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The Strategic Bond Investor

Strategies and Tools to Unlock the Power of the Bond Market
Feb 22, 2020dixithanoop rated this title 4 out of 5 stars
I picked this book as a follow-up to my previous two books - Why Wall Street Matters and The Big Short - as part of my deep-dive into understanding the happenings at Wall Street, its quirks, the smarts, and their blatant "complexification" of simple concepts. This time though, I wanted to focus on the Bond Market, the biggest market there is (way bigger than the other, well-known stock market), and this book by Anthony Crescenzi really excelled at being my Bond Market 101 textbook. The book is well structured, explains the concepts it intends to in an adequately entertaining manner, and at parts reads like a typical textbook. The most curious aspect of the book is that this was written in 2002, and because it pre-dates The Great Recession of 2008, it focuses predominantly on events like the dot-com bubble of 2000s, the Fed's interest-rate fluctuations of 2001s etc. It also holds Alan Greenspan with very high regards (in fact, there's an entire chapter called "Don't Fight the Fed" dedicated to highlight the power and influence of the Fed where it justifies most actions of the same). After completing this book, I've a lot deeper and better understanding of the often heard-of concepts - like the Treasury Bonds and Notes, the mortgage backed securities, corporate bonds, the municipal bonds, credit ratings and their curious history, CDOs etc - as well as some of the concepts not so popular outside of Wall Street - like Fibonacci Trading, impact of the Yield Curve ratio, the economics of short term vs long term yields etc. Parts of the book that throw light on things like the impact of interest-rate control on the US elections, the link between Boston Tea Party and the Seven Years War, gauging market sentiment in a variety of ways (that includes the quintessential reference to the Tulip mania) etc are also very illuminative. I did diversify my financial portfolio with bonds (with a fair understanding of it :)) post reading the book, so at the least, the book had some personal practical value! At times, the books goes way too deep in concepts for a regular but curious reader to bear, but then, one can discount that given there are summary sections at the end of each chapter if you did choose to ignore any sections of the chapter. I'd recommend this book to anyone interested in appreciating the potential of the bond market. Until I read the book, I had no idea the Treasury bond market was that huge, or that Yield Curve and recession probabilities are so closely linked!