The Dao of Capital: Austrian Investing in a Distorted World [NOOK Book]

Overview

Praise for The Dao of Capital

"A timely, original, right-economic principles and history-based approach to investing. Drawing on impressive philosophical building blocks, The Dao of Capital illuminates the wellsprings of capital creation, innovation and economic progress. Dazzling!"
—Steve Forbes, Chairman and Editor-in-Chief, Forbes Media

"This is a magnificent, scintillating book that I will read over and over again. Every page is ...

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The Dao of Capital: Austrian Investing in a Distorted World

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Overview

Praise for The Dao of Capital

"A timely, original, right-economic principles and history-based approach to investing. Drawing on impressive philosophical building blocks, The Dao of Capital illuminates the wellsprings of capital creation, innovation and economic progress. Dazzling!"
—Steve Forbes, Chairman and Editor-in-Chief, Forbes Media

"This is a magnificent, scintillating book that I will read over and over again. Every page is eye-opening, with numerous areas for testing and profits in every chapter. Here's an unqualified, total, heartfelt recommendation, which coming from me is a rarity, and possibly unique."
—Victor Niederhoffer, Author of The Education of a Speculator

"The Dao of Capital is an impressive work. Spitznagel's approach is refreshing—scholarly without being tedious. What a broad look at economic history it provides!"
—Byron Wien, Vice Chairman, Blackstone Advisory Partners LP

"Wall Street gamblers who believe the Fed has their back need to read this book. Mark Spitznagel provides a brilliant demonstration that the gang of money printers currently resident in the Eccles Building have not repealed the laws of sound money nor have they rescinded the historical lessons on which they are based."
—David Stockman, Former U.S. Congressman, Budget Director under Ronald Reagan, and Author of The Great Deformation

"Mark Spitznagel assembles the best insights in human nature and economics to bring order out of the chaos of our world. Economists, investors and lay persons alike will find abundant treasures in The Dao of Capital, one remarkably useful and exciting book!"
—Lawrence Reed, President, Foundation for Economic Education and President Emeritus, Mackinac Center for Public Policy

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Editorial Reviews

From the Publisher
"Spitznagel has written an essential new book. Indeed, The Dao of Capital: Austrian Investing in a Distorted World might be one of the most important books of the year, or any year for that matter." (Forbes, September 2013)

"...a beautifully crafted book, one I can recommend to readers of all political/economic persuasions..." (Seeking Alpha, September 2013)

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Product Details

  • ISBN-13: 9781118416679
  • Publisher: Wiley
  • Publication date: 8/16/2013
  • Sold by: Barnes & Noble
  • Format: eBook
  • Edition number: 1
  • Pages: 368
  • Sales rank: 245,161
  • File size: 7 MB

Meet the Author

Mark Spitznagel is the founder and President of Universa Investments, an investment advisor that specializes in equity tail-hedging—or profiting from extreme stock market losses as a means of enhancing investment returns. In addition to hedge fund investing, Spitznagel's twenty-year investment career has ranged from independent pit trader at the Chicago Board of Trade to proprietary trading head at Morgan Stanley. He also owns and operates Idyll Farms in northern Michigan.

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Table of Contents

Foreword xvii

Introduction xxiii

Chapter One: THE DAOIST SAGE
Klipp's Paradox 1

The Old Master 3

The Soft and Weak Vanquish the Hard and Strong 6

Into the Pit 9

The Privileges of a Trader 12

Robinson Crusoe in the Bond Pit 15

Fishing in "McElligot's Pool" 18

Enter the Austrians: A von Karajan Moment 18

A State of Rest 21

Guiding into Emptiness . . . 23

Moving On 26

The Wisdom of the Sages 29

Chapter Two: THE FOREST IN THE PINECONE
The Roundabout and the Logic of Growth 33

The Forest and the Tree 36

The Slow Seedling 39

Wildfire and Resource Reallocation 41

The Conifer Effect 43

A Logic of Growth 49

Chapter Three: SHI
The Intertemporal Strategy 51

The Dao of Sun Wu 56

Shi and the Crossbow 58

Li—The Direct Path 59

Shi and Li at the Weiqi Board 60

A Common Thread, from East to West 64

An Attack of Misunderstanding 68

On War—An Indirect Strategy 70

Shi, Ziel, Mittel, und Zweck 74

Chapter Four: THE SEEN AND THE FORESEEN
The Roots of the Austrian Tradition 75

That Which Must Be Foreseen 78

At the Viennese Crossroads Between East and West 85

The Teleology of Baer’s Butterfly 88

Menger Establishes the Austrian School 89

Tutor to the Prince 93

Methodenstreit 97

Österreichische Schule 101

Chapter Five: UMWEG
The Roundabout Path of the Unternehmer 103

Postulating the "Positive" 105

Produktionsumweg 108

Böhm-Bawerk, the Bourgeois Marx 113

Faustmann’s Forest Economy 116

Rings of Capital 122

Henry Ford: The Roundabout Unternehmer 125

The Roundabout of Life 134

Chapter Six: TIME PREFERENCE
Overcoming That Humanness About Us 139

"Radical" Böhm-Bawerk and the Psychology of Time Preference 145

The Curious Case of Phineas Gage 149

The Shi and Li Brain 151

The Subjectivity of Time 153

The Trade-Off of an Addict 158

No Zeal for Ziel on Wall Street 161

Adapting to the Intertemporal 164

Chapter Seven: "THE MARKET IS A PROCESS" 167
The Man Who Predicted the Great Depression 169

Fleeing the Nazis 173

Human Action 175

Unternehmer in the Land of the Nibelungen 179

Genuine Change Is Afoot in Nibelungenland—A Market-Induced Drop in Interest Rates 187

Distortion Comes to Nibelungenland—The Central Bank Lowers Rates 190

Time Inconsistency and the Term Structure 194

The Day of Reckoning Comes to Nibelungenland 198

The Austrian View 199

The Market Process Prevails 201

Chapter Eight: HOMEOSTASIS
Seeking Balance in the Midst of Distortion 203

The Teleology of the Market 205

The Yellowstone Effect 207

Lessons from the Distorted Forest 209

Market Cybernetics 213

How Things "Go Right" 216

Spontaneous Order 217

Distortion 219

The Sand Pile Effect 220

Distortion’s Message: "Do Nothing" 222

The Shi of Capital 223

Chapter Nine: AUSTRIAN INVESTING I: THE EAGLE AND THE SWAN
Exploiting Distortion with Misesian Tools 227

Homeostasis en force 229

Witness to the Distortion 231

An Initial Misesian Investment Strategy 236

The Eagle and the Swan 240

Case Study: Prototypical Tail Hedging 244

The Ziel and the Zweck: Central Bank Hedging 248

The Roundabout Investor 251

Chapter Ten: AUSTRIAN INVESTING II: SIEGFRIED
Exploiting the Böhm-Bawerkian Roundabout 253

Siegfried, the Dragon Slayer 255

Case Study: Buying the Siegfrieds 263

Value Investing: Austrian Investing’s Estranged Heir 269

A Zweck Finally Attained 275

Epilogue: THE SISU OF THE BOREAL FOREST 277

The World Learns Sisu from the Victorious Finns 278

Sisu—Of Character and Character-Building 284

Notes 293

Acknowledgments 309

About the Author 311

Index 313

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Sort by: Showing 1 Customer Reviews
  • Anonymous

    Posted October 7, 2013

    Great Book

    An excellent read, gives you a different perspective on things in the economy(s)

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