{"product_id":"the-liquidity-theory-of-asset-prices-isbn-9780470027394","title":"The Liquidity Theory of Asset Prices","description":"Professional investors are bombarded on a day to day basis with assertions about the role liquidity is playing and will play in determining prices in the financial markets. Few, if any, of the providers or recipients of such advice can truly claim to understand the well–springs of such liquidity and the transmission mechanisms through which it impacts asset prices.  \u003cp\u003eThis groundbreaking new book explores the belief that at the core of liquidity there is a force which exerts individuals to effect a financial transaction when they would not otherwise do so.  Understanding this force of compulsion is a key to understanding a financial market when it appears to be behaving irrationally. This book will enable new and seasoned investors to develop an understanding of the factors, so that costly mistakes can be avoided without the lesson of experience.\u003c\/p\u003e \u003cp\u003eForeword by \u003ci\u003eRussell Napier\u003c\/i\u003e xiii\u003c\/p\u003e \u003cp\u003eAcknowledgements xvii\u003c\/p\u003e \u003cp\u003eAbout the Authors xix\u003c\/p\u003e \u003cp\u003eList of Tables, Figures and Charts xxiii\u003c\/p\u003e \u003cp\u003e\u003cb\u003eIntroduction 1\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eAppetiser 1\u003c\/p\u003e \u003cp\u003eStructure of the book 2\u003c\/p\u003e \u003cp\u003eLanguage and jargon 2\u003c\/p\u003e \u003cp\u003eAcademic theories 3\u003c\/p\u003e \u003cp\u003eModern Portfolio Theory 3\u003c\/p\u003e \u003cp\u003eThe Efficient Markets Hypothesis 4\u003c\/p\u003e \u003cp\u003eForms of investment analysis 4\u003c\/p\u003e \u003cp\u003eFundamental analysis 4\u003c\/p\u003e \u003cp\u003eMonetary analysis 5\u003c\/p\u003e \u003cp\u003eTechnical analysis 5\u003c\/p\u003e \u003cp\u003eThe intuitive approach 6\u003c\/p\u003e \u003cp\u003eWhat the book is going to say 6\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePART I THE LIQUIDITY THEORY 9\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e1 Types of Trades in Securities 11\u003c\/p\u003e \u003cp\u003e2 Persistent Liquidity Trades 15\u003c\/p\u003e \u003cp\u003e3 Extrapolative Expectations 21\u003c\/p\u003e \u003cp\u003e4 Discounting Liquidity Transactions 25\u003c\/p\u003e \u003cp\u003e5 Cyclical Changes Associated with Business Cycles 37\u003c\/p\u003e \u003cp\u003e6 Shifts in the Savings Demand for Money 43\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePART II FINANCIAL BUBBLES AND DEBT DEFLATION 49\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e7 Financial Bubbles 51\u003c\/p\u003e \u003cp\u003e8 Debt Deflation 55\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePART III ELABORATION 59\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e9 Creation of Printing-press Money 61\u003c\/p\u003e \u003cp\u003e10 Control of Fountain-pen Money and the Counterparts of Broad Money 65\u003c\/p\u003e \u003cp\u003e11 Modern Portfolio Theory and the Nature of Risk 71\u003c\/p\u003e \u003cp\u003e12 Technical Analysis and Crowds 81\u003c\/p\u003e \u003cp\u003e13 The Intuitive Approach to Asset Prices 87\u003c\/p\u003e \u003cp\u003e14 Forms of Analysis 93\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePART IV EVIDENCE AND PRACTICAL EXAMPLES 101\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e15 The UK Markets Prior to 1972 103\u003c\/p\u003e \u003cp\u003e16 The US Equity Market 1960–2002 109\u003c\/p\u003e \u003cp\u003e17 Two Forecasts 113\u003c\/p\u003e \u003cp\u003e18 Debt Deflation, Practical Experience 119\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePART V MONITORING DATA 121\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e19 Monitoring Current Data for the Monetary Aggregates 123\u003c\/p\u003e \u003cp\u003e20 Monitoring Data for the Supply of Money 139\u003c\/p\u003e \u003cp\u003e21 The Different Sectors of the Economy 145\u003c\/p\u003e \u003cp\u003eGlossary 149\u003c\/p\u003e \u003cp\u003eReferences 157\u003c\/p\u003e \u003cp\u003eIndex 159\u003c\/p\u003e \u003cp\u003e\u003cb\u003eAbout the authors\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eGORDON PEPPER\u003c\/b\u003e has the unusual combination of an economics degree from Cambridge and actuarial training. Immediately after he finished taking examinations, he became a dealer on the Floor of the London Stock Exchange. His ‘postgraduate university’ was the market place, where he underwent the harshest of disciplines. Forecasts based on conventional theories were often wrong. The inescapable conclusion was that these theories were either incorrect or incomplete. \u003c\/p\u003e\u003cp\u003ePepper was the joint founder of W. Greenwell \u0026amp; Co’s gilt-edged business (that is, the UK government bond business), which arguably became one of the leading bond-advisory businesses in the world, the advice being about both the best investments and the optimum way to execute business. For more than ten years he was the premier analyst in the gilt-edged market and was often described as the guru of that market. He was the principal author of Greenwell’s \u003ci\u003eMonetary Bulletin\u003c\/i\u003e, which, in the 1970s, became one of the most widely read monetary publications produced in the United Kingdom \u003c\/p\u003e\u003cp\u003ePepper is the author of three books and the co-author of a fourth: \u003ci\u003eMoney, Credit and Inflation\u003c\/i\u003e (1990), \u003ci\u003eMoney, Credit and Asset Prices\u003c\/i\u003e (1994), \u003ci\u003eInside Thatcher’s Monetarist Revolution\u003c\/i\u003e (1998), and (with Michael Oliver) \u003ci\u003eMonetarism under Thatcher – Lessons for the Future\u003c\/i\u003e (2001). He is also chairman of Lombard Street Research Ltd, which is one of the UK’s leading independent firms carrying out investment research and specialising in analysis of money, credit and flows of funds. Summarising, Pepper’s particular strength is the combination of practitioner and academic. Above all, he writes with great authority from his knowledge of what actually happens in the marketplace. \u003c\/p\u003e\u003cp\u003e\u003cb\u003eMICHAEL J. OLIVER\u003c\/b\u003e is currently Professor of Economics at École Supérieure de Commerce de Rennes and a director of Lombard Street Associates, UK. \u003c\/p\u003e\u003cp\u003eHe graduated in economic history at the University of Leicester and was awarded his PhD in economics and economic history from Manchester Metropolitan University. He has held posts at the universities of the West of England, Leeds, Sunderland and has been a Visiting Professor at Gettysburg College, Pennsylvania and Colby College, Maine. \u003c\/p\u003e\u003cp\u003eHe is the author of several books, including \u003ci\u003eWhatever Happened To Monetarism? Economic Policy-making and Social Learning in the United Kingdom Since 1979\u003c\/i\u003e (1997); \u003ci\u003eExchange Rate Regimes in the Twentieth Century\u003c\/i\u003e (with Derek Aldcroft, 1998) and \u003ci\u003eMonetarism under Thatcher – Lessons for the Future\u003c\/i\u003e (with Gordon Pepper, 2001). He has just finished co-editing a book (with Derek Aldcroft) entitled \u003ci\u003eEconomic Disaster of the Twentieth Century\u003c\/i\u003e, which is being published by Edward Elgar in 2006. He has contributed articles to \u003ci\u003eEconomic History Review\u003c\/i\u003e, \u003ci\u003eTwentieth Century British History\u003c\/i\u003e, \u003ci\u003eEconomic Affairs\u003c\/i\u003e, \u003ci\u003eContemporary British History\u003c\/i\u003e, \u003ci\u003eEconomic Review\u003c\/i\u003e and \u003ci\u003eEssays in Economic and Business History\u003c\/i\u003e.  \u003c\/p\u003e\u003cp\u003e“\u003ci\u003eCentral bankers worry about asset markets. Do they convey information about the future course of the economy? How does monetary policy affect these markets – if it does? Should monetary policy attempt to prevent or prick bubbles? These are important matters, sometimes neglected by academic economists. This book, written jointly by a practitioner with a good knowledge of economics and an economic historian with a good knowledge of markets, is most useful and important contribution to the study of the interaction of monetary policy and asset markets. It is a most welcome book.\u003c\/i\u003e”\u003cbr\u003e \u003cb\u003e—Geoffrey E. Wood,\u003c\/b\u003e Professor of Economics, Cass Business School,\u003c\/p\u003e \u003cp\u003e“\u003ci\u003eEven a beginner could understand this and this is excellent from a treasurer or a CFO’s viewpoint since many of them would gain a better understanding of why their company’s share price is flagging or performing in the way that it is. As an educational tool it is very impressive. I can see the great potential for this in the marketplace. I wish that I had been armed with this when I first went into the City!\u003c\/i\u003e”\u003cbr\u003e \u003cb\u003e—Michael Shelton – Agar,\u003c\/b\u003e Director, Lombard Street Associates \u003c\/p\u003e\u003cp\u003e“\u003ci\u003eGordon Pepper makes a clear, well argued case for the Liquidity Theory of Asset Prices. He provides an interesting and revealing perspective on periods of seemingly irrational behaviour in markets. The most important piece of advice I took away with me was ‘don’t listen to what central bankers say, watch what they do’. I would recommend any experienced fund manager to read this and have their preconceived ideas, about market fundamentals, challenged.\u003c\/i\u003e”\u003cbr\u003e —\u003cb\u003eAnja Balfour,\u003c\/b\u003e Fund Manager, Framlington \u003c\/p\u003e\u003cp\u003e“\u003ci\u003eI think this book will prove extremely helpful to young professionals setting out on a career in asset management and seeking to educate themselves about the investment world. The book is clearly the outcome of a lifetime of hard intellectual work combined with practical experience of markets. I think it will be most useful to aspiring investment managers and I only wish it had been available for me 30 years ago.\u003c\/i\u003e”\u003cbr\u003e —\u003cb\u003eRichard Burns,\u003c\/b\u003e Senior Partner, Baillie Gifford\u003c\/p\u003e","brand":"Wiley","offers":[{"title":"Default Title","offer_id":47990279209189,"sku":"NP9780470027394","price":98.0,"currency_code":"USD","in_stock":false}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/1842\/7735\/files\/9780470027394.jpg?v=1761787176","url":"https:\/\/k12savings.com\/products\/the-liquidity-theory-of-asset-prices-isbn-9780470027394","provider":"K12savings","version":"1.0","type":"link"}