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I'm reading through the McKinsey "Valuation" (5th Edition) textbook (https://www.amazon.com/Valuation-Measuring-Managing-Value-Companies/dp/0470424656) and I've had some issues that I was hoping to get answered.

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1. In the second chapter, the authors discuss the so called value driver formula: Value =( NOPLAT_i * (1 - g/ROIC) )/WACC-g. Where g = constant growth rate, ROIC = rate of return on incremental capital invested, and NOPLAT_i is the operating profit after tax (before reinvestment) in period 1. However, then they go on to show this diagram: https://imgur.com/R7umPno. In this situation, WACC = 9%, and the initial NOPLAT is $100. They model it for 15 years and then use 3% perpetuity growth formula for the terminal value. I have 2 questions.
   
   1. I don't understand how they can say that the value of the company is $1100 when ROIC and growth are both 9%. The value driver formula would clearly give a value of 0 (I know it's only applicable in constant growth settings, but this is one of those) because g/ROIC would = 1 when g = ROIC, and thus the numerator goes --> 0. This would also however make sense because of the other formula they mention: Investment Rate = growth rate / ROIC. If growth rate = ROIC, then IR = 1 and you reinvest everything in order to get the growth you want.
      
   2. Secondly, I've tried to model these scenarios out on my own in Excel and I don't get anywhere close to the $1100 present value. Anyone want to take a crack at it to help a guy out?
      
      Either way, I feel like I'm missing something really obvious. Help is appreciated :)

The absolute best resources that I have found for integrating finance with Excel are the books by Simon Benninga. I really wish that they would have taught using his books in school (nearly all of the work I do is Excel based). They can be a little pricey, but I have found that they are more than worth the cost. If you are an absolute beginner and not completely comfortable with beginner financial concepts (or how to implement them in Excel), start out with his Principles of Finance with Excel. If you have a fairly solid grasp of basic financial concepts his book Financial Modeling is a probably the best resource that I have found for building a solid foundation in Excel. One caveat is that the Financial Modeling book is that it is written for pre-Office 2007, so you may have to make some minor adjustments to some of his formulas in newer version of Office.

For more advanced concepts, I have really found the Bionic Turtle channel on YouTube pretty usefull.

Good Luck!

For questions 1 and 2.

1. If you are packing the loans into a CDO, they are being sold on the open market. Once it achieves a AAA rating, as most did even though they were mostly subprime, alt a, or arm, it is sold and shipped off the originator's books (While the originator of the CDO collects X% in fees)
   
   Basically how the originator makes their money is by X amount of CDOs they sell. There was no incentive to pick and choose the best borrowers to sell a loan to because how the CDOs were sold they achieved the best rating regardless of the borrowers credit risk.
   
   Due to this model, people are going to try and get as many people into the homes and sell the CDO asap. This caused questionable lending practices to result, NINJA (no income, no job, no assets) loans, manipulating borrowers income, assets, etc.
   
   Things that could be changed to help not have this occur again:
   
   a) Feds monetary policy was pretty meh during this period, due to low interest rates the banks had pretty much an endless supply of money and when all the reasonable ventures dried up they had to explore other opportunities to lend.
   
   b) Ratings agencies need an overhaul in how they receive their commission, preferably they should be being paid by the investor not the person issuing the security. This will help to eliminate the bias that results.
   
   c) Having X% (2-5) remain on the institutions books who created the CDO will help to make them responsibly lend. This is because if they are required to have it remain on their books, they will make better longer term decisions in who to lend to.
   
   I'm pretty sure all of these issues are discussed in Nouriel Roubini's book Crisis Economics
   
   Another Great book already mentioned in this thread is by Michael Lewis The Big Short
   
   If your interested in the European Crisis Michael Lewis also just came out with Boomerang

I think that a great first step would be to look outside of r/finance. This subreddit is really not advanced at all.

Yorn just recommended you an arbitrary portfolio and some very, very specific (and illiquid) assets. There's a multitude of things wrong with what he said but the biggest ones are:

1. You have $40,000. There is no way to invest in that many assets, so you can't even execute the strategy that he recommended. Not to mention the transaction costs would be ridiculously high.
   
   
2. Commodities are highly mean reverting over the short and long term. There is no guarantee of an increase in price with inflation. Technological advances could cause the price of a commodity to be must cheaper in the future for example. They aren't buy and hold instruments.
   
   
3. The high risk section. Taking a total punt with 20% of your net worth is pretty stupid.
   
   He is right that you need to learn a lot to invest successfully. One of the first things you should learn is that you don't take unfounded investment advice.
   
   Now, for my advice (which you should research heavily):
   
   There are a few strategies that retail investors can implement if they would like to pursue active management of their portfolio.
   
   These are:
   
   Value - buying stocks that that are undervalued based on some fundamental factor (like earnings). Value is conducive to longer term holdings. This book, despite its dumb title, is a good primer.
   
   Low volatility - Buying stocks with a low standard deviation of price returns. www.betaarbitrage.com Also conducive to long term holdings.
   
   Momentum - Buying assets that have recently increased in price. Tougher to implement and requires more frequent trading, but can be done at the sector level (and across asset classes) through ETFs.
   
   Also, be wary of the advice that index investing as your best/only option. The S&P500 has returned basically 0% in the last decade with 2 50% drawdowns. Not the type of characteristics I'd like to see in my portfolio.
   
   Also, diversification means buying assets that are negatively correlated in bad times. Not just buying a lot of things.
   
   EDIT: Just read below that you don't know what a mutual fund is. I like this book for an introduction to financial markets.

> I'm not one for ad hominem arguments, just curious.

And I'm very thankful for that. I find when people ask the age of someone putting forward arguments they're usually just about to go the route of ad hominem attacks.

> You are correct that the monetary system is critical, although there are more reasons that the government goes into debt than just that of course.

Yes, it is essential. I have little doubt that the economic effectiveness of government would be held in a much lower regard by the masses if it didn't have this current monetary arrangement for then it would not be nearly so easy to defer the payment of its goods and services to future generations/citizenry taxes.

> Derpism is a word I guess I made up, it's just an ism of derp, so it means it a type of blah blah stupid.

Gotcha :) Sounds good.

> For example, greed is just self interest and is universal. It's also a very good thing to have in voluntary exchange.

Completely agree! In fact, it's due to man being greedy why I think it makes so much sense to arrange an economy such that voluntary exchanges can flourish and where productive talents are rewarded. It's also why I think it is an incredibly unintelligent and expensive arrangement to structure things such that coercive exchanges can flourish and political talents are rewarded.

> problems only arise under a flawed incentive structure, such as that produced by the ability to force other people to exchange with you, eg governments.

Agreed. That being said, it's fortunate that we do not need to get to zero government, we need only get to a government that is easily paid for. I think this becomes increasingly more difficult to the extent that you give government the tools to take wealth by force for means beyond financing the apparatus deemed necessary to defend individuals and their property from aggression.

> Also, your remarks on oil are leftist derpisms. I'm not sure I have the ambition to write it out right now though...

Fair enough, but I'm sure you can appreciate why I can't put much credit behind your assertion that my views on oil are effectively invalid or flawed. I'm currently in the midst of reading this book, The Prize: The Epic Quest for Oil, Money and Power, and it has been a fantastic read so far. It's hardly the first book I've read that links the oil sector to government and the financial sector but it does go through the history of the twentieth century and looks at it through the lens of oil. I believe most men today severly underestimate how much oil is used to provide the credit for our current debt-based global monetary system. I also think they severely underestimate just how much the cost of oil we see today is after an incredible amount of its production costs have been externalized by governments through the tax payers. In many ways I see our modern-day governments and politicians receiving a lot of credit for what rightfully belongs to the magic that is oil and we effectively thank them for something that we need not have surrendered to them in the first place.

Reminiscenses of a Stock Operator is a pretty good and easy read to start with. 2,3 & 4 are good. Michael Lewis' Big Short and Liar's Poker are pretty entertaining and definitely worth picking up.

Read this book:

http://www.amazon.com/Bogleheads-Guide-Investing-Taylor-Larimore/dp/0471730335

STAY OUT OF DEBT.
Do not fall into the stupid consumerist mind set by buying lots of shit you don't need on credit just to impress other people. LIVE BELOW YOUR MEANS. This is hard given all the bullshit in the media but it can be done. Think for yourself and become a saver not a debtor.


DON'T GO INTO DEBT FOR AN EXPENSIVE CAR.
Get a good used car and hold onto it. Car payments are sucky and will devour your money, and so will high insurance costs.


BEWARE STUDENT LOANS, THEY ARE EVIL AND CANNOT BE DISCHARGED IN BANKRUPTCY COURT. DO NOT GO INTO DEBT FOR FOR A SHITTY BASKET WEAVING DEGREE THAT WON'T GET YOU A JOB.
Also, beware of college altogether unless you are sure it can help you get ahead financially. Many people have stupidly gone into debt for useless degrees, don't be one of them. The government, banks and the colleges want you in debt for an education at all costs. It's good for their bottom line but it may not be for yours. Find a trade instead that will give you a dependable income and continued employment. If you want additional education then make sure you can pay for it without taking out loans. Beware of the "invest in yourself" bullshit that gets young people into HUGE amounts of student loan debt. Think carefully BEFORE you decide to go to college.

EMERGENCY FUND
Build an emergency fund of 1 - 2 years worth of expenses.

MUTUAL FUND INVESTING
Begin dollar cost averaging into low cost mutual funds (I prefer Vanguard's funds). Set up a Roth and/or SEP IRA as soon as you can. If you have a 401K only contribute up to the match your company gives you then max out the Roth since Roth IRAs aren't taxed at withdrawal.

Vanguard Personal Investing Site:
https://personal.vanguard.com/us/home?fromPage=portal

A simple portfolio should work well for you:

Vanguard Total Bond

Vanguard Total Stock

Vanguard Total International Stock

Keep your age in bonds (as you age you increase bonds and decrease stocks to lower risk) and the rest in stocks. Have 20 - 30 percent maximum in the foreign stocks fund.

Two other good funds that are balanced funds with a different investing approach are:

Vanguard Wellington

Vanguard Wellesely

INVESTING PORTFOLIO STATEMENT
Sit down and write an Investing Portfolio Statement that clearly outlines what you are invested in, what your goals are and why you are investing. Refer back to it when the market crashes and follow the instructions in the next paragraph when everybody is telling you to cash out of the market.

DON'T TRY TO TIME THE MARKET
Remember that time is on your side. DO NOT LISTEN TO EXPERTS WHO TELL YOU TO TAKE YOUR MONEY OUT OF THE MARKET. EVER. Bear markets are perfect for young people to get shares cheap. As the market crashes, you should be buying and cheering.

DO NOT PAY ATTENTION TO THE FINANCIAL PORN IN THE MEDIA.
Ignore the "experts" in the media who tell you to do this or that. Nobody knows anything. Remember that.

REINVEST DIVIDENDS AND CAPITAL GAINS
Your reinvested dividends and capital gains will continue to buy shares as the years go by, so every market crash is a great opportunity for you. Don't pass it up.

BOGLEHEADS FORUM
You will find a great, supportive investing community here: http://www.bogleheads.org/forum/index.php

GET A PRENUP IF YOU GET MARRIED
If you get married, GET A PRENUP. Know the divorce laws in your state and understand what will happen if you get divorced.

GOLD AND SILVER
It's not a bad idea to have 10% of your portfolio in gold and silver bullion, kept in a safe place (never tell anyone you have it) in your home. You can buy from Apmex.com. DO NOT PUT MONEY INTO GOLD AND SILVER ETFS. Buy gold and silver coins that you can tuck aside and keep as part of your larger portfolio.

Check the links in the sidebar of /r/investing. Most people tell beginners to start with Khan Academy and reading the Intelligent Investor by Benjamin Graham. It is the guide Warren Buffet points everyone too, regardless of experience. Also, NASDAQ has a good resource here.

I own a condo and have experience in equities, bonds, and options and for what it's worth I'd point you towards the latter if you don't want to live in the home. I don't think of rental properties as good investments, all things considered. It may be worth getting professional advice from someone in real estate to talk through the scenario. The investment side of the scenario has pluses and minuses that are much more widely known.

Here's a (grossly simplified) article from CNN Money that looks at the two investment options. The average return for equities vs real estate was 13.4% to 8.6% from 1974 to 2004, according to the article. That's 56% higher for the markets!

Finally, I'll throw out a wild card if you like the idea of a tangible investment like a single family home or duplex -- check out buying a coin operated laundry business. They're cheap, they often qualify for SBA loans, and they provide lots of free cash flow. Businesses in high rental areas seem to do best. There are tons for sale all over the country and many on Craigslist. Here's an example. That's about as much as I know about these but I've done the numbers and some have 30% annual return on equity. It could be quite the little side business if things work out in your favor. Just a thought :)

There is a great book called "Investments" (very original I know) it is written by a professor called Alex Kane (I had the pleasure to meet him, great guy). We used this book at a finance class at Harvard and I learned a lot from it. I fetched a link for you: http://www.amazon.com/Investments-Zvi-Bodie/dp/007293414X

I know it's a little... something, but Series 7 For Dummies actually does a really good job of covering the basics of what is traded and how.

I say this as an amateur economics nerd who just likes learning for the sake of it, you may well get better advice from the pros/students on here.

I saw another comment that you wanted to know how the trading floors were set up... that is really dependent on the firms. So long as you have a basic understanding of what the various desks do you should be fine.

I would read "a random walk down wall street" for a good understanding of basic theories behind investing (fundamental analysis vs technical, risk and portfolio management etc...).

Then diving into to the different schools of analysis, for fundamental analysis, I super highly recommend reading: McKinseys Book on Valuation ( http://www.amazon.com/Valuation-Measuring-Managing-Companies-Edition/dp/0470424656), you might need a quick primer on accounting and corporate accounting before jumping into that book though. Warren Buffet's Essays and books and the classic "The intelligent investor" are also good resources for insights.

For portfolio management, I would study basic modern portfolio theories
( http://en.m.wikipedia.org/wiki/Modern_portfolio_theory), and read books on portfolio management such as http://www.amazon.com/Pioneering-Portfolio-Management-Unconventional-Institutional/dp/0684864436.

But then to go even further, it will be more robust to read more about risk management and the shortfalls of such portfolio management models highlighted in the recent market crashes. "The Black Swan", "Fooled by Randomness", "Irrational Exuberance" are good books to read to more qualitatively understand risk and learn to protect yourself from it.

I initially read The Intelligent Investor around the same time in my life and struggled getting through the whole book - you are definitely not alone in that aspect.

Although the book is considered by many to be 'the bible' on Value Investing this is not to say that it resonates as well, or at all, from those who approach the book from a technical analysis or quant basis etc. Given the stage you are currently at it would make more sense to spend time reading some smaller books on various investment styles to work out which resonates with you and then do a deeper dive into the relevant field.

In saying that - if you still feel inspired to work through The Intelligent Investor pick up the newer annotated version (http://www.amazon.com/The-Intelligent-Investor-Definitive-Investing/dp/0060555661) which has some recent case studies/examples which tie Ben Graham's world a little more closely with 2016. If you are still finding it hard going just put the book down and come back to it in 6 months, it may be all you need or alternatively re-read it again (it took me till my second reading to really understand what was being said).

I picked up The Science of Algorithmic Trading a few months ago. It was just released, and from what I've read so far (the first few chapters), it's very knowledgable and a good primer. Some of it gets much more in depth into portfolio management, and TCA -- but it also gives a good overview of market micro-structure. If anyone were thinking about getting into algorithmic trading, this would be a great primer.

Reminiscences of a Stock Operator by Edwin Lefèvre. It's from 1923, but it's still just about the best book on trading and speculation that you will find and widely regarded as a must-read for investors. And in addition, it is also gives a very interesting look at Wall Street at the beginning of the 20th century.

Learn as much as you can about FIX.

There are some books that might be worth checking out, as well.

All that being said, focus on being a good programmer first and foremost. If you can show that you have researched stuff like FIX, exchange connectivity etc, that shows passion, and that's what gets you the job.

Trading and Exchanges by Larry Harris is probably the best. It tends to lean toward Equities, but many of the concepts (market participants; economics; etc) are universal to all assets. The market structure itself tends to deviate for other assets, but this should give you enough of a baseline to know what else to search for if you want to go deeper down the rabbit hole.

Second may be Empirical Market Microstructure by Joel Hasbrouck.

If you want something on more exotic asset types (STIRs or such) let me know.

[Fooling Some of the People All the Time] (http://www.amazon.com/Fooling-People-Complete-Updated-Epilogue/dp/0470481544) is a really good book on short selling.


[Quantitative Value] (http://www.amazon.com/Quantitative-Value-Web-Site-Practitioners/dp/1118328078) is a really good book as well.


If you can afford it, [Margin of Safety] (http://www.amazon.com/Margin-Safety-Risk-Averse-Strategies-Thoughtful/dp/0887305105/ref=sr_1_1?s=books&ie=UTF8&qid=1415645406&sr=1-1&keywords=margin+of+safety) is the holy grail of value investors.

Top books to get into Finance and trading. This first one is by far the most fundamental book. Most jobs you get you will be asked to read this, and even if you aren't its still an amazing read. Published in 1931, still very relevant today, you will read 10+ times over your Finance career

Reminiscences of a stock operator

Then the Market Wizards series by Jack Schwager

Market Wizards

Hedge Fund Market Wizards

The New Market Wizards

This is where I would start. GL

The Creature from Jekyll Island gives a comprehensive and fascinating account on the history, creation, and role of money. Plus, it's not dry or boring! From Amazon's description:

>Where does money come from? Where does it go? Who makes it? The money magicians' secrets are unveiled. We get a close look at their mirrors and smoke machines, their pulleys, cogs, and wheels that create the grand illusion called money. A dry and boring subject? Just wait! You'll be hooked in five minutes. Reads like a detective story — which it really is. But it's all true.

Admittedly, the author sometimes gets a little conspiracy-focused at times, but the book is well-researched with many citations.

Well my college textbook was pretty fucking in depth. My gf just used the current iteration for her Investments class. It's VERY dry and pretty hard material. You can pick up an old edition for next to nothing (my 3rd or whatever edition was almost identical to her 11th? edition except the historical shit which really is more fodder than anything).

I think this might be it (says 9th is current):

http://www.amazon.com/gp/search/ref=sr_nr_p_n_feature_browse-b_mrr_1?rh=n%3A283155%2Ck%3Ainvestments+bodie%2Cp_n_feature_browse-bin%3A2656020011&bbn=283155&keywords=investments+bodie&ie=UTF8&qid=1314819041&rnid=618072011

So save your money and get this one used:
http://www.amazon.com/Investments-Zvi-Bodie/dp/007293414X/ref=sr_1_2_title_0_main?s=books&ie=UTF8&qid=1314819145&sr=1-2

Same info, starts at $7 :-)

Names sound familiar, my book was from the mid 90s (and is on my shelf in oklahoma or I could tell you for certain).

It covers a lot, but realistically investing isn't just about the numbers. If you want help I'll give you my opinions. I should probably write a short doc on it since I keep having to come up with the same shit for all my friends and family.

Now it's been a while since I read these, and I'm not complete sure if these are the kinds of books that you're looking for, but I found them quite good:

Options, Futures, and Other Derivatives by Hull: http://amzn.com/0133456315

Investments and Portfolio Management by Bodie, Kane & Marcus: http://amzn.com/0071289143

I hope this helps!

I really enjoyed the following. Essentially a chronological collection of biographies on some of the historical hedge fund all-stars, so you are introduced to contextual history of the industry, their different philosophical approaches to trading, etc.

More Money Than God: Hedge Funds and the Making of a New Elite (Council on Foreign Relations Books (Penguin Press)) https://www.amazon.com/dp/0143119419/ref=cm_sw_r_awd_Bktbub1E58ATW

For something much more technical (i.e. If you are interested because you are considering a fund of your own):

Taxation of U.S. Investment Partnerships and Hedge Funds: Accounting Policies, Tax Allocations, and Performance Presentation https://www.amazon.com/dp/0470605758/ref=cm_sw_r_awd_Tntbub0Q4ZTYN

This has been a fundamental of investment strategy for at least 40 years. So much so that you can read about the advantage of index funds over mutual funds in wikipedia.

Here's a lay article from Wharton about it.

Here's an article from Money in 2008 that said that of the mutual funds they tracked, not a single one was profitable. Although dated, fundamentals haven't changed since then. (Hint: that a mutual fund beats its peers is not praise.)

Investment and lay financial publications routinely publish comparisons of mutuals to index funds. All of them are like the Money article.

The last I remember reading about mutuals the stats were something like: a huge percentage (something like 70-90%) of funds fail after 5-10 years, and of the ones that survive, most lose money. Of the ones that don't, only a few meet (much less beat) the market.

You need to remember that financial companies are not interested in making you money. They are interested in making themselves money. And your money doesn't just disappear. It goes to someone. (Whenever I say this I usually get howls from investment professionals.)

A simple test is to look at the annual returns of any company's funds. The numbers are dire.

In contrast, it's relatively easy to use a stock screener at a site like yahoo or google to identify any number of large caps that regularly pay dividends in excess of 10%. It requires a little work, but via dividend reinvestment a person literally can earn a fortune over time.

Anyone planning on putting money into the market needs to educate him/herself first. (And with much respect I don't mean by asking on reddit.) So here's what to do: start reading Barron's, Forbes, Investor's Business Daily, the WSJ, the Motley Fool, Seeking Alpha. Read them critically; don't just believe what they say. (As an example, I've never found the Motley Fool's suggested investments to be useful, although its analyses generally can be educational.) Here's a book, a very basic one, about the market.

Finally of course no needs to take my advice. I'm just some guy on reddit.

> whoaa why has my tutor been telling me to discount each expense per year then add them up then discount the total!

Fire your tutor, lol. That makes no sense. You come up with the FCF first then discount it. I mean, I guess you can do it his way but it's stupid. In a real model your going to have so many inputs you would need to discount. Read Valuation. Then you'll actually know why it works that way and it'll be much easier. It's a pretty big book so for this topic so you'll only need to read up to Chapter 6.

Tip: Read the whole thing. It'll do you good.

Yes OP, this is an answer you are looking for. Read about value investing, another good book to read is Seth Klarman's The Margin of Safety. And if you don't know who Seth Klarman is you have to look it up.

If you're looking for something more general then check out Market Wizards there's also a whole series with one of the books focused specifically on hedge funds.

I'm just about to start reading it myself so can't comment on it 100% but I recently listened to this podcast that features the author and he has some fascinating stories about various traders/managers so I can only imagine the book is similar in the quality of content.

More Money Than God is one that comes to mind though it is more of a narrative than a technical guide. It may be more useful to just skim through different books by managers who have written them, Alchemy of Finance, Stock Market Technique, The Intelligent Investor... etc etc

In that case, start with the famous Hull book. It requires basic mathematical foundation (i.e. intro calculus) and a bit of knowledge on probability.

Don't worry about PDEs, Monte Carlo, or anything for now. Try to understand the Hull book, which is less mathematically rigorous.

If you're still interested after that, then you can look into more advanced probability theory (via measure theory), martingales, stochastic calculus, and so forth - which requires more advanced calculus and understanding of mathematics (probably by 3rd or 4th year math if you're studying in university)

I think you need to specify whether or not you want academic oriented work or something that is more entertainment oriented. For the latter, any Michael Lewis Books (The Big Short, etc.) or David Einhorn's Book (Fooling Some of the People All of the Time) would be good.

Personally I just search for papers. There are lots of good academic papers on market microstructure, specific strategies, I just had some pulled up too but I lost them, if I find any I'll post them


Just to make sure these are the books that are considered too old, because I still think they have a lot of good information:

Trading and Exchanges

Algorithmic Trading & DMA

to complement these (and i know you asked for books):


video:


how the economic machine works


pdf:

turtle trading
i put this because this is the way real people making real money traded. and the rules are VERY simple.

books:

market wizards

reminiscences of a stock operator



urls:

the best investment advise you'll never get


--i will come back and edit this post and add some more stuff.


--> note, i RARELY trade single name stocks.

Take a look at Algorithmic trading and DMA which is an OK overview book of both the technical (high level) and strategy sides. It's not great but I'm not aware of any better book out there.

Sounds like market microstructure. I don't know anyone working on the topics you mention specifically, but Maureen O'Hara at Cornell is a guru on MM. There is also this book on Empirical Market Microstructure and a survey paper by Biais, Glosten, and Spatt that might provide references for some of the areas you're interested in.

Around 20 or so. I think Harris' Trading & Exchanges is one of the best that I read in the beginning, if that's what you're looking for.

I don't trade off candlestick patterns.

This isn't just corp. finance exclusively but is a good resource:
http://www.amazon.com/Financial-Modeling-Simon-Benninga/dp/0262026287/ref=sr_1_1?ie=UTF8&qid=1341272476&sr=8-1&keywords=financial+modeling

Currently reading this for my derivatives class. Luckily it just became highly relevant to the job interview I have next month.

While it is but a part in the M&A process, the book "Valuation: Measuring and Managing the Value of Companies" by McKinsey is one of the bibles on Valuation.

Amazon link.

After reading Lewis' book, reading different blogs, ordering this book, and grasping for answers here, your reply has answered more questions than all of the above combined. I'm going to look into the information available from the exchanges -- just googling some of the exchange-specific order type names has turned up a wealth of info.

Thanks so much for the reply; I may have more questions later but I should do some reading first.

Is this the same one just newer? Would you recommend?

Here's some for the value investor:


Security Analysis - Graham and Dodd

Value Investing: From Graham to Buffet and Beyond - Bruce Greenwald, et al.

Value Investing: Tools and Techniques - James Montier

The Little Book of Behavioral Investing: How not to be your own worst enemy - James Montier

Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor - Seth Klarman

Security Analysis and Business Valuation on Wall Street - Jeffry Hooke

I have an earlier version of this I used this in a BComm finance degree majoring in Finance. I'm now in a Masters of Finance and my intro investments class used it, and I'm also studying for my CFA level II test, and the bodie kane book makes up part of that reading list.

It probably hits one step above high school. For example the book gets through standard deviation by showing it in it's normal formula, and doing a number proof of how it works. It doesn't go into the theory of what standard deviation is, you need a stats book for that.

Apparently I once bookmarked this book when I was looking to learn more about HFT: http://www.amazon.com/Trading-Exchanges-Market-Microstructure-Practitioners/dp/0195144708/ref=wl_it_dp_o_pC_nS?ie=UTF8&coliid=I2YK1ET4604N7S&colid=2UOSB6L07SJO4

http://www.macabacus.com

http://www.amazon.com/Investment-Banking-Valuation-Leveraged-Acquisitions/dp/0470442204

http://www.amazon.com/Valuation-Measuring-Managing-Companies-Edition/dp/0470424656

And a little later down the road upon graduation: http://www.cfainstitute.org/programs/cfaprogram/Pages/index.aspx

https://www.amazon.com/Trading-Exchanges-Market-Microstructure-Practitioners/dp/0195144708/ref=mp_s_a_1_3?keywords=trading+and+exchanges&qid=1572839166&sprefix=trading+and+ex&sr=8-3

Old but a classic

It sits on our desk for reference.

http://www.amazon.ca/Options-Futures-Other-Derivatives-Edition/dp/0133456315

(for the OP)

I think it's doable.
If you do it, you HAVE to read this.

http://www.amazon.com/Trading-Exchanges-Market-Microstructure-Practitioners/dp/0195144708/ref=sr_1_1?ie=UTF8&qid=1377335426&sr=8-1&keywords=trading+and+exchanges

The Creature from Jekyll Island

http://www.amazon.com/gp/aw/d/091298645X/ref=redir_mdp_mobile/178-6230627-7590562

https://www.amazon.com/dp/0143119419/ref=cm_sw_r_cp_apa_AFYHAbT10A48S

May not be exactly what you're looking for, but I've had Trading & Exchanges: Market Microstructure for Practitioners as a textbook for a course at my university.

It covers a lot of useful stuff (from amazon): "This book is about trading, the people who trade securities and contracts, the marketplaces where they trade, and the rules that govern it. Readers will learn about investors, brokers, dealers, arbitrageurs, retail traders, day traders, rogue traders, and gamblers; exchanges, boards of trade, dealer networks, ECNs (electronic communications networks), crossing markets, and pink sheets. Also covered in this text are single price auctions, open outcry auctions, and brokered markets limit orders, market orders, and stop orders. Finally, the author covers the areas of program trades, block trades, and short trades, price priority, time precedence, public order precedence, and display precedence, insider trading, scalping, and bluffing, and investing, speculating, and gambling."

It might be a bit dated by now, but it's still very nice to have. Link to book extract here, for evaluation purposes.

This book of 1921 or 1923 and it is a must read about trading and it is still VERY relevant today.

Check it on amazon and all the comments.

Fooled by randomness is excellent as other have mentioned.

To understand Soros read The crash of 2008 and what it means... he is the opposit of of warren buffet and both make still lots of money at very different end of the game and both lost a lot in the crash and recovered nicely.