27 Books Like Once in Golconda

This fascinating read tells the story of the rise and then spectacular fall of the once celebrated hedge fund Long-Term Capital Management.

What made LTCM so attractive to Wall Street investors was its stable of "dream team" quants and financial minds, led by the laconic John Merriweather. Merriweather (featured in the opening Chapter of Liar's Poker) was a former Solomon Brothers bond-trading guru, who after leaving the firm amid a scandal managed to assemble a team of financial powerhouses that included two Nobel Laureates as well as a cadre of respected traders.

From 1993 to 1997 LTCM's returns were first-rate; the sky seemed the limit for this small band of supertraders, professors, and modelers who arrogantly considered themselves a cut above the rest of The Street.

But in 1998, it all came crashing down...and right quick. Having believed their financial models could accurately predict price action not just in… show more.

This is the story of four (European and American) central bankers fighting the dramas and crises during the lead-up to the Great Depression. When crisis looms, Bank of England Governor Montagu Norman puts on a disguise and boards a cruise ship to consult with his friend Benjamin Strong in New York. If only financial crises could still be fought that way today! I liked it because I used to be a central bank governor myself!

A classic account of an extraordinary 18th-century British financial and political scandal. The South Sea Bubble centred on the joint-stock South Sea Company, which was founded in 1711. The South Sea Bubble was an ambitious scheme to simultaneously pay off the British government's enormous debts while simultaneously getting rich in London's newly created stock market. The company was given a monopoly of trade with South America but had little prospect of success. The Bubble was an early Ponzi scheme that promised vast returns to early and well-connected investors.

Its collapse in 1720 ruined thousands of shareholders from all walks of life, many of whom had bought their shares on credit, and caused huge problems to banks and goldsmiths unable to collect the loans they had made to speculators to purchase stock. A public uproar ensued and the subsequent investigation revealed widespread fraud by insiders and corruption in the Cabinet.

A gripping portrait of a Dickensian financial scandal that led to the last English bank run before the run on Northern Rock in 2007. Founded in 1800 and controlled by Quakers, the firm that was to become Overend and Gurney grew to become London’s leading discount house, specialising in the safe business of discounting bills of exchange. In the 1850s, it became more aggressive and was eventually investing depositors’ funds in highly speculative ventures that promised spectacular profits that never materialised. When market conditions became adverse, Overend and Gurney found itself in dire straits. The Bank of England refused to bail it out and Overend and Gurney was run out of business in 1866. Its failure led to a major financial crisis, the ruin of many investors, and the directors being put on trial in the Old Bailey for fraud.

It may seem odd to apply the word “thrilling” to an account of price movements through history. But for me, this book was one exciting “Aha!” moment after another. Fischer is a wonderful, whimsical writer, but he is also a brilliant historian who sees how the rhythms of the human economy – buying, selling, saving, spending – shape both the future and our understanding of the past. A truly surprising, brilliant book!  

Perhaps no academic theory has had a more pernicious impact on how we understand and regulate the markets than the “rational market hypothesis” – the theory that “markets know best” and work best if left alone. Justin Fox explains the rise, the rule, and the ruin of this powerful but fundamentally flawed idea in a remarkably engaging way. A delight to read!

I started working at Depository Trust Company in New York in September 1987 – a month later the “Black Monday” stock market crash happened! At the time, it was very difficult to see exactly what caused it. “When you are up to your neck in alligators, it is hard to remember why you drained the swamp!” This book explains how Wall Street banks hatched all those alligator eggs by hiring MIT math-whizz-kids and turning them loose without explaining the simplest thing about the stock market to them. One of the errors in their models was that they did not take bank holidays into account when calculating the time value of stocks and option prices.

There should be at least one book about the 1920s on this list, and this one deserves mention because it elegantly brings to life several of the most interesting characters from that era. There are some dubious ones, such as Jesse Livermore, the “Boy Plunger” who operated bucket shops, shady financial firms that manipulated stocks with fake news. And there are more legitimate leaders of the era: Pierpont Morgan’s son, Jack, and his brainier partner, Tom Lamont, and the power brokers of Kuhn Loeb. Brooks vividly skewers all of them. He misspelled “Golkonda,” but the essence of his story nails the excesses of the era, and is an apt reminder of how much wealth and economic inequality can result from the Federal Reserve going wild with loose monetary policy.

Over 100 years ago, a stockbroker wondered why his clients lost money over a full cycle in the stock market. After all, if stocks were back to where they started, shouldn’t they have broken even? He found that at bottoms, investors were cautious short-term traders, whereas at tops, they were confident long-term owners.

This little booklet is available inexpensively on Amazon.

Wolf of Wall Street author Jordan Belfort and I shared more than a few things in common. First off, we were both using the telephone for illegal purposes: me to con executives and gatekeepers to reveal corporate secrets; Belfort to defraud mom-and-pop investors to the tune of $200 million or so. And we both spent time in Beverly Hills: me while playing a desk clerk in a couple of episodes of Melrose Place; Belfort while living there after his pump-and-dump outfit Stratton Oakmont was shut down. Belfort’s Midas-gone-rogue story is chock full of sex, drugs, and sinking ships, and The Godfather of con stories.