Book Reco

I guess this is not the time when people would be going behind books on Derivatives, but I recently came across a nice book. It is called "Option Volatility and Pricing: Advanced Trading Strategies and Techniques" by Sheldon Natenberg. The Amazon Link can be found here.

The most popular book used on Indian campuses is "Options, Futures and Other Derivatives" by John C Hull. It is cheaper and much easier to obtain. It is my personal opinion, but I found Hull verbose and difficult to read.

The basic difference is, Hull gets into the mathematics, whereas Sheldon Natenberg is more of a "How Things Work" kind of book. Sheldon Natenberg was an Options trader while John Hull comes from an academic background. Both books are excellent in their own ways but the difference lies in the language and the mode of presentation.

Hence, if you are looking for a starter book that is mathematically less intimiditating or if you have read Hull and found it a bit above your head, I would strongly recommend Sheldon Natenberg.

Another book that has been strongly recommended to me (from the point of view of practise) is "Dynamic Hedging: Managing Vanilla and Exotic Options" by Nicholas Nassim Taleb.

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'Tis the time for alternate views

Given the current turmoil, one chances upon more articles questioning the integrity of the markets. In my view, the question is not so much as to whether markets work, but more of whether we must accept the boom and bust behaviour that has been characteristic of markets. While all of us enjoyed the highs of the boom, the current "bust" (which would be an understatement) has left most people questioning whether that was all worth it. (In fact, whether it was all there to begin with in the first place)

One such work which questions market fundamentalism is "The Alchemy of Finance" by George Soros. He delves a bit into philosophy, raising fundamental questions of how the human mind learns and understands. He uses that to build his "Theory of Reflexivity" making some important observations in the process. Frankly, I have found the book very difficult to read. I have been truly laboring through the pages. In fact, if it was not written by Soros, I would have discarded after one sitting. This blog is purely meant to highlight the existence of the theory. I shall not attempt to explain the theory as I am not sure I even understand it.

It may also be noted that the Theory of Reflexivity has not been taken very seriously in Academia. But, there are some intuitively appealing points for the practitioner. Again, if you have never been truly convinced or impressed by the Efficient Markets Hypothesis, this could be an alternative viewpoint to consider.

Carnatic Music Primer

Last term I had taken a course called Tracking Creative Boundaries. During the course, the professor mailed us an excellent primer to understand the technical aspects of carnatic music. Like always, I did not read it during the course. (sigh... a bit of discipline is all I ask for :P)

This is a classic guide for dummies. The biggest stumbling block for many a beginner interested in classical music is the forbidding jargon employed by aficionados. As a general rule in life, I am suspicious of people who use too much jargon and I have always harboured a suspicion that most people who "ooh aah" about carnatic music may not really be that good as a beginner may think. (A bit more discipline and a little less cynicism... the list grows!)

Anyway, the treatment (if one can use that word) in these 4 parts is accessible, yet sufficiently technical. Most importantly, the language is easy to understand. I have read the first part so far and I have found the analogies very useful to get a basic picture. Enough talk! The links can be accessed here.

I really liked this, so at the risk of repeating myself, if you have always wanted to know something about carnatic music (or even just about music) but was scared to look like a dumbass, you just have to read these pages.

P.S: These are pretty long HTML pages. One easy way would be to ctrl-A, ctrl-C, ctrl-V on to a word file. It is unlikely you would read it in one sitting. I found it easier to keep track of where I was.

Resource for learning HTML

I am embarrassed to admit this, but I really did not know HTML coding until yesterday! It is so cold to step outside, I get out only when I have to. Gone are the days of walking by Helsinki's port, or the walks to Hietsu beach.

As a result of being confined inside and the absence of a TV and the presence of an awesome wifi connection, I spend an inordinate amount of time on the internet. I came across this site by Dave Raggett. You can find info about the author here.

The following pages give you a quick guide to coding up a half decent website. He has divided it into Basics, Advanced and Adding a Touch of Style. It took me around 3.5-4 hrs to do the whole thing. But that it is because I took lots of breaks in between which in turn is because I hate reading off the laptop screen. If you have always wanted to do HTML, but haven't, this is really a quick get to work kind of a guide.

Corporate Finance Link

Stumbled on to Prof. Aswath Damodaran's page from a friend's status message.

If you have taken Corporate Finance before or even if you did and think that your teacher was the studdest prof. to take the subject, I would recommend the webcasts on Corporate Finance.

The website can be accessed here. To access the webcasts, click on Classes&Support -> Corporate Finance (Full Semester MBA Class) -> Webcasts.

Wish more people really tore apart the subject as Prof. Damodaran does!

Somerset Maugham

Stumbled upon one of my all time favourite short story, The Verger by Somerset Maugham.

The story can be found here. (the webpage looks a bit plain but will be worth your time)

Two other favourites are:

Lord Mountdrago (A Google Books link)

Mr.Know All

Do read these if you are in the mood for a good read.

What it would take to write like this!