I’ve recently been reading a book titled Reading Minds and Markets: Minimizing Risk and Maximizing Returns in a Volatile Global Marketplace by Jack Ablin. Ablin is a long-time money manager with experience in both the fixed income and equity markets. While at first glance I think a lot of folks would probably say this book isn’t really something traders would be interested in, I think there are some nuggets to be had for those with a fundamental approach to the market and those who like to have a big picture view of things.
I don’t know how well the title actually sets up the book. Clearly it was crafted to hit the hot button concepts. The book is primarily about asset allocation – picking the best place(s) to put money to work.Â Ablin provides what he considers the five ways one can look a the markets (speaking mainly of stocks and bonds here, but thinking on a global scale) to evaluate areas of potential opportunity. For each of those ways he provides some ideas for metrics which can be used to provide the necessary relative analysis.
The discussion of different potential metrics I found quite useful. It stimulated some ideas for me in the things that I do, and I’m sure it would do the same for other readers as well. These are, of course, more macro measures looking at broader themes, but that’s the basic point. Ablin pounds the table quite frequentlyÂ about the value of looking at things top-down.
High level portfolio allocation type books can sometimes be very dry and boring. This one is actually quite approachable. The author includes quite a few personal anecdotes from his experience managing funds, showing both his triumphs and the short-falls which motivated him to improve is knowledge and methods. My one gripe was that the book was written to a bit too low a level of reader. Obviously, that makes it accessible to a wider audience, but I personally found some of the written annoyingly basic.
That drawback aside, for those who are interested in top level asset allocation type decisions, or who want a set a tools they can use for macro level analysis, I think this is a book which can offer up a lot of useful tips and ideas.
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About the Author
John Forman, author of this blog, has traded for more than 20 years, is a professional market analyst, and authored The Essentials of Trading. He is an active participant in trading forums, consults for trading related businesses, as published literally dozens of trading articles, and has been quoted in a number of books and in the media.
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