J. V. Bruni and Company
1528 North Tejon Street
Colorado Springs, Colorado 80907
(719) 575-9880 or (800) 748-3409
(Investing Category is Next)
J. V. Bruni and Company1528 North Tejon Street Colorado Springs, Colorado 80907 (719) 575-9880 or (800) 748-3409
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(Investing Category is Next) |
When Genius Failed,
by Roger Lowenstein.
 Meet the Tom Clancy of financial
journalists. This 2000 book mixes one part modern high finance with one
part hard-to-put-down thriller and comes up with a fascinating
description and analysis of the rise and fall of the ballyhooed Long
Term Capital Management hedge fund. With two high-powered economics
professors on board, this fund’s managers seemed to feel that higher
math represented the solution to the eternal quest for easy wealth.
However, as the reader will discover, mathematics is no more powerful
than the assumptions that underlie its usage. (Garbage in, garbage
out.) In the classroom, economists make convenient assumptions not
because they are always valid, but because they help illustrate
important points. However, in the competitive world of money
management, assumptions that aren’t valid in certain instances can lead
to dramatic failures. Indeed, this fund’s spectacular 1998 demise came
perilously close to upsetting the world’s financial system. The reader
of this book will see that there’s much more to
“risk arbitrage” than
effortlessly vacuuming up billions of nickels and dimes. If you think
economics and finance are boring, this book will quickly convince you
otherwise. |
“This book is story-telling journalism at its best.” The Economist |