I was always curious about stocks and why they frequently appeared in my search results whenever I looked for ways to make money. I wasn’t initially interested in stocks, but I decided to explore the subject by reading up on it and conducting my research. Through books—some of which are mentioned in this article—I learned the basics of stocks and bonds, as well as the difference between the two. However, all this knowledge remained theoretical. Understanding how to pick the right stocks, what actions to take when things go wrong, and the intricacies of the stock market itself were much more complex in practice. After delving deeper into the subject, I gained a stronger understanding of finance and the stock market. Then, in 2021, something happened that truly caught my attention: the GameStop boom. This event sparked my interest and pushed me to learn more. For those unfamiliar, GameStop, a video game retailer whose stock was priced low due to its struggling business, became the center of an intense market event known as a “short squeeze.” In simple terms, a short squeeze occurs when the price of a stock rises sharply, forcing short sellers (investors betting that the stock price will drop) to exit their positions. They are compelled to buy back the stock, which drives the price even higher. This can be catastrophic for short sellers but can result in significant profits for those who buy the stock during the squeeze.
What made the GameStop event even more remarkable was that a group of amateur investors, many of whom had taken up day trading during the pandemic, banded together to buy up the stock. Their collective action drove the price up, causing massive losses for several hedge funds that had bet against GameStop. The situation became a symbol of the “good” amateur day-traders standing up against the “evil” hedge fund managers, turning what could have been a typical market event into a dramatic and highly publicized standoff.
The ripple effect of this event was extraordinary. It captured the attention of the entire internet, and the stock market’s volatility during this period was unprecedented. In fact, the situation grew so personal that one hedge fund manager became the target of memes and even received death threats. The market, typically seen as a space for profit-driven buying and selling, became a battleground for larger ideas about wealth, power, and society.
After witnessing this event, I began to wonder how I could take advantage of such opportunities and why the GameStop phenomenon resonated so deeply with so many people. I realized that the stock market often serves as a lens for broader ethical discussions about money and society. This insight fascinated me so much that it inspired me to explore these themes further, even considering ways to reflect on them in fiction.
First on the list is Bonfire of the Vanities, a classic novel that talks about themes of class, race, and inherent biases, all masterfully explored by Tom Wolfe. While the stock market isn’t central to the plot, it serves as a backdrop that highlights many facets of life in 1980s New York. The protagonist, a bond trader, embodies the greed, ambition, and questionable ethics often associated with Wall Street during that era. The film adaptation is worth watching as well.
On the other hand, this historical mystery is set in eighteenth-century London, during the early days of the stock market. It follows a Jewish former boxer turned investigator as he seeks to uncover the truth behind his father’s death. The novel offers a fascinating look into the complex social hierarchy of the 1700s and provides a rare glimpse into the origins of stock trading, particularly the infamous South Sea bubble and the first major market crash.
Let’s dive deeper into Hernan Diaz’s Trust. Second on my list, this Pulitzer Prize winner has received much acclaim and attention, and it’s easy to see why. The story centers on a Wall Street tycoon who foresaw the Great Crash of 1929 and managed to amass a fortune from it. It’s worth mentioning that I was already deep into writing my new novel when this literary gem hit the shelves, so any similarities are purely coincidental.
Trust distinguishes itself with its innovative narrative approach, presenting the story through four separate fictional texts: a “novel,” an “autobiography,” a “memoir,” and a “diary.” Each of these texts is narrated by a different character, offering diverse perspectives and adding layers of complexity to the tale. This multifaceted structure turns a familiar narrative about stock market excess into an intricate puzzle, challenging the reader to piece together the truth.
The book’s unexpected twists and innovative narrative style have earned it a place on many “best of” lists. Diaz’s ability to weave such a compelling and thought-provoking story through these distinct narratives is a testament to his literary prowess. The themes of wealth, power, and the pursuit of truth are relevant and resonate deeply with the societal issues we continue to grapple with today.
It’s no surprise that Trust has garnered such high praise, as it pushes the boundaries of traditional storytelling and offers a fresh take on historical events. This book is a must-read for anyone interested in a story that is both intellectually stimulating and emotionally engaging.
Number three on the list is Edwin Lefevre’s Reminiscences of a Stock Operator. This classic, arguably the least known and oldest in the round-up, spins a fascinating rags-to-riches tale. The story centers on a fifteen-year-old boy who harnesses his sharp intellect and distinctive investment strategies to become a stock market virtuoso. Told in the first person, this “memoir” closely follows the early life of Jesse Livermore, a Wall Street legend who famously shorted the Great Crash of 1929, securing a vast fortune.
There’s even speculation that Livermore himself might have been the book’s ghostwriter, adding to the allure and mystique of this financial classic. Written a century ago, the strategies detailed in Reminiscences have proven to be so foundational that they remain required reading for new hires at numerous banks today.
During my research for The Trade-Off (which draws partial inspiration from Livermore’s exploits), I found this book to be an enlightening exploration of the early days of Wall Street. It offers not only a vivid historical perspective but also surprisingly modern market philosophies that still resonate with today’s investors. It’s a timeless resource, blending historical narrative with practical financial wisdom, making it an indispensable read for anyone fascinated by the intricacies of the stock market.
Number four on the list is Michael Lewis’s Liar’s Poker. If you’re looking for jaw-dropping tales of Gordon Gecko-like bankers, this book is an absolute must-read. Lewis’s first book, a semi autobiographical account, takes you on a wild ride through his journey to becoming a bond trader at Salomon Brothers. It offers a scathing, insider’s perspective on Wall Street during the 1980s—a time defined by excessive risk-taking and financial bravado.
Despite being nonfiction, Liar’s Poker reads with the drama and intensity of a novel, pulling you into the high-stakes world of bond trading. It’s regarded as one of the seminal works that captured the essence of 1980s Wall Street, bringing to life the characters and the culture in vivid detail.
Michael Lewis doesn’t just provide a narrative; he exposes the inner workings of Wall Street, making complex financial concepts accessible and engaging. His sharp wit and keen observations paint a picture of a financial world that’s as fascinating as it is troubling.
Last but not least book on this list is Benjamin Graham’s Intelligent Investor, this seminal work is often hailed as the bible of investing. Written by one of the most influential investment thinkers of all time, The Intelligent Investor offers timeless wisdom on how to navigate the unpredictable waters of the stock market. Graham’s approach to investing, known as value investing, is all about being patient, disciplined, and eager to capitalize on market opportunities. The book emphasizes the importance of thorough analysis, a long-term perspective, and the ability to maintain one’s composure during market fluctuations. His core principle is to buy undervalued stocks that have intrinsic value, rather than chasing quick profits through speculative investments.
Though it was first published in 1949, The Intelligent Investor remains incredibly relevant. Graham’s insights into market psychology and his concepts like “margin of safety” have laid the foundation for countless investors and have been lauded by many financial giants, including Warren Buffett.
While technically a nonfiction book, it reads with the clarity and engagement of a novel, making complex financial principles accessible to both novice and experienced investors. Graham’s practical advice not only delves into the mechanics of investing but also the mindset required to be successful.
For anyone keen on developing a sound investment strategy, The Intelligent Investor is essential reading. It doesn’t just teach you how to invest; it imparts wisdom on how to think about investing. Much like Michael Lewis’s Liar’s Poker, Graham’s book offers a profound look into the world of finance, although from a more strategic and philosophical angle.
Reading The Intelligent Investor equips you with the tools to not only make informed investment decisions but to also understand the underlying principles that drive market behavior. It’s a timeless resource that continues to shape the philosophies and strategies of investors around the world.
There are so many other books in this genre to explore. such as the Barbarians at the Gate which delves into the notorious leveraged buyout of RJR Nabisco, Den of Thieves uncovers the insider trading scandals of the 1980s, and When Genius Failed, chronicles the rise and fall of Long Term Capital Management. Each of these books offer unique insights into the turbulent world of finance, providing a broader understanding of the forces that shape our economic landscape. Also The Big Short which involves the real story of the crash began in bizarre feeder markets where the sun doesn’t shine and the SEC doesn’t dare, or bother, to tread.
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