Convertible Securities: The Latest Instruments, Portfolio Strategies, and Valuation Analysis, Revised Edition

Upon reading this book I realized what I was missing from my portfolio. Investing in convertible over the past 3 years has enabled me to keep my head above water since the market peaked back in 2000. My portfolio was only down 4% in 2001 and 5% in 2002 because of the addition of converts.

Calamos begins by describing the convertible securities markets underpinnings, both historically and fundamentally. Then, the reader's understanding is developed through dissecting many common convertible securities' structures, when and why they came to market, and their benefits to investors, their issuers, and the investment bankers that brought them to market.To close, Calamos identifies the issues with investing in convertibles including those concerning: pricing, liquidity (retail vs. institutional), hedging strategies (when so desired by the investor), some discussion of portfolio mixes, and comparisons to major market and custom indices to demonstrate convertible security market performance.This book was a tremendous help as fundamental underpinning for my own education into convertible securities. The pricing models for the components of convertible securities were alone worth the purchase of the book. Comparing and contrasting the several convertible securities discussed also went a long way to understanding their drawbacks and strengths.Personally, I felt that the opportunity to expand the book further exists in a couple of areas. First, the convertible hedging strategies were my highest interest in obtaining the book, but I felt that they were left with a shorter than necessary analysis. Only one or two real-life examples were given, and the decision-making criteria of a hedging strategy vs. bond's (relative) price seemed to need more expanded discussion.Second, the descriptions of the marketplace for these securities was left only at a high-level. In defense of the marketplace description, it's clearly an institutional, dealer-driven market that would probably require another edition to describe that market's inner workings. Perhaps that's a worthy follow-up, Mr. Calamos. "The Mechanics of the Institutional Convertible Securities Markets"??BUY this book. Calamos' years of experience are clearly demonstrated within the chapters. This is not one of those meritless, sham investment books so often written solely to benefit the author. This is a quality educational tool and long-term reference.