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4.4 out of 5 stars
105
Devil Take the Hindmost: A History of Financial Speculation
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on July 10, 2012
I read this book for a Finance book club. Although it is probably not one I would immediately have picked up on my own I did find it quite interesting. It is EXACTLY what it claims to be - a history of financial speculation. With 2 exceptions - the tulip bulbs and Japan, it is a history of speculation in English speaking areas - mostly England and the US. It does a good job in the begining of explaining the causes of speculation (they are the same every time.) That is the one downside to this book, after you read the first couple of chapters, they all read almost exactly the same! It gets a bit dull after a while. If you are interested in finance or more especially speculation, this is a very interesting and enjoyable book!
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on October 14, 2010
The author brings broad experience, and deep knowledge to the subject. He writes extremely well, managing to be both scholarly and entertaining. He supplies generous quotes and footnotes, including many from contemporary writers, thinkers, and participants. I have read more than 50 books on investing in the past couple years and this one is a must read. As the well respected and also erudite William Bernstein has noted, a knowledge of investing / market history is one of the four prerequisites to becoming a successful individual investor. Investors, read this book and you will be wary of the recurring frauds and excessive enthusiasms that would be dangerous to your financial security. This is a book that could be re-read every decade or so, to vaccinate you against irrational exuberance!
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on November 18, 2011
Chancellor provides a detailed and entertaining historical sweep of financial market speculation from the Dutch tulip bubble of the 1630s through the collapse of LTCM in 1998. Throughout, however, he often makes the effective analogue of what recent Nobel Prize winner Chris Sims famously labeled `incredible identifying restrictions.' In the final pages, he comes out in favor of fixed exchange rates. In the final footnote, he favorably cites a Labor MP wrote that the single European currency `is the only way Britain can protect itself from the ravages of currency speculation ...' Sitting in late 2011, amid increasing (reasonable?) speculation that the Eurozone's system of fixed exchange rates may unravel sooner rather later, Chancellor doesn't look terribly prescient.
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VINE VOICEon April 9, 2005
Speculation is nothing new to humankind. Given that humans naturally seek more, then speculation is a normal part of that process. Put simply, speculation has always been with us and always will be with us.

Edward Chancellor's work, which is sub-titled "A History of Financial Speculation", covers history from the time of Tulipomania in 17th century Holland to the collapse of the modern Japanese economic bubble and the trade in junk bonds in America. If the book were to be revised, I am sure that Chancellor could readily cover the bursting of the dot com bubble and the ongoing travails of Japan.

In essence, "Devil Take the Hindmost" is a history of crowd madness. That is, an otherwise rational individual will often behave in a different manner when guided by a group. Such an individual may load up on dot com companies even though the price earnings ratios are screaming sell simply because others a buying and the market is trending upwards. However, as with all bubbles, there will be a bust. Bubbles come and go. When someone claims that "this time it's different", alarm bells should start to ring. The individual who can see reason in the crowd is the one who will avoid the inevitable slump.

I recommend this book to anyone interested in financial history. My only criticism is that Chancellor seems to think that speculation can sometimes be contained. This is not the case. Speculation lies at the heart of our modern economy.
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on February 14, 2014
I love the stories (rather I love the facts).

The book tells you how the crooks made money. All investors should read and learn from it.

Many more ineresting events can go into the book. Given it is only a thin book, I cannot complain. I wish there is another book similar to this one.
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on January 5, 2017
Must read for anyone interested in capital markets
A reminder of madness taking over the populace AND the professionals
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on March 25, 2015
Very good history of financial crises, kind of a narrative version of Manias, Panics & Crashes. I read both as part of my history studies in grad school, and for my first book, "The Case of the Cleantech Con Artist: A True Vegas Tale."
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on January 28, 2010
This book makes it extremely clear that the stock market is a dangerous place. The author begins with the speculator and the ethics of speculation.

"Speculation is a divisive topic. Many politicians - several of them in Asia - warn that the global economy is being held hostage by speculators. In their opinion, the speculator is a parasitical figure, driven by greed and fear, who creates and thrives on financial crises ... Western economists take a radically different line. They argue that speculation is fundamentally a benign force, essential to the proper functioning of the capitalist system."

In the last paragraph of the book the author gives us his conclusion on this speculative debate.

"Speculation undermined the Bretton Woods system of fixed currencies and, more recently, it has destroyed the state managed capitalism of Japan and other Asian nations. As an anarchic force, speculation demands continuing government restrictions, but inevitably it will break and chains and run amok. The pendulum swings back and forth between economic liberty and constraint."

That conclusion in my estimation gets a 10 on the Alan Greenspan scale of economic mumbo-jumbo. But it is standard fare from those versed in economics. After reading the book I actually understand what the author is trying to say in this self-contradictory statement. That's a little scary, in itself.
But in truth I did not buy this book to get the author's answers to anything. I bought it to get historical information on panics, bubbles and crises. I got a good deal of information. I'm satisfied.

I was actually looking for a book discussing U.S. panics beginning with colonial times and coming forward to the present. More than half this book discusses pre-colonial panics and countries other than the U.S. So I'm still in the market for something more specific and more detailed.

But what about investing in the stock market? What kinds of people have been involved in this enterprise? And how should an average person look at the stock market for his personal investments.

The answers for me, after reading this book are: Do not invest in the stock market. It is filled with crazies, manipulators and the clinically insane - not to mention outright gangsters and criminals. And an average person would be better off investing their life's savings in their retarded son-in-law than giving their money to a stock broker.

The author takes his readers on a tour of the many famous speculative bubbles and manias of the past going back to the "Tulipomania" of 1630 and carrying us through the Japanese crisis of the 1980s. He even dabbles into present day derivatives and hedge funds. The book was published in 1999 so it predates the current fiasco. But this book makes it very clear that the historical information was there. Japan should have been an obvious example.

For Alan Greenspan to state before Congress that he couldn't imagine that prominent bankers and brokers would act in such a "negligent" unprofessional manner is beyond naivete. Alan was obviously joking. It is difficult to determine when Alan Greenspan is joking.

But Alan was not the criminal. He did nothing wrong. He did nothing right either. As J.K. Galbraith stated in many of his books, the Federal Reserve and its bosses did exactly what they should have done ... nothing. If they let the bubble go until it collapsed they are blamed for the collapse. If they put on the brakes and tighten up the money in the middle of a "boom" they will be blamed from killing the growth and crippling the prosperity. For us here at home the big questions are where were the inspectors, the regulatory agencies and the Congress and the Senate with the proper rules? And even bigger question ... Where was the moral conscience of all those thousands who participated in all the scamming and falsifying? We had more than an accident here. We had a moral and ethical calamity.

What this book makes clear is that what has happened has happened many times before - not on such a great a scale as today. This current speculative extravaganza was a major moral earthquake.

Galbraith said in his book "Money, Whence it Came, Where it Went" that the time between speculative insanities or panics is directly proportional to the time it takes for everyone to forget the last speculative bubble or panic.

Galbraith also had much the same confusing type answer to the problem as offered by Mr. Chancellor.

For the present, rules and regulations need to be put in place but as time goes on these rules or any rules will be undermined. There will then be another collapse and a new need for newer rules. Galbraith suggested a five year term for new rules and new regulators. Then all bureaus should be abolished and new ones established. In other words, the new rules must be kept ahead of the old rule breakers and manipulators. Keep changing the game.

This answer seems to indicate that the problem is endemic to the system. So we need a new system. But is that possible? And what will it be? And will it have other flaws equal to or worse than the present system?

Maybe the same system could be continued if we could just develop some better human beings.

Richard Edward Noble - The Hobo Philosopher - Author of:

"Hobo-ing America: A Workingman's Tour of the U.S.A.."
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on October 21, 2016
Mostly a rehash of previously published material.
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on October 9, 2009
I really liked it. It went into pretty good detail on some major market bubbles. Mainly focuses on London and New York events. I learned a lot and it was pretty easy to read, except for some run on sentences. Im not sure if the author was trying to make it sound "old timey" but he spells words funny too....i dunno, but i read financial books all the time and this is one of the best ones that i have now.
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