Investment-history

Shilling is worth reading - he thinks the west will experience 'good' rather than 'bad' deflation - but how deep will the Deflation be and how long will it last? He could have usefully studied natural resources in more depth; after all, this is where deflation hit hardest and earliest. I will read him again.

Reich graduated from Dartmouth and followed that with a law degree from Yale. Finally, he went to Oxford as a Rhodes scholar and studied economics. In addition to being the Secretary of Labor he was a professor at Harvard and is now one at Brandeis.

As for the title the reviewer seems to dislike, Adam Smith's book was "Wealth of Nations." Modern economic theory accepts that work is the basis of wealth. Marx promoted that idea and Reich is using it in a word paly on the title of Adam Smith's work. What of it?

The book is mildly thought provoking and written for ease of reading. If work and labor are the basis of our economic wealth and health as a nation, hadn't we keep our eye on the education required to turn out the workers of tomorrow?

It's solid four but not a five.

One reason I read only books I have bought (so that I may liberally mark them up) and tend to never discard a book, which is becoming a real problem in my basement, is because current reading will often lead one back to some gems and to a reestimation of earlier readings. Robert B. Reich's "The Work of Nations: Preparing Ourselves for 21st Century Capitalism" can be read with renewed appreciation and respect if one if also now reading William Greider's "The Soul of Capitalism: Opening Paths to a Moral Economy" or any of the books by Herman E. Daly (e.g. "Ecological Economics: Principles and Applications").

I read Reich's "Locked in the Cabinet", but this book remains a better gauge of his value to America, and I do hope we get a chance to hear from him again. If you have not read this book, it is a real bargain as a used book and you should buy it--Reich will remain relevant for decades to come.

For example,in this book on one page, the author delicately describes (on the morning of 9/11/01) the weather conditions,trucks honking, cabbies swerving, and deliverymen on frenetic sidewalks in Manhattan; and on the next page he describes an annual international investor conference held by the Carlyle Group the same morning at the Ritz-Carlton Hotel in Washington, D.C.,which was attended by Shafiq bin Laden, Osama bin Laden's estranged half-brother and former President George Bush Sr.

The investigative effort of the author in compiling this book must have been truly challenging.

In this book, Dan Briody lays down the history of The Carlyle Group and its all-star lineup (Iran-Contra era big-shots like Bush Sr., James A. Baker, Frank Carlucci, et. al) from their first scammy tax deals to their watching the September 11 attacks with Osama Bin Laden's brother!

This need-to-know information must be seen by all before the November elections, so read the book and decide for yourself, then get the word out!

Leeson was a bad trader, good liar and compulsive gambler. A bad mix. Add to that profit hungry executives who fed Leeson's addiction with Baring's entire capital stock, and you end up with a busted bank. When he's finally caught, a prison mate tells Nick, "It was a mercy killing. If you hadn't done it someone else would've." Capitalism, for good or ill, is wonderfully efficient at transferring wealth from weak hands to the strong. The surprise is not that the 232-year old Barings went bust overnight, but rather, that it lasted so long in such incompetent hands. There are those among the British elite who flourish only because the Establishment takes care of its own, even the idiot cousins. Barings had more than its share of these.

The real tragedy of this story is not the wrecking of Barings, but the wrecking of Lisa Leeson who, by all accounts, was an angel. Everyone else got what they deserved, but she was truly the innocent bystander caught in the crossfire.

p.s. As a trader, I still would like to quote something from the book for my fellows' reference:-

1. Page 60: What Soros understood better than most were the cause and effect relationships in the world's economies. If A happened, that B must follow, then C after that.

2. Page 83: The stock market is always wrong, so that if you copy everybody else on Wall Street, you're doomed to do poorly.

3. Page 85: In 1979, Soros renamed his fund...Quantum Fund, in tribute to Heisenberg's uncertainty principle in quantum mechanics. That principle asserts that it is impossible to predict the behavior of subatomic particples in quantum mechanics, an idea that meshed with Soros's conviction that markets were always in a state of uncertainty and flux that it was possible to make money by discounting the obvious, and betting on the unexpected.

4. Page 92: Soros always says that you shouldnt be in the market unless you are willing to take the pain.

5. Page 110: Short term volatility is greatest at turning points and diminishes as a trend becomes established.

6. Page 159: It is not whether you are right or wrong, but how much money you make when you are right and how much money you lose when you are wrong....If you have tremendous conviction on a trade you have to go for the jugular.It takes courage to be a pig. It takes courage to ride a profit with huge leverage.... When you right on something, you cant own enough.

Melamed aside, the traders interviewed in this book do not seem worthy of interview caliber. I get the feeling that Koppel and Abell were trying to think of a way to cash in on having Leo's number in their rolodex and built this book around it. Another thing that bothered me is that profanity is sprinkled throughout this book in pointless places. I'm no shrinking violet, but what is the point of that? To give the book "street cred?" It just seemed unprofessional and childish.

In Schwager's classic book of interviews "Market Wizards," every trader interviewed had a great track record, and at least one interesting insight into the markets or something unique to say that was worth reading. That book seems to have spawned an innumerable series of poor quality knockoffs, including this one. The traders in "Innergame" have no track records posted, and nothing worthwhile to say. The trader commentary is mostly inane, with many boring side trips into irrelevant or unexplained subjects, and most of the observations are either trite or downright goofy. For example, a cattle trader talks about how even if he is only entering the market with 5 or 10 contracts, he places the trade as if he were doing a 10,000 contract trade. And when he sells, he tries to sell in the same way as if he had 10,000 contracts to unload. Wonderful. These are the kind of insipid observations that neophytes get snowed by, because they just assume there is something there of value that they are missing. There isn't. It's just dumb.

If this is one of the very first books you read on trading, you might think it is ok simply because most of the generalizations made are based on truth. But those points have been beaten to death a million times over and this book does little more than recycle some old lines, then tacks on some lame questions at the end. The self assessment / workbook section of the book has the flavor of a poorly put together motivational / self esteem seminar. Think about yourself. Think about your goals. Visualize cutting your losses and letting your profits run....blah blah blah....

In my opinion books like this are low effort cash generators that prey on the indiscriminate reader attracted to the mystique of the markets. Pick up the original Market Wizards or Reminiscences of a Stock Operater instead- or if you have already read those two, then there is no need to read this one.

"37.) While studying for a joint MBA/JD degree at the University of Pennsylvania, Paul Haaga worked part time at Wellington for Jack Bogle--for $6.00 an hour--writing prospectuses and shareholder reports. After graduation, he went to the SEC in Washington from 1974 to 1977, and then joined Dechert, Price & Rhoades, where he became a partner. In 1985, when Jim Ratzlaff heard that Haaga might leave, he called and said, 'If you ever decide to leave private practice, come talk with us at Capital.' With two brothers already living in Los Angeles, the idea of living on the West Coast was 'not out of the question,' and Haaga joined Capital in 1985."

Again, this footnote, reproduced in its entirety, is from a section describing the introduction of 12b-1 fees. Prior to this point in the book, we have not even been introduced to Paul Haaga yet, so we don't know why his career path is relevant to the discussion of 12b-1 fees (it isn't). We are left to wonder, why did the estimable Mr. Ellis choose to include this fact at this point in the book? Does he think that we are so interested in the career path of this particular individual at Capital that we could not wait to read about it 50 pages later?

I could cite another dozen examples of unnecessary footnotes, egregious spelling and factual mistakes, and long asides that distract from the narrative and key points that Mr. Ellis is trying to expose us to, but then I would be subjecting readers to the same level of tedious minutiae as Mr. Ellis. This book is excrutiatingly difficult to read, a real shame given its subject. Ignore the glowing dust jacket reviews from John Neff, Peter Bernstein, Jack Meyer, Abby Joseph Cohen (!), and George J. W. Goodman--these folks are surely old friends of Mr. Ellis, and they clearly could not have finished such a tedious book. They have better things to do.

What I found puzzling is how much of the text was spent on Soros' philanthropic activities. They deserve a significant portion of the text, but well over half of the text is devoted to this. I would have been interested, for example, in seeing some experts from Soros "Burden", and trying to understand a bit better what issues Soros was trying to describe in his own book, but could not.

Having said all this, this was a well researched, well written, well referenced biography. This is not a trading book, and those seeking trading advice should look elsewhere.