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Devil Take the Hindmost: A History of Financial Speculation

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A lively, original, and challenging history of stock market speculation from the 17th century to present day. Is your investment in that new Internet stock a sign of stock market savvy or an act of peculiarly American speculative folly? How has the psychology of investing changed--and not changed--over the last five hundred years? In Devil Take the Hindmost, Edward Chancell A lively, original, and challenging history of stock market speculation from the 17th century to present day. Is your investment in that new Internet stock a sign of stock market savvy or an act of peculiarly American speculative folly? How has the psychology of investing changed--and not changed--over the last five hundred years? In Devil Take the Hindmost, Edward Chancellor traces the origins of the speculative spirit back to ancient Rome and chronicles its revival in the modern world: from the tulip scandal of 1630s Holland, to "stockjobbing" in London's Exchange Alley, to the infamous South Sea Bubble of 1720, which prompted Sir Isaac Newton to comment, "I can calculate the motion of heavenly bodies, but not the madness of people." Here are brokers underwriting risks that included highway robbery and the "assurance of female chastity"; credit notes and lottery tickets circulating as money; wise and unwise investors from Alexander Pope and Benjamin Disraeli to Ivan Boesky and Hillary Rodham Clinton. From the Gilded Age to the Roaring Twenties, from the nineteenth century railway mania to the crash of 1929, from junk bonds and the Japanese bubble economy to the day-traders of the Information Era, Devil Take the Hindmost tells a fascinating story of human dreams and folly through the ages.


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A lively, original, and challenging history of stock market speculation from the 17th century to present day. Is your investment in that new Internet stock a sign of stock market savvy or an act of peculiarly American speculative folly? How has the psychology of investing changed--and not changed--over the last five hundred years? In Devil Take the Hindmost, Edward Chancell A lively, original, and challenging history of stock market speculation from the 17th century to present day. Is your investment in that new Internet stock a sign of stock market savvy or an act of peculiarly American speculative folly? How has the psychology of investing changed--and not changed--over the last five hundred years? In Devil Take the Hindmost, Edward Chancellor traces the origins of the speculative spirit back to ancient Rome and chronicles its revival in the modern world: from the tulip scandal of 1630s Holland, to "stockjobbing" in London's Exchange Alley, to the infamous South Sea Bubble of 1720, which prompted Sir Isaac Newton to comment, "I can calculate the motion of heavenly bodies, but not the madness of people." Here are brokers underwriting risks that included highway robbery and the "assurance of female chastity"; credit notes and lottery tickets circulating as money; wise and unwise investors from Alexander Pope and Benjamin Disraeli to Ivan Boesky and Hillary Rodham Clinton. From the Gilded Age to the Roaring Twenties, from the nineteenth century railway mania to the crash of 1929, from junk bonds and the Japanese bubble economy to the day-traders of the Information Era, Devil Take the Hindmost tells a fascinating story of human dreams and folly through the ages.

30 review for Devil Take the Hindmost: A History of Financial Speculation

  1. 5 out of 5

    Dmytro

    Great mix on history of financial markets, psychology of speculation and biggest bubbles of all times. Three main lessons for me: - roots, motives and patterns for excessive speculation were always same, from Ancient Rome until today - If it's too good to be true- it's a bubble (unfortunately, desire for more wins against logic) - British and American industrial revolution, technological discoveries and creation of big companies were accompanied by large-scale scams, fraud, insider trading, corrupt Great mix on history of financial markets, psychology of speculation and biggest bubbles of all times. Three main lessons for me: - roots, motives and patterns for excessive speculation were always same, from Ancient Rome until today - If it's too good to be true- it's a bubble (unfortunately, desire for more wins against logic) - British and American industrial revolution, technological discoveries and creation of big companies were accompanied by large-scale scams, fraud, insider trading, corruption. Knew about this but was astonished by the scale and mass of those manipulations! Overall a very interesting read. Written in 1998, seems like not too many people have read it before 2000 technology bubble or 2008 crash....;)

  2. 4 out of 5

    Michele

    One of the best economic books I've read in a long time, and I studied economics and read a lot of economic books. A compelling and balanced view of financial speculation that leads to the reasonable conclusion that the overextension of credit is the cause of financial instability. A must read. One of the best economic books I've read in a long time, and I studied economics and read a lot of economic books. A compelling and balanced view of financial speculation that leads to the reasonable conclusion that the overextension of credit is the cause of financial instability. A must read.

  3. 5 out of 5

    Rushi

    This review has been hidden because it contains spoilers. To view it, click here. Very poorly written and designed book. It is one of the few books I have picked up and have decided not to power through and finish. The author doesn't provide relevant information that is useful to the context of each chapter. He goes on and on about random things at the worst times. His writing attempts to be engaging but does a very poor job and feels like a drag to get through. He uses significant unnecessary footnotes and asterisks that destroy the flow of the book. On top of that, he name Very poorly written and designed book. It is one of the few books I have picked up and have decided not to power through and finish. The author doesn't provide relevant information that is useful to the context of each chapter. He goes on and on about random things at the worst times. His writing attempts to be engaging but does a very poor job and feels like a drag to get through. He uses significant unnecessary footnotes and asterisks that destroy the flow of the book. On top of that, he name drops irrelevant people in financial history in an attempt to make the book more anecdotally sound, but does so in way that makes you feel like he doesn't know anything about history except what's in the journal entries of some obscure witness to a stock frenzy from way back in the day. If the author reduced this book in size by half, it would be rated more highly...but instead has chosen to abide by the idea that more pages means a better book. That is not the case. This book will not give you a history lesson about speculation that you can use in your own pursuits or as a basis for an intelligent conversation with friends or colleagues. I am thoroughly disappointed in this book.

  4. 5 out of 5

    Alex Hood

    I enjoyed this book. Insightful. I spent lunch with Chancellor when he was at GMO (2010 or 2011). A pompous fellow, who like to hear himself talk. Was predicting the collapse of China.

  5. 4 out of 5

    Noah Goats

    This history of financial speculation is an interesting look at one of the many negative aspects of human nature. We are a species of gamblers, and speculating in the stock market allows us to gamble while fooling ourselves into thinking that we are contributing something to the economy. Chancellor shows how we seem to be unable to stop or even recognize reckless speculation for what it is despite the clear pattern established by history: a new technology or financial instrument (or a combo of b This history of financial speculation is an interesting look at one of the many negative aspects of human nature. We are a species of gamblers, and speculating in the stock market allows us to gamble while fooling ourselves into thinking that we are contributing something to the economy. Chancellor shows how we seem to be unable to stop or even recognize reckless speculation for what it is despite the clear pattern established by history: a new technology or financial instrument (or a combo of both) provides a somewhat legitimate reason to be bullish, then things get out of control and the exciting new investment opportunity (railroads, tulips, radios, whatever) becomes grossly overinflated, inexperienced suckers decide they want in on the easy money, cognitive dissonance sets in and negative information is ignored, at some point most people can see that it’s a dishonest scam but they hope to make their money and let the “devil take the hindmost.” Finally, the bubble bursts, and a large group of angry people find themselves ruined. This book was written before the bursting of the dot-com and housing market bubbles, but they followed the same pattern: from hope to greed to irrational exuberance to fear to despair. You should read this and maybe you’ll recognize the next bubble before it bursts (or maybe you’ll find a way to make money and leave everyone else holding the bag).

  6. 5 out of 5

    Raghu

    In some sense, this book is more about the great human failings of Greed, 'Follow the Leader' mentality, Fear and Panic - all told through examples from the history of the stock market. To read it as a book on Speculation alone would be missing the point to some extent. The author sums up his own book in a couple of salient quotes: "Speculation is the name given to a failed investment and...investment is the name given to a successful speculation" "When I was young, people called me a gambler. As t In some sense, this book is more about the great human failings of Greed, 'Follow the Leader' mentality, Fear and Panic - all told through examples from the history of the stock market. To read it as a book on Speculation alone would be missing the point to some extent. The author sums up his own book in a couple of salient quotes: "Speculation is the name given to a failed investment and...investment is the name given to a successful speculation" "When I was young, people called me a gambler. As the scale of my operations increased, I was called a Speculator. Now I am called a banker. But I have been doing the same all along" - Sir Ernest Cassell, banker to King Edward VII." In short, the book is a history of the various 'bubbles' and their bursts in history from Roman times to 1998. It covers in detail the (1) the Dutch Tulip Mania of 1637 (2) the British South Sea Bubble of 1720 (3) the U.S. bull market of the 1920s and the Great Depression (4) the U.S. bull market of the 1980s (5) the Japanese Bubble of the 1980s and its demise in the 90s. The story repeats in history following the same pattern. Initially, Greed drives the stock prices high due to some perceived 'new era' as a result of some breakthrough technology, then the 'herd mentality' takes over by everyone following up so as not to miss a 'lifetime opportunity', then Fear takes over as stock prices reach an unsustainable and unjustifiable 'high', finally Panic setting in and stocks are dumped with a rapidity as to bring on a crash. The author hints at Speculators as the culprit and the need for regulation. But it looks to me that his own book shows that it is endemic to the Free market system because of the above mentioned fundamental human failings. No amount of regulation will be able to stop Speculation. Instead, we have to just learn to overcome our twin traits of Greed and 'follow the leader' mentality. Prof. J.K. Galbraith had written perceptively about it decades ago in his book on 'Money'. He said that the next wave of speculation always happens when all the effects of the previous bout of speculation fades in popular memory. There is no point in blaming the Regulating authorities. If they intervene when the market is in a boom, everyone will pillory them for hurting growth and stifling the resulting prosperity. If they act after the crash, they will be blamed for 'sleeping on their jobs' and not acting sufficiently in time. However, Galbraith suggested that new regulators can step in every few years and bring on new rules so that speculators do not have enough time to exploit the previous set of rules and bring on a crash. But, I think even this is not feasible because often we find that the bureaucracy, Congress, Senate and the Administration filled by ex-Wall Street honchos. So, it is not in their interest to rein in Wall Street. Saying that we need a fundamental uprooting of the System would make one run the risk of being dubbed a 'communist'! So, Speculation is here to stay and we better learn to live with it. The book is not a fast paced read. There are voluminous footnotes which distract the reader. Anyone who has read Kindleberger's 'Manias, Panics and Crashes' would find very little new material here.

  7. 5 out of 5

    Jim Rossi

    Very solid, entertaining, and incisive history of financial crises, kind of a more narrative version of Kindlebeger's Manias, Panics & Crashes. I read both as part of my history studies in grad school, and for my first book, "The Case of the Cleantech Con Artist: A True Vegas Tale." Very solid, entertaining, and incisive history of financial crises, kind of a more narrative version of Kindlebeger's Manias, Panics & Crashes. I read both as part of my history studies in grad school, and for my first book, "The Case of the Cleantech Con Artist: A True Vegas Tale."

  8. 5 out of 5

    George Jankovic

    Great book on financial speculations from the olden days through today.

  9. 5 out of 5

    Ram Kaushik

    An impressive piece of scholarship, covering the history of financial bubbles through the ages. The author covers the speculative periods ranging from the Tulip mania of the 1600's, the South Sea bubble of the 1700's all the way till the Internet bubbles of the 1990's. The author's research is incredible, as the voluminous footnotes attest. However, it almost feels overwhelming. Each of these financial bubbles is easily worth a book, and to strike a balance that is a broad sweep while still prov An impressive piece of scholarship, covering the history of financial bubbles through the ages. The author covers the speculative periods ranging from the Tulip mania of the 1600's, the South Sea bubble of the 1700's all the way till the Internet bubbles of the 1990's. The author's research is incredible, as the voluminous footnotes attest. However, it almost feels overwhelming. Each of these financial bubbles is easily worth a book, and to strike a balance that is a broad sweep while still providing some detail is a difficult task. I'd say the author errs on the side of too much detail, and drowns the reader in some cases. Also, the intricacies of the financial arrangements behind these bubbles - derivatives, options, notes etc. - were way beyond my knowledge, and I suspect beyond most other readers too. Still, a worthwhile read if you want to learn about the crazy financial periods through history - with each era claiming "this time, its different."

  10. 5 out of 5

    Mattia

    Extremely interesting! I still don't understand derivatives... The content itself was fascinating, but I did find the book hard to read at times. The stories were great, I was probably just getting lost with some of the numbers because of listening to the audiobook version. Extremely interesting! I still don't understand derivatives... The content itself was fascinating, but I did find the book hard to read at times. The stories were great, I was probably just getting lost with some of the numbers because of listening to the audiobook version.

  11. 4 out of 5

    Jonathan Birnbaum

    Phenomenal journey through the history of speculative frenzies, including 17th century tulips, 18th century South Sea craze, 20th century roaring 20s or Japan in the 80s, up to the dotcom era. The scrupulous reader will note common themes across the manias: -markets are driven by greed and fomo, no concept of 'margin of safety' -people across different cultures and centuries engaged in the same ol game -participants hail from all walks even hundreds of years ago, especially women -technology that Phenomenal journey through the history of speculative frenzies, including 17th century tulips, 18th century South Sea craze, 20th century roaring 20s or Japan in the 80s, up to the dotcom era. The scrupulous reader will note common themes across the manias: -markets are driven by greed and fomo, no concept of 'margin of safety' -people across different cultures and centuries engaged in the same ol game -participants hail from all walks even hundreds of years ago, especially women -technology that has enabled greater participation has resulted in greater participation -Chancellor would indubitably be writing about Robinhooders posting FinToks on how easy momentum investing is Docking this one star for being a little too all over the place, would have loved to see greater thmetic connections / frameworking. Must read for those who desire an enlightened understanding of markets.

  12. 5 out of 5

    Matt

    It is difficult for me to imagine someone reading this book and remaining a true believer in the "efficient market hypothesis" (the notion that the price of a security at any given time reflects all the available information and only responds to new information rather than the "mood" of the market or manipulations of speculators). That markets are beneficial and usually clear, sure, but Chancellor, an ex-banker, gives many examples of ways in which irrationality, group madness, and outright mani It is difficult for me to imagine someone reading this book and remaining a true believer in the "efficient market hypothesis" (the notion that the price of a security at any given time reflects all the available information and only responds to new information rather than the "mood" of the market or manipulations of speculators). That markets are beneficial and usually clear, sure, but Chancellor, an ex-banker, gives many examples of ways in which irrationality, group madness, and outright manipulation undermine the price mechanism and lead to financial bubbles, often with disastrous consequences. The most clever part of the book is the introduction. The author links the madness of financial speculation to Bakhtin's notion of the carnivalesque, pointing out that in the middle ages, it was during fairs and carnivals that laws barring financial speculation were suspended. And, as in carnivals, binges of financial speculation demand a symbolic victim such as Mike Milken or Bernie Madoff. The arguments in the book are only bolstered by the fact that it was written in 1999 and he mentions credit default swaps and mortgage-backed securities as the possible instruments of a future bubble and crisis. My only complaint is that the descriptions of the events can be a bit repetitive, even if they are well written. I particularly enjoyed the chapter on Japan in the late 80s and early 90s. Those looking for practical policy solutions will be disappointed. He seems to view financial speculation as a necessary evil that regulation can do little to stop. He isn't opposed to financial regulation, merely resigned to the fact that it will be an ongoing game of whack-a-mole. This strikes me as a more realistic assessment than those offered by free marked ideologues or quasi-messianic market regulators.

  13. 5 out of 5

    Viktor Nilsson

    I picked up this book because I'm interested in everything that concerns investing and speculation. While there's always a plethora of writings on current events and the latest thing, very few stand the test of time, and so I like reading from an historic perspective. This book turned out to fit well into the history category - if you're looking for advanced financial analysis you won't find it here, although the author clearly knows what he's talking about. What makes this book so good is the wa I picked up this book because I'm interested in everything that concerns investing and speculation. While there's always a plethora of writings on current events and the latest thing, very few stand the test of time, and so I like reading from an historic perspective. This book turned out to fit well into the history category - if you're looking for advanced financial analysis you won't find it here, although the author clearly knows what he's talking about. What makes this book so good is the way it explains financial history, mainly through anecdotes. For someone who doesn't like reading fiction, this is the kind of book that still can provide a truly enjoyable read. Even better, Chancellor makes sure to get his facts right, and I'm quite impressed at the work he has gone through to find all the stories and facts. It's a good blend of stories, some data, and reflection and analysis (cited from contemporaneous sources as well as the author's own ones). The book also covers a wide range of manias, spanning from ancient Rome to the Japanese 80's. Chancellor also adds some interesting conclusions on what many bubbles seem to have in common and what thus can set them off in the first place. Well worth a read for anyone interested in investing and history.

  14. 4 out of 5

    Sy. C

    Good summary. Haven't read Kindleberger's "Manias, Panics and Crashes" so not able to compare which is the better book. Includes an overview (last chapter) of the Japanese 1980s real estate and stock market bubble. Good summary. Haven't read Kindleberger's "Manias, Panics and Crashes" so not able to compare which is the better book. Includes an overview (last chapter) of the Japanese 1980s real estate and stock market bubble.

  15. 5 out of 5

    Andy M

    The second part of the title itself might deter a lot of readers, but it's only a general hint about the book's contents. Chancellor's book brings to light many incidents that point to a pattern that seems to repeat. A scheming small group of investors starts a bubble, and later less knowledgable investors are lured in after them. The small original group eventually sells out, leaving the ignorant and over-optimistic latecomers holding an investment now worth far less than the price that they pa The second part of the title itself might deter a lot of readers, but it's only a general hint about the book's contents. Chancellor's book brings to light many incidents that point to a pattern that seems to repeat. A scheming small group of investors starts a bubble, and later less knowledgable investors are lured in after them. The small original group eventually sells out, leaving the ignorant and over-optimistic latecomers holding an investment now worth far less than the price that they paid for it. Yet there are more kinds of bubbles than merely the pumping and dumping of common stock. The book offers examples of these. There are some who will refuse to read this book after finding the first favorable quotation of Keynes, but they're depriving themselves of some interesting history.

  16. 4 out of 5

    Barry Bridges

    Chancellor explores bubbles from the Tulip to the Tech boom of the 90's. As I read this post great recession, I can see the looming derivatives bubble coming. I cannot help but wonder if anyone on Wall Street or in the banking business has ever read the book or even studied market bubbles. The patterns and indicators are the same, from the 1630's to the twenty-first century. Still, people throw their money, or better yet, borrow someone else's money to throw at every bubble that comes along. Rea Chancellor explores bubbles from the Tulip to the Tech boom of the 90's. As I read this post great recession, I can see the looming derivatives bubble coming. I cannot help but wonder if anyone on Wall Street or in the banking business has ever read the book or even studied market bubbles. The patterns and indicators are the same, from the 1630's to the twenty-first century. Still, people throw their money, or better yet, borrow someone else's money to throw at every bubble that comes along. Read it. Wise up. Chancellor is readable, not tedious in any way. The bubble stories remain interesting as he dishes on the ship of fools that fuel and participate in each.

  17. 5 out of 5

    Adrian

    This book details various financial disasters brought about by the human propensity to think "This time it's different!" Since the formation of modern capitalist economies starting in the Netherlands in the 1600s we've experienced a series of spectacular economic crashes brought about by hubris, greed and stupidity. It's hard to tell whether what is happening to our economy today is tragedy or farce when it is simply the latest in a long line of examples of how humans never learn their lesson. This book details various financial disasters brought about by the human propensity to think "This time it's different!" Since the formation of modern capitalist economies starting in the Netherlands in the 1600s we've experienced a series of spectacular economic crashes brought about by hubris, greed and stupidity. It's hard to tell whether what is happening to our economy today is tragedy or farce when it is simply the latest in a long line of examples of how humans never learn their lesson.

  18. 4 out of 5

    Max

    A comprehensive, and fairly dense, history of financial speculation. Seems the author assumes the reader has a pretty strong grasp of fundamental investing concepts, so that can make the text hard to follow or fully understand at times. Ultimately it's quite an interesting and illuminating history of speculative manias and crises. Spoiler alert: corrupt, venal politicians and government officials are involved with just about all of them. A comprehensive, and fairly dense, history of financial speculation. Seems the author assumes the reader has a pretty strong grasp of fundamental investing concepts, so that can make the text hard to follow or fully understand at times. Ultimately it's quite an interesting and illuminating history of speculative manias and crises. Spoiler alert: corrupt, venal politicians and government officials are involved with just about all of them.

  19. 5 out of 5

    Tyler

    I thought this was a great book. Mr. Chancellor did some excellent research and tied it all together very nicely while bringing it all back to the basic theme that humans have always had great propensity for greed and foolishness.

  20. 5 out of 5

    Samuel Gruen

    Interesting overview of the history of speculation yet sometimes quite dry and repetitive in form and substance, possibly due to the recurring nature of booms, euphoria and panics.

  21. 5 out of 5

    Jacob Williams

    Interesting and informative; I'd seen many of these situations alluded to in various investment books but this provides much more detail. Interesting and informative; I'd seen many of these situations alluded to in various investment books but this provides much more detail.

  22. 5 out of 5

    Evan

    I read this book after listening to an episode of Jesse Felder's podcast where he interviewed Grant Williams. Grant Williams is one of the founders of Real Vision (the netflix of financial TV) and he said "Devil Take the Hindmost" inspired him. Unfortunately, I decided to read this book after such a recommendation. I love the subject matter. In fact, I've listened to multiple Grant William's podcasts where he has described episodes from the book (e.g., John Law) in more detail and loved it. Chanc I read this book after listening to an episode of Jesse Felder's podcast where he interviewed Grant Williams. Grant Williams is one of the founders of Real Vision (the netflix of financial TV) and he said "Devil Take the Hindmost" inspired him. Unfortunately, I decided to read this book after such a recommendation. I love the subject matter. In fact, I've listened to multiple Grant William's podcasts where he has described episodes from the book (e.g., John Law) in more detail and loved it. Chancellor's writing style is probably the worst I've ever read. I read a lot. If it is a chore for me to read, it means the author wrote poorly. Once I realized the poor writing style was too blame for my headaches after 20 minutes of reading, I started self-editing the passages. For example, in one sentence I removed two prepositional phrases and made the sentence have active voice. I thought, why didn't his editor do this... The stories could have been good if not written so poorly. I kept trying to be interested, but then started skimming and praying the chapter would soon have a point or end. It reminds me of the time I tried to hike the Grand Canyon without eating. Around mile 12 (on the way up from the river), I found it extremely difficult to keep the same thought for more than 20 seconds. After 20 seconds, I found myself restarting the exact same thought. By mile 13, I was shaking slightly and decided it was time to eat a granola bar. Similarly, I found myself trying to get into what Chancellor was writing, only to find myself skimming as fast as I could 20 seconds later. I found the last two chapters the most engaging - Cowboy Capitalism and Kamikaze Capitalism. In Cowboy Capitalism, Chancellor argues that Reagan's deregulation led to all the excess of the 1980s and spread of the derivatives in the 1990s. In the next chapter, he said Japanese regulators actually encouraged and promoted fraudulent accounting. Maybe, during the time period (1980s), regulation or deregulation didn't matter as much as greed... I also appreciated his attention to detail. Such as on page 249: "When Procter & Gamble sued Bankers Trust to recover derivatives losses of $102 million incurred in 1994, it produced a recorded transcript of a Bankers Trust derivatives salesman stating that he aimed to "lure people into the calm and then just totally fuck'em."" Overall, not worth reading because the writing style is so poor. It's unfortunate, lots of gems, but too rough.

  23. 4 out of 5

    Dennis Littrell

    Anticipates the pricking of the Internet bubble This is a sobering tome published at exactly the right time. Unfortunately I was too busy salivating at the prospects of quadruple-figure appreciation when I bought Priceline.com at $104 to read it when it came out last year. Now reading it makes for a nice penitence as I contemplate the error of my financial ways while filling out forms for a second mortgage on the ranch. Just joking. Actually this is a readable and entertaining account from Roman t Anticipates the pricking of the Internet bubble This is a sobering tome published at exactly the right time. Unfortunately I was too busy salivating at the prospects of quadruple-figure appreciation when I bought Priceline.com at $104 to read it when it came out last year. Now reading it makes for a nice penitence as I contemplate the error of my financial ways while filling out forms for a second mortgage on the ranch. Just joking. Actually this is a readable and entertaining account from Roman times to the modern hedge fund mania. The usual financial delusions are covered, the tulip mania, the South Sea bubble, the crashes of 1929 and 1987, etc. Chancellor does especially nice surgical work on the Japanese bubble economy of the eighties. The operative mechanism is at first GREED, an emotion that blinds investors, just as jealousy blinds the cuckolded or love the lover, into seeing delusion instead of reality, and persuades them to pay high prices for something of little or no value. Then, when it is seen that the emperor has no clothes, that dot.com megamegabucks has no earnings and isn't likely to have any--ever--the value of the trifle paid so dearly for, begins to fall. Now the emotion of FEAR takes hold. This also blinds the investor. The crash begins, the bubble bursts, and overly-margined plutocrats jump despondently out of the windows of high-storied buildings... Or shoot up brokerage houses with live bullets. Notice however that when Internet stocks went very far south of the Cape of Good Hope this last year, no bubble burst; rather the sector experienced the slow deflation characteristic of a tire going flat. This was mainly because the margin requirements at brokerage houses are now fifty percent instead of the ten percent that prevailed during the Roaring Twenties. Chancellor makes note of this and other differences that make bursting bubbles less painful perhaps, but no more unlikely since the fundamental human emotions underlying the mechanism that produces speculation have not changed. --Dennis Littrell, author of “The World Is Not as We Think It Is”

  24. 4 out of 5

    Stephen Lockett

    When you read the history of these speculative bubbles one after the other it throws light on the predictability of certain aspects of human nature and Gustav Le Bons Crowd observations (Chandler does mention Le Bon later in the his book) comes to mind. The earlier bubbles such as the Dutch Tulip, The South Sea amongst others are excellently written in my view and Chandler at times seems able to bring some of the main characters into very clear focus. When he moves over to the US the whole conce When you read the history of these speculative bubbles one after the other it throws light on the predictability of certain aspects of human nature and Gustav Le Bons Crowd observations (Chandler does mention Le Bon later in the his book) comes to mind. The earlier bubbles such as the Dutch Tulip, The South Sea amongst others are excellently written in my view and Chandler at times seems able to bring some of the main characters into very clear focus. When he moves over to the US the whole concept of speculation takes on an entirely new colossal dimension. Again characters are bought to life and if your saw some of the strokes they pulled sometimes against their own partners, companies and even family in a fiction show like Peaky Blinders you wouldn’t believe it. Chandler brings us up to date with Japan in the 1980s and the USA in the 1990s here things get sinister as Government agents, gangsters, stockbrokers, and larger than life rogues insatiable for wealth all join up on the inside. The book was written in the late 1990s and if you had read it back then you would clearly see another massive speculative collapse of some element of the financial system as inevitable and reading it now more than a decade after the 2008 financial crash its clear to see greed is an inherent part of human nature and when there are such colossal sums to be made everyone has their price.

  25. 5 out of 5

    Dao Le

    One of the best financial history books I've read - well-written, thoroughly-researched with a balanced and nuanced view on financial speculation, starting from the Exchange Alley in the 1690s all the way through the Japanese bubble economy in the 1980s (it's quite ironic that this book is written in 1998, only a year before the great tech bubble of 2000). The author dives deep into the psychology of speculation, claiming that it's not simply about greed: "the essence of speculation remains a Ut One of the best financial history books I've read - well-written, thoroughly-researched with a balanced and nuanced view on financial speculation, starting from the Exchange Alley in the 1690s all the way through the Japanese bubble economy in the 1980s (it's quite ironic that this book is written in 1998, only a year before the great tech bubble of 2000). The author dives deep into the psychology of speculation, claiming that it's not simply about greed: "the essence of speculation remains a Utopian yearning for freedom and equality which counterbalances the drab rationalistic materialism of the modern economic system with its inevitable inequalities of wealth." The historic recurrence of bubbles reveal several highly correlated external factors, including: (i) technological advances (financial innovation in the late 17th century and again in the 20th century, industrial revolution in the 18th and 19th); (ii) over-extension of credit (partly driven by lax regulation); and (iii) enabling political / economic backdrops (liberal economic ideology, Reganomics, Milken-led junk bond revolution, and most interestingly the Japanese "kamikaze" capitalism in the 80s). One thing worth remembering is that the word "speculator" in Latin describes a sentry whose job it was to "look out" (speculare) for trouble.

  26. 5 out of 5

    Ulio

    This book might not directly you improve as an investor or trader but it does give you good indicators and signs of a speculative bubble. It reminds me a lot of Niall Ferguson's the History of Money, if you've read that you probably have read through most of the periods of speculative bubbles. This is just a singular focus on bubbles and not the new inventions in money systems like Niall's book. I would recommend to not read the book if you are already someone who is extremely bearish because it This book might not directly you improve as an investor or trader but it does give you good indicators and signs of a speculative bubble. It reminds me a lot of Niall Ferguson's the History of Money, if you've read that you probably have read through most of the periods of speculative bubbles. This is just a singular focus on bubbles and not the new inventions in money systems like Niall's book. I would recommend to not read the book if you are already someone who is extremely bearish because it will probably skew your perspective even more. This book is best for investors/traders who are neutral and can take both bearish/bullish sides. You will learn a lot of the tells for speculative bubbles. Edward has really done his research, you won't find some of the stories of the bubble in any internet archives. The most interesting for me were the modern bubbles of Japan and Michael Milken's junk bond run. But the older bubblies like Mississipi Company and Tulip bubble were also interesting.

  27. 5 out of 5

    Alex

    Holy moly this book has a lot of information. The biggest reason I gave it three stars was because of the information vomit that is thrown at you. Chancellor mentions so many names throughout the book that it’s hard to keep up and remember who is who. Additionally, there can be a lot of more technical finance terms that aren’t well-defined. I majored in finance in college and had a hard time keeping up. With that being said, this is a financial speculation history book. There is a ton of history Holy moly this book has a lot of information. The biggest reason I gave it three stars was because of the information vomit that is thrown at you. Chancellor mentions so many names throughout the book that it’s hard to keep up and remember who is who. Additionally, there can be a lot of more technical finance terms that aren’t well-defined. I majored in finance in college and had a hard time keeping up. With that being said, this is a financial speculation history book. There is a ton of history about the stock markets going back to Tulip Mania in the 17th century. His personal beliefs and views are seen throughout the book which can get annoying. Overall, the content is really, really in-depth. But this can also make the material difficult to digest. 3/3.

  28. 5 out of 5

    Allen

    "The four most expensive words in the English language are 'this time it's different.'" Although this quote comes halfway through the book, it's pretty much the through-running theme. Each chapter covers a particular period of financial speculation ending in a big bust, from Tulipomania in 17th Century Holland, to the stock market excesses of Wall Street and Japan in the 1980's. And each and every time, "this time it's different" -- we're too smart now, or the systems have been made foolproof, e "The four most expensive words in the English language are 'this time it's different.'" Although this quote comes halfway through the book, it's pretty much the through-running theme. Each chapter covers a particular period of financial speculation ending in a big bust, from Tulipomania in 17th Century Holland, to the stock market excesses of Wall Street and Japan in the 1980's. And each and every time, "this time it's different" -- we're too smart now, or the systems have been made foolproof, etc., etc., and it always ends in the same financial collapse. It's well-written and a good read, with lots of material from contemporary sources to illustrate both the 'irrational exuberance' of the time, as well as the existence of the few Cassandras who saw where it was all going.

  29. 4 out of 5

    Fraser Sherman

    An excellent look at the great investing bubbles of history: Tulipmania, the South Sea Bubble, the Mississippi bubble, railroad bubbles in England and the U.S. (Chancellor points out that shiny new technology always prompts bubbles) and Japan's economic bubble of the 1980s (this came out too early for the dot.com bubble and 2007 real estate bubbles, but they fit the book perfectly). Despite the arguments of some economists that speculation is always rational because the market is perfectly ratio An excellent look at the great investing bubbles of history: Tulipmania, the South Sea Bubble, the Mississippi bubble, railroad bubbles in England and the U.S. (Chancellor points out that shiny new technology always prompts bubbles) and Japan's economic bubble of the 1980s (this came out too early for the dot.com bubble and 2007 real estate bubbles, but they fit the book perfectly). Despite the arguments of some economists that speculation is always rational because the market is perfectly rational, Chancellor argues that speculators (and markets) are anything but, and that the damaging effects they cause make it necessary to rein speculators in (though he admits most methods don't seem to work). If this is your kind of topic, I recommend the book.

  30. 5 out of 5

    Manuel

    As the saying goes, “History repeats itself because no one was listening the first time.” This book puts into perspective many considerations that we have about today's markets. Definitely recommended! The intro (e.g., tulip mania) is quite interesting, the middle is a bit of a drag sometimes but the final chapters on modern speculation are a breeze to read. Fascinating and premonitory stuff given that the book is from 1999 but it touches a lot of points that became crystal clear in the 2008 fina As the saying goes, “History repeats itself because no one was listening the first time.” This book puts into perspective many considerations that we have about today's markets. Definitely recommended! The intro (e.g., tulip mania) is quite interesting, the middle is a bit of a drag sometimes but the final chapters on modern speculation are a breeze to read. Fascinating and premonitory stuff given that the book is from 1999 but it touches a lot of points that became crystal clear in the 2008 financial crisis.

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