The Strategic Bond Investor: Strategies and Tools to Unlock the Power of the Bond Market

by Anthony Crescenzi

Book Overview

Discover Profit Opportunities in Today's Bond Market

"Tony Crescenzi knows bonds and his book proves it."
Bill Gross, Managing Director, Pacific Investment Management Company

In 2002, Anthony Crescenzi opened the door to an innovative new style of investing with his publication of The Strategic Bond Investor. The book instantly became the go-to guide for investors seeking an aggressive yet risk-conscious...

• Format: Hardcover
• Language: English
• ISBN: 0071667318
• ISBN13: 9780071667319
• Release Date: July 2010
• Publisher: McGraw-Hill Education
• Length: 418 Pages
• Weight: 1.68 lbs.
• Dimensions: 1.3" x 6.5" x 9.3"

Customer Reviews

Insightful, smart, and relevant

The Strategic Bond Investor is much more thorough and relevant than most bond books. Others who commented discussed the lack of certain strategies, but those reviews miss the point. The book offers strategies and insights that are the most important ones to grasp: those which help investors to forecast what to expect next in the bond market. Sure, laddering, and other traditional strategies are important, but they do not represent the path to big money, understanding trends in the markets is far more important and this book is a major help in that regard. Other books are very weak in talking about the things that move markets. For example, there is an excellent section on the inverted yield curve, and insights into tools for tracking market sentiment and how to use futures to gather market intelligence. Mr. Crescenzi works on Wall Street, so his insights are better than anyone on the outside could deliver. There is also an appendix in the back of the book that gives great insights into the major monthly economic news that is released each month. The Strategic Bond Investor is far above other bond books and is easy to understand.

complements Thau

By far the best introduction to bonds is Annette Thau's The Bond Book. But Thau makes no attempt to explain why the price of a given bond fluctuates over time. Crescenzi, one of the most frequently cited of the legion of professional Fed watchers, tries to make up this deficiency, describing the impact of Fed moves, market perceptions of the state of the economy, the supply of new issues, etc. on bond prices. But Crescenzi has a much more ambitious agenda. He explains how the yield curve can be used to forecast developments in the economy. Other chapters summarize how to predict trends within the bond market, from analyzing the put/call ratio to interpreting the economic data that a dozen or more agencies spew out every week. He makes the case that knowing the bond market will be useful to anyone with a credit card in his or her wallet. Crescenzi also wants the book to serve as a general introduction to bonds. There are chapters on "bond basics," types of bonds, risks facing the investor, and then inexplicably late in the book, chapters on credit ratings and using the internet. The latter is particularly weak chapter (Thau's isn't much better.) For whatever reasons, Crescenzi doesn't explain clearly how to use the internet to research individual bonds and check recent trades, and doesn't give the URLs of the sites that let you do this and purchase bonds. If it sounds like the book is a bit of a hodge-podge, that's because it is. The book's organization leaves a lot to be desired, apart from the scope being too broad. Not only is the sequence of chapters mysterious, but there's a fair amount of repetition. While the writing itself is pretty lively, or at least conversational, I'm not sure Crescenzi has figured out his intended audience. Even though this is an introduction, some readers are bound to feel he's assuming too little and being condescending at times. The best chapters are probably 7,8, and 9 on the yield curve, real yields, and rate forecasting. Crescenzi apparently wasn't trained as an economist or historian, and when he tries to describe the effect of interest rates on politics, he goes awry. A big fan of Clinton, he imagines Hoover believed in and practiced "laissez faire" and that budget deficits inevitably result in high interest rates. A chart of deficits as a percent of GDP vs. the yield on the 10 year note would reveal the wrongheadness of this claim. In general, there are far too few charts and graphs thoughout the book. Many more important points ought to be represented graphically--like changes in yield spreads in Ch. 12. Still another gripe--munis get slighted throughout the book. Despite these negatives, The Strategic Bond Investor fills an important niche and is definitely worth reading. Crescenzi is an ethusiastic teacher and he makes a fairly complex subject accessible. Though there are certainly books introducing readers to the economic indicators and explaining the Federal Reserve System, I don't

Delivers in what it promises, not for quants

As the title says strategies and tools to unlock the power of the bond market. It delivers in that it covers the strategies and tools needed to make intelligent decisions on bonds. Before you look into this book I must warn you that this is not a quantitative book. This book covers such things as qoute depth, yeild curves, credit ratings and so on. The content of this book goes deeply into the determination of interest rates. From watching the Fed to reading what the market might be heading. There is a chapter dedicated to watching the Fed. One of the points that stuck me in this book is how not to follow dumb money (e.i. speculators, Anthony Crescenzi's advice is to follow the smart money.This book is for is not for advanced for people. I'am aware that there are other books comparable to this one but this is the only book I have read and not planning to read another book comparable to this one. There are a lot of resources of in this book that make "The Strategic Bond Investor : Strategies and Tools to Unlock the Power of the Bond Market" worthwhile to read. I have to agree with one of the reviewers about his writing style, it is in fact engaging.

Round out your knowledge base

This book is the type of book that reminds you that stocks are not the only investment around. In plain language he discusses yield curves and backs up his information with solid charts and graphs.Mr.Cescenzi opens your eyes to the psycology of those that sell bonds and the importance of bonds in your own personal portfolio. Since I am an author of Futures/Commodities books and an investor in Bond Futures, I read this book to enhance my knowledge of bonds and to take advantage of the bond trading pits in Chicago.I believe that's the only failure of the book. He discusses that there are no centralized exchanges for bonds and grossly neglects that many bonds have a futures component and are traded for only a fraction of their face value. All in all this is a great resource book and should be seriously considered for those investors that are tired of being abused by the stock market.

Highly Recommend!

Unlike books addressing stock market investing, there are relatively few investor-oriented Bond books, probably due to several reasons - (i) bond concepts are somewhat more quantitative compared to stocks, (ii) bonds have no central "bond exchanges" with readily available price quotes, (iii) bonds can't be sold and bought as easily as stocks, (iv) perception is people can't "swing for the fences" with bonds.However, as the "Strategic Bond Investor" makes clear, it is imperative to become familiar with bond market dynamics to understand how and why interest rates are set, which in turn affects the economy and the stock market. The book does a wonderful job of laying bare the intricacies of the bond market, at the same time stays away from the more technical aspects. The writing style is very engaging, and the content is very organized. The discussion on Bond Types - how big various types of bond markets are and how they got that way, is fascinating. So are practioner-oriented "rules of thumb" permeating several chapters. Chapter on "real yields" was a bit confusing (when inflation is expected to go up or down, why do real yields move as opposed to "expected inflation"?) I initially felt the visual presentation (charts, graphs, tables etc) was somewhat limited, but as the book progressed, it seemed to be just the right amount, and contained a lot of high impact information. There is a good appendix containing a primer on economic indicators. With this, you'd be better able to judge the reaction of the market to CPI, employment, consumer sentiment, etc., etc.The book seemed somewhat repetitive at places, but still read well. With this book, one should be able to answer: (1) How can bonds be expected to perform given the current economic information, market sentiment, etc. (2) what types of bonds can be expected to do better? I highly recommend the book for purchase. Another great book for the bond investor would be William Gross's "Everything You've Heard About Investing is Wrong!"