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MBA in a Book

How the Markets Really Work

by Joel Kurtzman

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Several years ago, Joel Kurtzman was covering a meeting between a group of Russian economists and politicians and some of America’s best thinkers from business and academia. The Russians were trying to get a handle on exactly who was in charge of the markets and how long the founder of a failed start-up would be sentenced to jail.

It’s easy to see why Joel’s Russian friends were befuddled. But how many of us really understand how the markets work, despite the fact that we live and work in a society that practically worships "the market" as a religion? And when people today are investing more money in mutual funds than in banks, this can be a problem. The markets are big, complex, and completely unforgiving. If you make a major mistake, you risk losing a major amount of money. That’s why it’s vital to peel back the layers of mystery shrouding the markets.

In How the Markets Really Work, Joel Kurtzman provides a lucid explanation of one of the fundamental forces shaping our lives. In clear, accessible language, Kurtzman explains:

  • How markets, which are so vital to the world’s economies, are able to function without any central control
  • How they create wealth and spread the risk of the world’s most uncertain, but potentially lucrative, bets
  • How markets package and resell debt, connect financial institutions, and set prices
  • Why volatility has increased and what this means for the boom and bust of investing

    • Kurtzman illuminates the musty corners of the markets, showing how the system is both a single network linked together globally and a highly coordinated dance of free-wheeling, unchoreographed dancers that constitutes a massive social mechanism for laying off some of the world’s riskier bets. He explains the kinds of products that traders trade within the network (stocks, bonds, options, etc); how money circulates within the network; and how banks fit into the global network.

    This is a book that will help you think strategically about investing. If you understand the markets and the instruments and vehicles that are traded on those markets before thinking about individual stocks and mutual funds, you’ll be a smarter, savvier investor.