The investments books are quite a genre in themselves. They are popular, they sell well and they are not very good, let alone useful. These books can be divided between the more "popular" ones, i.e. those advising how to become a millionaire in a year (or less), and the serious or academic ones (these tend to have a duller cover and no exclamation marks in their titles). The popular ones are terrible and a sad waste of paper.
"Expected returns..." belongs to the academic field to the T. It has a serious, almost professorial tone and its author has a mandatory long CV, clearly shown along the pages. However, these books are born with an original sin: no one that finds the key to "solid" investment will publish a book revealing it. Truth to be told, this is acknowledged in the introduction of this book, which is a good sign. But then, it also says that to be a good investor it is necessary to have good luck, which makes the book redundant.
My point? Writing a book about succeeding in the world of investment is like writing a book about football only to get to the conclusion that the key is to score more goals than the other adversary. These books are obvious and repetitious, they tell always the same examples (the Dutch tulips bubble, the 29 crash, the subprime crisis, etc) but they do not give the first indication on how to avert them. They are full of statistics and charts, and they use many strange (and Greek) words; they are very good prophets of the past. And then nothing else. Not one of them says that by merely replicating any index, an investor will earn 10% a year in the long term.
In the end, the key to investment has already been revealed by Warren Buffett, the best investor of all times (and incidentally not mentioned in this book), virtually every single year since 1977 in his now-famous letters to the Berkshire Hathaway shareholders. The key, according to the sage of Omaha is short and simple, and does not need MBAs: "buy shares when they're cheap".
Volumes have been written about the stock market and Nobel prizes have been given to those who endlessly theorize about it. Yet in the end, nothing beats the Buffett's assertion.
In conclusion. For those who deal with investments, this book will be mildly interesting - if that. For anyone else, do not bother.
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