Frenzy: Bubbles, Busts, and How to Come Out Ahead [Hardcover]

Carl Haacke (Author)

Book Description

Publication Date: November 18, 2004

Despite the hype, the technology bubble of the 1990s was not driven by the Internet. It was driven by innate human forces that transcend the Internet, the 1990s the 20th century, and the United States. Since the 1960s, there has rarely been a year with out a bubble somewhere. Today we see bubbles in China, nano-technology, real estate, and many more are on the way.
Through an in-depth analysis and interviews with over 100 of the world’s most influential venture capitalists, Fortune 500 CEOs and Wall Street’s multi-billion dollar portfolio managers, Frenzy reveals the unexpected driving forces of bubbles. Frenzy provides critical insights and lessons for today’s business professionals, investors and policy makers to manage the bubbles of the future.

Editorial Reviews

From Publishers Weekly

Irrational exuberance is the predictable outcome of human nature and competitive pressures, contends this engaging post-mortem on the Internet bubble. Haacke, an economic policy advisor in the Clinton Administration, treats the bull market of the 1990s as an exercise in group psychology. Investors, who understood little of the Internet’s novel capabilities, had their perceptions clouded by media hype and optimistic analysts and fell prey to such cognitive lapses as the "representative heuristic" (memorable events model the norm), the "simulation heuristic" (what can be imagined can be achieved) and the "information cascade" (other bullish investors must know what they are doing). Investment professionals are paid to be more level-headed, but as technology stocks skyrocketed and clients demanded gargantuan returns, venture capitalists, investment bankers and fund managers felt pressured to abandon common sense in pursuit of wildly over-valued dotcoms. Haacke presents a lively and insightful account of the Internet bubble—complete with rueful commentary from chastened venture capitalists—set against colorful retrospectives of previous financial manias, from the 19th-century railway boom to the personal computer craze of the 1980s. Along the way, he throws in a few words of wisdom like "embrace the skeptics" and "be wary of information manipulation." This advice is sure to be ignored when the next bubble begins to swell, but in the meantime readers will find the book an amusing guide to the madness of crowds.
Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.

Review

"Haacke offers valuable lessons that individual investors, venture capitalists and business managers should learn before the next cycle of speculative market activity." --David W. Dorman, AT&T Chairman and CEO

"Frenzy is fascinating and insightful. With remarkable clarity, Carl Haacke cracks the code of how bubbles work and provides important warnings for the future that may be closer than you think."
--William R. Hambrecht, Chairman, Founder, and CEO, WR Hambrecht + Co

"A 'must read' for anyone who might be tempted to think: 'Next time it will be different.' Carl Haacke has analyzed the Internet Bubble with great precision and the lessons he teaches us are essential to understand for the future. I recommend this book highly." --Tom Perkins, Founder of Kleiner Perkins Caufield and Byers

"Very colorful and authoritative. This book clearly proves that at the end of the day the traditional metrics for measuring the value of companies, their ability to generate real profits and net-free cash flow, is the key to building long-term, successful investments."
-Alan Patricof, Co-Founder, Apax Partners

"Frenzy hit the nail on the head. Bubbles should surprise no one. They're almost forecastible. The dot.com era is no more ridiculous than the pc era of the 1980s or the nifty fifty era of the 1970s or the microprocessor era of the 1960s or the tulip era of the 1600s. Frenzy should help its readers recognize the next cycle of irrational optimism and avoid making the same mistakes that lead investors to go down like the Titanic."
--Don Valentine, Founder, Sequoia Capital

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Product Details

• Hardcover: 224 pages
• Publisher: Palgrave Macmillan; 1st edition (November 18, 2004)
• Language: English
• ISBN-10: 140396131X
• ISBN-13: 978-1403961310
• Product Dimensions: 8.4 x 5.7 x 1 inches
• Shipping Weight: 12 ounces
• Average Customer Review: 4.3 out of 5 stars  See all reviews (12 customer reviews)
• Amazon Best Sellers Rank: #1,704,204 in Books (See Top 100 in Books)

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Customer Reviews

Most Helpful Customer Reviews

8 of 8 people found the following review helpful:

5.0 out of 5 stars Clear-headed Analysis of Heady Times, March 22, 2005

By 

Ajoy Chandra (Jersey City, NJ United States) - See all my reviews
(REAL NAME)   

This review is from: Frenzy: Bubbles, Busts, and How to Come Out Ahead (Hardcover)

I have to take issue with one of the above reviews. I don't think that "Frenzy" is out to amuse or entertain, so much as it's meant to inform and enrich a wider audience. Indeed, much of Haacke's rigorous analysis neatly bundles together a mountain of disparate and diffuse information and distills from that process what I found to be meaningful lessons for the future (and arguably, the present). I happen to have an MBA, but think that the book will appeal to anyone who is curious about a heady time in our recent past and would like to better understand it with the benefit of historical perspective.

6 of 6 people found the following review helpful:

5.0 out of 5 stars A Must Read For Anyone Interested in Understanding Bubbles, March 22, 2005

By 

Vijay Perincherry (Washington, DC) - See all my reviews
(REAL NAME)   

This review is from: Frenzy: Bubbles, Busts, and How to Come Out Ahead (Hardcover)

Frenzy is an extremely compelling and insightful book. Carl Haacke takes one through the various stages of a bubble in a very engaging manner with quotations from those who really experienced it, benefited from it, and got burnt by it. It's a
page turning adventure through the most powerful forces that drive the innovative frontier of capitalism.

At the same time, it is chock full of penetrating insights that will grab even the savviest readers. One of the interesting things is that the book does not characterize bubbles as "irrational exuberance" or "group psychology" as many others have done. Instead, it shows how the phenonomenon is driven by very rational people caught in complex market conditions. Frenzy offers very valuable suggestions on indicators of bubbles, and warnings of information distortions during bubbles.

The book also does a great job showing that bubbles are not just about stock market but also about big businesses, small businesses and day to day decision making as people pursue seemingly huge opportunties.

I thorughly enjoyed the book.

4 of 4 people found the following review helpful:

5.0 out of 5 stars The Experts are Right -- this is a MUST Read, January 24, 2005

By 

Jonathon Stein (New York City) - See all my reviews

This review is from: Frenzy: Bubbles, Busts, and How to Come Out Ahead (Hardcover)

When the guys who practically invented venture capital, private equity and technology investing recommend a book I listen. Tom Perkins said Frenzy was "brilliant" and a "must read." Alan Patricof and AT&T CEO Dave Dorman both said incredible things about it and they are right! Frenzy is a great mix of engaging, easy to read, providing some easy frameworks for understanding bubbles but also uncovering some really interesting nuances.

You don't hear those adjective much about business books or investing books. But Carl Haacke breaks the mold and creates a terrific book!

Haacke makes a compelling case that bubbles are not rare events that we can ignore once they pass but in fact are everywhere. With really great interviews and solid analysis he gives the reader a fascinating inside look at what drives with some really unexpected insights.