The issue of finance is very critical to the daily functioning of corporate organizations. Therefore, everyone must be financially literate. That is why it is important to review this book “How to Read the Financial Pages” by Michael Brett. Brett is a freelance financial journalist, former editor of “Investor’s Chronicle” and a frequent lecturer on financial topics.
According to Brett, this text has been an excellent first-choice buy for over ten years for anyone who wants a solid but friendly foundation in finance and investing. This author says that removing the mystique from the world of investment and finance, the text is a guide for reading and understanding the financial press and the markets and events it covers.
Brett adds that, assuming no financial knowledge, the text offers a valuable explanation of how the financial world works, from money markets to commodity markets, investment indices, and takeover bids.
This text contains 23 chapters. Chapter one is titled “First Principles.” According to Brett here, write about money and can’t avoid technical terms entirely. He says that the simplest terms and concepts should be covered up front because they will appear over and over again. “Fundamental for all financial markets is the idea of obtaining a return on money. Money has to work for its owner,” says this author.
He says in short, money can be deposited to produce income and can be used to buy commodities or goods that are expected to increase in value but cannot, or can be directly or indirectly invested in stock market values. that normally produce an increase in value. income, but also show capital gains or losses.
This author emphasizes that there are many variations on each of these themes, but you need to keep the principles in mind and the variations fit into place. Regarding markets and interest rates, Brett explains that for each type of investment and / or many of its derivatives, there is a market. He adds that there is a money market in London and it is not a physical market, since transactions are carried out over the phone and the price a borrower pays for the use of money is the interest rate.
In Brett’s words, “There is a currency market: the foreign exchange or forex market. There are commodity markets. And there are markets for government bonds and corporate stocks: the main national market here is the London Stock Exchange. Much of what you read in the financial press about these markets, their movements and the investments made in them. “
The important point, he says, is that no market is completely independent of the others and the linking factor is the cost of money. This author says that if interest rates go up or down, there is likely to be a wave of movement in all financial markets. He educates that this is the single most important mechanism in the financial sphere and is behind much of what is written in the financial press: from the discussion of mortgage rates to the reasons for movements in the edge stock market. Golden.
“Money will gravitate to where it gets the best return, commensurate with the risk the investor prefers to take and the length of time they can tie up their money,” says Brett.
Chapter two is based on the topic of money flow and money men. According to this author here, when a financial journalist describes someone as “an eminent figure in the city,” they are probably serious because the man may be a high-ranking member of the banking system. Brett adds that if a journalist describes someone as “the city’s controversial financier,” “they are probably getting as close as they dare within defamation laws to calling them a financial rake!”
But what exactly is this ‘City’ that houses these characters and many more? asks this author. He says that of course it is a geographical area on the east side of central London, often described as the Square Mile, adding that ‘The city’ is most often used as a convenient umbrella term for commercial institutions in the heart of the British financial system. . Brett explains that they don’t necessarily operate within the City of London’s square mile, although a surprising number of them do.
He says they provide the financial services that grease the wheels of industry and commerce. According to him, one of the most common criticisms of the City is that it is too far removed from Britain’s own productive industries. Brett says that while some parts of the City have always had an international perspective, the big change in the last 20 years is the internationalization of even the most traditional national institutions, like the London Stock Exchange. “The city is a major source of invisible income for Britain’s balance of payments. Financial services generated overseas net profits of nearly £ 32 billion in 1998,” he reveals.
In chapters three through ten, this author examines concepts such as companies and their accounts; investment ratios; refining the figure; variable income and stock market; what moves stock prices in normal times and in the crisis of ’87; stock market launches; issue more shares and buy back shares; and bidders, victims, and legislators.
Chapter 11 is titled “Venture Capital and Leveraged Acquisitions.” According to Brett here, to meet different financing needs, there has been rapid growth in venture capital funds, organizations that provide financing, sometimes a mix of equity and loans, but often just one or the other, for companies that don’t they are publicly traded.
This author says: “Because it is provided to finance unlisted companies, this type of equity financing is often referred to as private equity. Many of the venture capital funds are affiliates of existing financial institutions: commercial banks or compensation, insurance companies or pension funds. “
He educates that another tax-favored investment vehicle designed to encourage venture investment in private companies is the venture capital trust. A venture capital trust must hold at least 70 percent of its investments in commercial companies that are not publicly traded – generally the same type of company that would qualify for the Enterprise Investment Scheme, adds Brett.
This expert highlights that the venture capital trust itself is very similar to an ordinary investment and must be listed on the stock market.
In chapters 12 to 19, the author analyzes analytically concepts such as wages, bonuses, and reverse capitalism; government and corporate bonds; banks, borrowers and bad debts; money markets; currencies and euro; international money; financial derivatives and commodities; and insurance and Lloyd’s after the problems.
Chapter 20 is titled “Market and Business Property Declines.” According to this author, commercial property (that is, office buildings, shops, factories and warehouses) has been one of the main avenues of investment for insurance companies and pension funds. Brett adds that it was less popular at the end of the millennium than before.
However, he says there is no central market in commercial property, emphasizing that the “market” is largely organized by the major firms of licensed surveyors or real estate agents. Brett explains that these companies provide a variety of real estate investment services. “They advise on property portfolios, often manage portfolios on behalf of institutions, provide appraisals, negotiate rentals, purchases and sales, and help manage financing for developments,” adds the author.
In chapters 21-23, Brett directs his intellectual searching light to concepts such as savings, pooled investing, and tax shelters; oversee the City; and the financial pages when it comes to printing and the Internet.
Style wise, the book is a hit. For example, the book is well presented and the language is standard and simple, making it easy to understand the subject despite the technicality of the terms. Stylistic success is expected, given that Brett is a freelance financial journalist and thus a financial communicator.
The depth of the book’s research is also commendable.
However, the definite article “The” constitutes a structural redundancy in the title of the book. That is, the title should have been “How to read the financial pages”, not “How to read the financial pages”.
Generally, this text is a masterpiece on financial education. It is highly recommended to anyone who is willing to expand their knowledge financially.