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Review: Treynor on Institutional Investing
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Manoj Rengarajan

Reviewer Manoj Rengarajan holds a Master of Financial Engineering - University of California, Berkeley and he works in the investment management industry and specializes in providing economic and investment outlook and strategy for global equity and government bond markets. He has an educational background in financial engineering, business, and engineering, and professional interests include business, finance, economics, technology and related areas.

 
By Manoj Rengarajan
Published on April 24, 2009
 


Author: Jack L. Treynor

ISBN: 978-0-470-11875-7

Jack Treynor's latest book on institutional investing is a compilation of 97 research articles that were originally published over the past 46 years in leading finance journals. The book comprises of ten parts which covers extensively almost all aspects of institutional investment management.



Author: Jack L. Treynor
ISBN: 978-0-470-11875-7

Click Here To Purchase Treynor On Institutional Investing (Wiley Finance)

Jack Treynor's latest book on institutional investing is a compilation of 97 research articles that were originally published over the past 46 years in leading finance journals. The book comprises of ten parts which covers extensively almost all aspects of institutional investment management.

The first part of the book deals with a crucial aspect of investment management - risk. This section throws light on the differences between business and statistical price risk and how to use portfolio composition for estimating risk.

The section on risk management also looks at the driver of the quality of municipal bonds and an approach to manage risk when the target date on the portfolio is several years away.

Treynor's seminal paper, “Toward a Theory of Market Value of Risky Assets,” explains the Capital Asset Pricing Model and the Security Market Line which are among the basic tenets of modern finance theory. 

The author provides a solid framework to evaluate the performance of investment companies and a study into  whether mutual funds can really outperform the broad market.

The section on Economics examines the Phillips curve - the relationship between inflation and unemployment - and further looks at the relationship between inflation and stock prices. Among other gems of analysis, there is an piece on the trade off in taxing income and capital to finance the fiscal burden.

The section on trading analyzes the technical, information and value motivations of market participants, while examining market micro-structure and the basis for successful trading. These are further expanded to implications for research and portfolio management, as well as for policy makers.
    
Fundamental questions on accounting including a focus on users of financial statements, basis of accrual accounting, issues in corporate disclosures are explored.

The section on investment value examines the value of productive physical assets, valuing franchise in growth companies, intellectual property, value of control, economic goodwill, and valuing ideas.

Active management gives insights into how to use security analysis to improve portfolio selection and returns to long term investing.

Pensions explores the riskiness of assets in pension plans and skewed incentives in such plans which leads to adverse behavior by pension plan sponsors.

The book finally concludes with a series of interesting cases which explores the range of topics that have been covered in the book, including trading, corporate governance, economics, and fund analysis, and also discussion of recent events and current topics in investment management.

Treynor on Institutional Investments is a great compilation of thought provoking and insightful research in a wide range of issues that are pertinent to the institutional investor. This book is a must read for any professional in this area.


Click Here To Purchase Treynor On Institutional Investing (Wiley Finance)