The Aleph Blog » Blog Archive » Book Review: Visual Guide to Financial Markets

Book Review: Visual Guide to Financial Markets

This is a good book and I recommend it to certain people.  Thus when you see the number of stars I give it at Amazon, know that for those whom the book is good, it is really good.  But there are some who will get less out of the book.

The author, David Wilson, is an excellent explainer of markets to those who are just learning.  He frequently does “The Chart of the Day” at Bloomberg, giving considerable insight to neophytes and professionals as he boils down complex topics into one graph.

As I began to read the book, I noted to myself, “Oh, in a number of places, they are using Bloomberg Terminal formats without mentioning it.  At the end of the book, they give a list of Bloomberg Terminal codes that would be useful to those who subscribe to the ~$2,000/month service. (Yeh, it costs that much, and it is worth it if you can afford/use it.)

I say this partly because I was a rare Bloomberg user that had expertise with all of the “yellow keys” of Bloomberg.  I’m intellectually curious, so when I first used a Bloomberg terminal back in late 1992, I played around with it to see what it could deliver.  It could deliver a lot, and it has expanded exponentially since then.  It is one amazing system.

But what if you could cobble together the most important 50% of what you get on a Bloomberg terminal, ad pay nothing?  That’s me.  It takes extra work, but you can do it.  I miss my Bloomberg terminal, because I can’t afford it now, but for those that can afford it, it is a wealth of information.

Thus, back to the book.  The book reads like one who imbibes both Bloomberg’s editorial ideals: “keep it simple. explain, give them the facts,” and teaching beginner users of a Bloomberg terminal on how to think about the markets.  Note that the terminal never gets mentioned until an appendix at the end.  But those that use a Bloomberg terminal to a high degree understand how the market is segmented.  We don’t ask the same questions with municipal bonds as we do with stocks.

This book is a very good book for beginners in the markets.  It explains a lot of things well, with reasonable detail.  It is not a good book for experts — you know all this, but if you want to get an introduction to some tangential areas you might not know, this could still help you.  This book brings you up to an intelligent beginner level in a wide number of areas.

What areas does it cover:

  • Stocks
  • Bonds (of many sorts — corporate, government, municipal, mortgage, etc.)
  • Money markets
  • Indexes
  • Commodities
  • Derivatives (options, swaps, futures, forwards)
  • Mutual Funds (open-end and ETFs)

The book highlights at the edges of its pages the main ideas, processes for using the information described, and definitions of financial terms.

Quibbles

When the book gives definitions, it is white on a vivid green background, and is hard to read.  The text should have been black against the vivid green.

The book implicitly assumes that people get quotes from a Bloomberg terminal.  Aside from professionals, few people do.  Until Bloomberg markets a retail service for individuals, offering the basics for 5% of the cost, there is little utility from explaining the nuances of a Bloomberg quote.

The title is slightly misleading, because the the book is no more “visual” than most.  There are a decent amount of graphs, but for a book that calls itself visual, I would have expected more.

Who would benefit from this book:   This book is best for those that have access to a Bloomberg terminal, but are not expert in using it. Second best, it could help those without a Bloomberg terminal, but want to learn the basics of investing.  Dave is a good teacher.  Finally, for those with experience, this book is redundant.  If you want to, you can buy it here: Visual Guide to Financial Markets (Bloomberg Financial).

Full disclosure: The publisher asked if I wanted the book.  I said “yes” 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.






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One Response to Book Review: Visual Guide to Financial Markets

  1. mdranchak says:

    “But what if you could cobble together the most important 50% of what you get on a Bloomberg terminal, and pay nothing?”

    … As someone who has never used Bloomberg, I’d love to learn more about this.

Disclaimer


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.


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