Everyone has heard of the Securities and Exchange commission. They regulate the markets that common people like you and I invest in, but what they don't regulate is private investment groups. Groups, that you and I cannot get into unless are net-worths are somewhere beyond a million dollars. The purpose of the SEC is to protect us and the financial market but what if one of these private groups could single-handily destroy the global financial system by itself?
This is where the story of Long-Term Capital Management comes to play in the book When Genius Failed. Most of us are unaware of the crisis that could have occurred to the financial system without the Fed helping to produce a bailout plan for Long-Term Capital Management. One company, one $100 Billion Money Making Giant, holding one trillion dollars in global paper assets, led by one genius, John Meriwether.
In reading this book you will learn:
Who John Meriwether is
How Long-Term Capital Management got so big
What a Hedge Fund is
Why the stock market is can never be an exact science
Why burning bridges in relationships is a bad idea
Long-Term Capital Management used a model to build the biggest hedge-fund firm known to the world. On their journey there they continually squeezed the banks they were borrowing money from down to the lowest interest rates and borrowing fees possible; leaving some resentment that would play a big part in the downfall of Long-Term Capital Management.
The partners of Long-Term Capital Management believed in their investing strategy so firmly that they would not waver; not even in the face of global disaster.
I give this book a 10/10 for the retelling the story of this hedge-fund giant and the danger that private investors can have on the global markets and financial systems.
Tom Van is the owner and author of http://www.thomasvan.net/ The core focus of his website is to promote financial literacy and self-reliance by providing free educational articles on his website and blogging about his experiences.
He is the author of the creative finance blog which involves the use of buying things you want using creative methods when traditional methods are unavailable to you. You can learn more about his creative finance blog by visiting [http://www.thomasvan.net/category/blogs/creative-financing]
To see more book reviews by this author visit [http://www.thomasvan.net/book-reviews/book-reviews]
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