Book Review: The Great Deleveraging


“Capital preservation should be goal number one” is the final line in The Great Deleveraging by Chip Dickson and Oded Shenkar. That’s the conclusion provided to finish off about 300 pages worth of discussion, data, and analysis related to economic and stock market patterns of the last century or so. The authors take the reader through extensive historical study of how the US and global economies have changed and evolved and how stock markets have reacted to those changes in their bull and bear market cycles. They do so in a very easy to read fashion, however, with loads of charts and graphs to make their points. It is, in many ways, a quick read for all its length and content.

My one gripe about this book is that the subject matter noted in the title doesn’t really get all that much coverage in a direct fashion. The first chapter is titled “The Great Leveraging”, which makes sense since you have to lever up before you can delever. The chapter with the same name as the book’s title doesn’t come until the tenth (of twelve), though. In between there are chapters reviewing the history of real asset returns, global growth, and stock market patterns. Chapters on emerging markets and developments in the private sector are tossed in as well, some of the content of which only seems loosely related to the main discussion.

After all that, I’d like to have seen a more of a forward projection as to what The Great Deleveraging could look like, especially since the book seems to intended to give the reader something practical to apply. That stuff comes through in the final two chapters. The penultimate provides ways to gauge the economy and markets. The final chapter could be reasonably described as laying out a high level, fairly conservative plan for your financial future.

As much as I’m a bit disappointed that there isn’t as much meat to the deleveraging discussion as I’d have liked, I still give the book a solid overall score. There’s loads of very interesting information and suggestions of the sorts of things you can use to develop expectations for how the financial markets will perform given likely economic developments. Definitely something traders and investors whole like to take a fundamental view on things will find worthwhile.

Make sure to check out all my trading book reviews.


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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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