Book cover "Euforia y Pánico" by Oriol Amat
Bubbles and crises are phenomena that have been repeated intermittently throughout history. In "Euphoria and Panic", Oriol Amat, makes a brief historical review and an analysis of the bubbles and cracks that we have experienced in recent centuries. It also analyzes the causes and consequences of the current crisis, and offers us a series of tips to take advantage of it.
Title: Euphoria and Panic. Learning from bubbles and other crises: From the tulip crash to the subprime.
Author: Oriol Amat
About the Author
Oriol Amat is one of the most prolific Spanish authors when it comes to financial disclosure. He is professor of Financial Economics and Accounting at the Pompeu Fabra University, President of ECIF, vice president of it happened and counselor of the CNMV. He is also a visiting professor at different European, American and Asian universities and business schools, which can be seen in his writing aimed at facilitating readers' understanding.
Analysis and opinion
The first part makes a brief review of some of the most important bubbles and crises that have been experienced during the last centuries, giving a special one to the Dutch tulip bubble of the 29th century, the bubble of the English South Sea Company of the XNUMXth century , the famous crash of XNUMX and the dotcom bubble. In this part of the book, he also analyzes the characteristics of bubbles from the point of view of the psychological profile of investors, an analysis that has been very interesting to me.
The second and third parts of the book explain the causes and consequences of the current crisis. This analysis is interesting, especially considering that it is done from the point of view of an economist in the year 2.008. The author, prudently and honestly, makes it clear that we must be cautious with the economists' forecasts, warning that “economists are almost always wrong" and that "the forecasts included should be viewed with great caution”. In his analysis of the causes of the crisis, the author is very successful, although he was wrong with the scope of the consequences, being too optimistic, as he made clear that it could happen. In this part we can also see in an analysis of the mistakes made by companies such as Marina D'Or, Hábitat or Martinsa, which invested at the top of the bubble, which would make them pay dearly for it.
The final chapter, the author gives us advice on how to take advantage of the opportunities offered by crises, which can come from areas such as real estate, business and investor. As for the investment field, Amat makes a short summary with investment advice in times of crisis, closely related to the philosophy of value investing. Perhaps this summary is somewhat brief, since the subject of the book does not focus on it, but they are useful and serve as a review for beginners.
Finally, the book has an annex that I have found the most interesting and educational part of the book, which talks about deception of investors through accounting makeup. As with the topic of investments, the author does not study this topic in depth, but it is a good introduction to an aspect that is highly recommended to master.
Entertaining, educational and easy to read. It combines lessons in history, economics, investment, and financial analysis, all of which are very beneficial. Sensibility, caution and honesty are three characteristics that must be present in any investor that are present in this book. It is not an essential book, but it is highly recommended.
Score: 8 / 10
Recommended for: All types of investors, although it can contribute less to investors with more advanced knowledge.