also, the book is an easy read; I glided through it in less than three hours.


The editor could have done more work to make the index complete; I was surprised to find myself mentioned in the book more times than the index noted.

Who would benefit from this book: Most amateur investors would benefit from the book, and many, though not all professionals would benefit from the book’s basic approach. Think of it this way — what if you could explain basic concepts to the uninstructed more clearly? Wouldn’t it help you in your business?  If you want to, you can buy the book here: Abnormal Returns: Winning Strategies from the Frontlines of the Investment Blogosphere.

Full disclosure: I asked the publisher for the book and he sent it to me.

If you enter Amazon through my site, and you buy anything, I get a small commission.  This is my main source of blog revenue.  I prefer this to a “tip jar” because I want you to get something you want, rather than merely giving me a tip.  Book reviews take time, particularly with the reading, which most book reviewers don’t do in full, and I typically do. (When I don’t, I mention that I scanned the book.  Also, I never use the data that the PR flacks send out.)

Most people buying at Amazon do not enter via a referring website.  Thus Amazon builds an extra 1-3% into the prices to all buyers to compensate for the commissions given to the minority that come through referring sites.  Whether you buy at Amazon directly or enter via my site, your prices don’t change.

Academic Finance, Asset Allocation, Bonds, Book reviews, Macroeconomics, Personal Finance, Portfolio Management, Speculation, Stocks, Value Investing | RSS 2.0 |

5 Responses to Book Review: Abnormal Returns

  1. [...] David Merkel reviews the Abnormal Returns book.  (AlephBlog) [...]

  2. [...] David Merkel reviewed Abnormal Returns: Winning Strategies From the Frontlines of the Investment Blogosphere.  (Aleph Blog) [...]

  3. [...] David Merkel reviewed Abnormal Returns: Winning Strategies From the Frontlines of the Investment Blogosphere.  (Aleph Blog) [...]

  4. [...] David Merkel: The book is modest, in that it does not promise you greater profits if you follow his advice.  It [...]

  5. [...] David Merkel has a nice review up of Abnormal Returns: Winning Strategies From the Frontlines of the Investment Blogosphere.  (Aleph Blog) [...]


David Merkel is an investment professional, and like every investment professional, he makes mistakes. David encourages you to do your own independent "due diligence" on any idea that he talks about, because he could be wrong. Nothing written here, at RealMoney, Wall Street All-Stars, or anywhere else David may write is an invitation to buy or sell any particular security; at most, David is handing out educated guesses as to what the markets may do. David is fond of saying, "The markets always find a new way to make a fool out of you," and so he encourages caution in investing. Risk control wins the game in the long run, not bold moves. Even the best strategies of the past fail, sometimes spectacularly, when you least expect it. David is not immune to that, so please understand that any past success of his will be probably be followed by failures.

Also, though David runs Aleph Investments, LLC, this blog is not a part of that business. This blog exists to educate investors, and give something back. It is not intended as advertisement for Aleph Investments; David is not soliciting business through it. When David, or a client of David's has an interest in a security mentioned, full disclosure will be given, as has been past practice for all that David does on the web. Disclosure is the breakfast of champions.

Additionally, David may occasionally write about accounting, actuarial, insurance, and tax topics, but nothing written here, at RealMoney, or anywhere else is meant to be formal "advice" in those areas. Consult a reputable professional in those areas to get personal, tailored advice that meets the specialized needs that David can have no knowledge of.

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