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Equity Management: Quantitative Analysis for Stock Selection

Copyright © 2000

Bruce I. Jacobs and Kenneth N. Levy

Foreword by Harry M. Markowitz, Nobel Laureate

Authorized Chinese Translation from English Language Edition
Published by McGraw-Hill, China Machine Press, 2006.


“This is a great compendium of Jacobs and Levy’s excellent research. These articles have certainly influenced my own work, and should be considered mandatory reading for any equity investor interested in quantitative techniques.”
Richard Bernstein
, Five-Time Winner, Institutional Investor’s All-America Research Team, Chief Quantitative Strategist, Merrill Lynch & Co.

“Not only have Bruce Jacobs and Ken Levy run a successful asset management firm for a number of years, they have been willing to share some of their insights with the investment community through their writings. This compendium of their work demonstrates how investors can combine economic and company fundamentals and qualitative factors in the investment process. While not everyone agrees with their conclusions, few would be bold enough to disregard their arguments or argue with their success.”
Jon A. Christopherson
, Research Fellow, Frank Russell Company

Equity Management is a book that every serious student of stock selection and portfolio management should read and devour. Bruce Jacobs and Ken Levy are outstanding members of the small band of first-rate academics (including several Nobel laureates) who have managed with great success to implement their academic research in the real world of Wall Street. The articles in this collection present a coherent picture of the authors’ path-breaking research into the numerous “anomalies” which, taken together, can be used to build a successful stock selection and portfolio construction process. Jacobs and Levy make a very strong case, both in their research and in their practice, for their proposition that by combining many factors, each of which may be individually too weak to base stock selection upon, a successful “quant” strategy can be developed. Every advanced investments student in an M.B.A or Ph.D. program, every CFA candidate, and every portfolio manager should read this book.”
David K. Whitcomb
, Professor Emeritus of Finance, Rutgers University and
Founder & Chief Executive Officer, Automated Trading Desk, Inc.

“As I was reading this book, I was reminded of how thought-provoking and prolific Bruce Jacobs and Ken Levy really are. Any one of these articles is deserving of an ‘article of the year’ award. Together, they provide an abundant source of ideas for any investor interested in winning stock selection techniques.”
Brian Bruce
, Editor-in-Chief, The Journal of Investing

“Normal investors commit normal cognitive errors; they confuse good stocks with good companies, and markets that have risen with markets that will rise. Jacobs and Levy, long-term students of financial markets, demonstrate how the exceptional investor can profit by taking advantage of the actions of normal investors. This is an insightful book.”
Meir Statman
, Glenn Klimek Professor of Finance, Leavey School of Business, Santa Clara University

“Many cooks have whipped up a recipe for quantitative investment management, but only Bruce Jacobs and Ken Levy can be said to have created a whole cuisine. The thoroughness and originality of their thinking should inspire and challenge every investment manager.”
Wayne H. Wagner
, Chairman, Plexus Group, Inc.

“I have long made the work of Jacobs and Levy required reading for my portfolio management class. They combine rigorous academic research with valuable insights into the real world of investment practice. Equity Management should be on the bookshelf of every serious student of the stock market today.”
Edward M. Miller
, Research Professor of Economics and Finance, University of New Orleans

“Jacobs and Levy have composed a virtual encyclopedia of techniques and strategies that investors can use to outperform the stock market. It is destined to take its place among the classics of the field.”
Frank J. Fabozzi
, Adjunct Professor of Finance, School of Management, Yale University and Editor, The Journal of Portfolio Management

“Last year has been an outstanding year for useful books that provide an insight into modern portfolio theory. One of these is Equity Management: Quantitative Analysis for Stock Selection by Bruce Jacobs and Kenneth Levy. . . Much of their work focused on the complexity of the stock market and the limitations of the idea of market efficiency. They discuss ideas such as long-short investing, which are just emerging in Australia, in considerable detail.”
David Lee, Consultant to Australian, New Zealand and Asian Super Funds, in Shares & Personal Investor (Australia), August 1, 2000

“Everything from portfolio engineering, the long-short investment strategy, and data analysis for market inefficiencies--it’s all featured in this modern-day classic that’s already become required reading in academic programs.”
Financial Planning Interactive, September 29, 2002

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