Narrates the spectacular rise and fall of Long Term Capital Management, 1993-98. The disgraced John Merriwether assembled former Salmon traders, leading academics, and investment capital into a quantitative, secretive hedge fund. Relying on models to reduce anticipable risk, leverage to magnify gains, and bravado to minimize trading costs, LTCM initially did so well as to return client funds, in order to trade entirely for its own benefit. The Russian default of 1998 exposed excessive faith in (low) probability of risk, and concentration of risk inherent in leverage, sending the firm spiraling toward bankruptcy. Because LTCM traded many bespoke instruments, many of Wall Street’s blue-chip firms were implicated as counterparties, threatening system malfunction. The Federal Reserve orchestrated a fraught bailout. Mostly brisk and dramatically told.
Investing
11. Kaplan, Silicon Boys (17 Jul 2018)
A brisk, sometimes adoring treatment of the tech industry’s rise, circa 1970-2000. Kaplan often traverses the boundary running along technological vision and advancement and business gain and rapacity. Venture investors such as John Doerr receive individualized treatment to rival regulars such as Robert Noyce, Bill Gates, or Steve Jobs. There’s also a useful treatment of the Microsoft antitrust case. But although well researched and written, the book fails to address why so many talented people have dedicated their careers to the field.