The Bond Book: Everything Investors Need to Know About Treasuries, Municipals, GNMAs, Corporates, Zeros, Bond Funds, Money Market Funds, and More
Author: Annette Thau
List Price: $29.95
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ISBN: 0071358625
Publisher: McGraw-Hill Trade (02 November, 2000)
Sales Rank: 13,829
Average Customer Rating: 4.73 out of 5
Customer Reviews
Rating: 5 out of 5
Intelligent, comprehensive book
This is a clear, thorough, comprehensive look at the world of bonds, starting with some general explanations and then going through each major category of bond in turn. The only problem is that the book is getting old and some of the examples and explanations are based on market conditions that no longer exist. However, the book is excellent and certainly stands the test of time.
Rating: 4 out of 5
Good Overview of the Fundementals
Thau provides a good, thorough overview of bonds from beginning to end, including what you need to know about "bond math." I came to this book as someone both interested and invested in the stock market and I wanted to expand my knowledge to include other types of investments. The Bond Book definitely served my purpose. I recommend it to any beginner or novice investor looking to learn more about the nuances and varieties of fixed-income securities.
Rating: 4 out of 5
comprehensive review of bonds
This book can help you make money. How? It reviews the history of spreads between Treasuries and Municipals, between Treasuries and Junk bonds, and between Treasuries and other types of bonds/securities. By buying the appropriate security when the spread is abnormally large by a wide margin, which admittedly may only occur once every ten years or so, I believe one could make a ton of money. An example would be to buy junk bonds when the spread between junk and treasuries exceeds 1200 basis points. Another example would be to buy municipals if their yield surpasses the treasury benchmark. Patience will be required, though, since, as the author points out, it is tough to make a killing in the bond market all the time (i.e. the market is usually highly efficient).The author also does a terrific job pointing out the different types of risk (reinvestment, inflation, currency, interest rates, credit, etc.) for all the different types of securities and duration of securities. She then tells you how to select a security appropriate for your needs given the risks. For example, if you don't want to worry about a rise in rates destroying the value of your bond, buy one that you can hold to maturity and collect at par. Better yet, buy one with a short duration.
In conclusion, any well rounded financier needs to know about bonds--even Warren Buffet--the famous "stock picker"--invests a ton in bonds. This book is a great start to earning this skill.
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