why is this book so expensive? looks like one of those 40 dollars books.
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why is this book so expensive? looks like one of those 40 dollars books. -
paul samuelson reviewed this book...damn he got recognitionComment -
this book used to cost about 8 dollars in 1967. now it is over 400??? this is not just inflationComment -
It's by Ed Thorp, the first person to publish a legitimate card-counting system for Blackjack. This is probably collectible.Comment -
Here is a list of the most sought-after out of print books for the year of 2007:
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well, the book's content is just for funs and giggles now. it is a collectable indeed.
45 of 48 people found the following review helpful:
Great strategy 40 years ago when there was no Black-Scholes, December 18, 2001
By A Customer
The basic premise of this book is to long stock and delta hedge w/ out of the money warrants. This was great when the tax incentives encouraged corporations to sell bonds w/ detachable warrants rather than selling convertible bonds. In addition, valuing the warrants was tricky prior to the use of the Black-Scholes model. This strategy - delta neutral covered calls - is profitable when the market has peaked out but you can get your handed to you if you employ it in a scenario such as '99-'00. Further their reocmmendations that you short more as your warrants fall is very dangerous - shorting a lot of gamma. The warrant game played itself out and the authors made a a lot of money. This is a very interesting book written by a very profitable hedge fund manager, but I would not recommend attempting to replicate this strategy w/ LEAPS. Pricing is much tighter now so your margin of error has dramatically decreased Help other customers find the most helpful reviews
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1 of 1 people found the following review helpful:
Dated, but a good filter rule, August 27, 2007
By Bachelier "Husband, Father, Catholic, Finance... (Ile de France) - See all my reviews
The strategies in this wonderful book are only employable in Asia now, and in very limited ways (often insurance and bank stocks and bonds) but you take a lot of liquidity risk, so I'm not sure if you are still paid alpha over an expected return.
Still, a marvellous read. Pre-dates the Black-Scholes by five years, but in a replicating portfolio no-arbitrage method (which implies a lognormally distributed expected equity return) which Thorp then correctly pointed out was arbitrageable.
This book also serves as a curious filter rule. Those who read this and understand the old world and Thorp's method most likely can see current methods and models and break them down and differentiate them into tractable and fantasy. Credit structures who've relied on standard cash-flow and default probability metrics would have done well to start with Thorp to see how what they construct can be de-constructed by clever boots who see both the strengths of the original construct, and the copula methods and correlation assumptions in the structure (and its decay) to make arbitrage opportunities. In other words; if they read Thorp and "get it" they have a lower likelihood of being hoodwinked going forward. Help other customers find the most helpful reviews
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16 of 19 people found the following review helpful:
Interesting and workable strategy for thinly traded warrants, April 24, 2003
By A Customer
Agree with much of the prior review. That said, if you can find thinly traded warrants (i.e., where there is less pricing efficiency due to the low trading volume), this book presents a very workable strategy for the individual investor. In addition, the book does outline an approach for hedging the "warrant component" of convertible bonds. In my opinion, the key is to stay in the low-volume (and, therefore, more market in-efficient) securities, so that an individual investor can use one's small size as an advantage by trading where the larger funds cannot. Help other customers find the most helpful reviews
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5 of 6 people found the following review helpful:
The veritable secrets of the universe are revealed, March 23, 2007
By J. Rensink "www.infiniteyield.com" (Minneapolis, MN USA) - See all my reviews
E. O. Thorp has made a tremendous career from finding opportunities and properly exploiting them as advertised in this ground breaking book. There is no one in the financial world who has had a better risk-adjusted return than Thorp for the last 30 years.
Virtually unknown is the fact that years before, Thorp invented/discovered the formula that is attributed to Black-Scholes, with the exception of the risk-free interest rate factor, because of existing market structure that prevented interest from being a factor.
And Thorp's treatment of the Kelly Criterion makes this a standout work.
Since many have never read this book yet or tried to apply the principles that Thorp revealed in this book, it would be easy to dismiss this as some worn-out idea that has come and gone. Far from it. There is a reason that the few copies that were printed are still in demand.
The old saying is that those who can, do - while those who can't, teach. Thorp proved that he was the former.
If the principles from the book are understood the execution in different markets becomes apparent. In the last 20 years, I have applied the method in different forms in stocks, futures markets and LEAPS, with returns that exceeded the benchmarks stated in the book, with the same relative safety factors.
As long as there are people making investment decisions; who change their views as to whether a tradeable is cheap or dear, the opportunity for this method will remain infinite.Comment -
thanks for the listOriginally posted by Data
this book cost 950 on ebay...damn.Comment -
amazon has it for 500...but still. i just want a pdf copy of those books
collecting physical books doesn't seem to make sense to meComment