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June 30, 2004

Books for the Beach: Summertime... and the Reading Is Easy

By Gregory Bresiger

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  • Books for the Beach: Summertime... and the Reading Is Easy

Here is a time for the economically astute trader to catch up on some of the

titles that he or she often usually has had to pass up. As the financial professional heads out to the beach or a summer cottage, here is a list of current books that will make a lazy, hazy summer afternoon even more pleasant.

Goldman Sachs

The Culture of Success

By Lisa Endlich (Touchstone, 326 pages, $14.)

This is not a new book, but a paperback edition of this book came out recently. Here is a compelling analysis and history of the house that has been a part of Wall Street for countless years. For those who want to know how Goldman came to run their world, here is an explanation that will keep the curious reader turning the page.

Trading & Exchanges

Market Microstructure for Practitioners

By Larry Harris (Oxford University Press, 641 pages, $95.)

This is to traders what the bible is for Christians and Jews. And, although it is also not a recent work, it is a book that should be on every financial professional's list. Here is a tome of great insight by an economist and a key official with the Securities and Exchange Commission. Although the book has much technical merit, there is also a philosophy that every trader should contemplate. "Trading is a zero-sum game in which some traders win and others lose," Harris writes. "Traders who do not expect to win should refrain from trading." (Page 4).

Behavioral Trading

Methods for Measuring Investor Confidence, Expectations,

and Market Trends

By Woody Dorsey (Thomson Texere, 247 pages, $69.95.)

This excellent book was recently reviewed in Traders Magazine. It is well worth your time. There's more to trading and markets than spreads. Dorsey is one of the pioneers in the growing area of behavioral finance. He argues that one must do more than use the usual indices to properly measure the health of a market. Dorsey contends that the confidence part of markets is an often-overlooked element. Dorsey calls in former Treasury Secretary Robert Rubin to make the case.

"But everything I have experienced suggests that, at core, economic conditions and markets are grounded in the human psyche," Rubin says. "That is, confidence, or the lack thereof, profoundly affects markets and economies, and confidence in turn, has throughout the history of markets and economies tended to swing from excesses in one direction to excesses in the other." (page 8).

So Dorsey proceeds to make a know thyself case for mastering the risks of markets. And he warns of ignoring the behavioral aspects of markets. He cautions professionals and investors that they can be their own worse enemies. For example, he says that one must be wary of one's own "emotional responses" and "automatic thoughts."

Tales From The

Boom-Boom Room

The Landmark Legal Battles That Explained Wall Street's Shocking Culture of Sexual Harassment

By Susan Antilla (Harper Business, 342 pages, $14.95.)