No. of Recommendations: 5
This is a cross-post from a new discussion forum I created and the last “sales pitch” I’ll make for it.

Who Should Read This Book?

The purpose of this forum is to discuss Bonds Now! Making Money in the New Fixed Income Landscape, by Marilyn Cohen and Chris Malburg. According to the “product description” at Amazon Books:

Bonds Now! offers rare insight into safely investing in fixed income vehicles while maintaining necessary liquidity and meeting yield targets. It doesn't waste a lot of time on the elementary basics, but instead, jumps right in and shows you how to build a safe bond portfolio designed to weather turbulent economic downturns.
* Discusses how to quickly analyze a bond as well as buy and sell them.
* Examines what it takes to build an impregnable fortress around your bond portfolio.
* Reveals how to develop a sixth sense for trouble and sell your bond position while there's still time.

The book was written after the 2008 credit crisis and largely in response to it. So the book is more timely than many of the other introductory bond books. Also, Cohen and Malburg’s book assumes you know the basics that most other bond books concern themselves with. In fact, Cohen and Malburg assume at least three things of their reader:

(1) You have been buying your own bonds for several years now.
(2) You made mistakes in constructing and managing your bond portfolio that the “credit-crisis” exposed for you.
(3) You are willing to do the work it is going to take to get your portfolio back on track.

In other words, contrary to the product blurb, this is not a quick-fix, one-minute, money-manager book. It is a detailed critique by a pair of professional bond managers of what most bond investors did wrong (themselves included) and how those problems might be fixed, so they don’t cause the same damage the next time.

So far, there have been very few reviews of the book, partly because the book was recently published (Dec, 2009), and partly because bond-investing is viewed by most investors as a boring and complicated backwater that is better avoided for sexier, better-yielding things like stocks, despite the fact that the bond market is five times bigger than the stock market in terms of capitalization and just as capable, on a risk-adjusted basis, of providing equal returns for one’s time, money, and effort.

Of the ten reviews at Amazon, eight give the book five stars; one, four stars, and one, one star. Of the six reviews at Barnes & Noble, five give it five stars, and one, one star. In other words, most reviewers rate the book highly, as do I. The book is far from perfect, but it is easily “best of class” for what it attempts to do, which is to provide seasoned, field-tested guidance to investors who are already buying their own bonds. That is the book’s targeted audience, and that is the audience that will most easily benefit from reading the book. If you a bond-beginner, someone has never bought your own bonds before, you will benefit from reading the book, but you might find it a bit overwhelming.

Unfortunately, the more elementary books can’t provide the experience you lack. They can explain basic concepts with admirable clarity. But they can’t provide the emotional conflicts, the constant tug of war between Fear and Greed, that can only be experienced when real money is on the line in real time. “The offer for the 6.4’s of ’16 is 48, min 5. Do you want to buy or not?” Until you been in the position, time and again, of being one mouse-click away from making a shrewd purchase that might return you 100% in a year’s time, or might lose you the same amount even faster, words on a page are just words on a page, disconnected from the risks and dangers of your choice.

What their book does admirably is provide readers with some of the background thinking, checking, and testing that needs to happen before you reach the point of making that buying decision and what you need to do once the decision is made and the bonds are in your account. That is the strength of the book, their advice on how to keep yourself out of trouble as you buy your bonds and as you manage your portfolio.

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