Devil Take The Hindmost (Edward Chancellor) 3 comments

The small investor should recognise the value of reading investment books on historical manias and crashes. There are several reasons: firstly, for the often-repeated but still true cliche that one can learn much from history, in this case even more, for a large part of investment is human psychology; secondly, true manias/panics are rare and might happen only once or twice every generation (people remember their pain so it needs a new generation to make the same mistakes), so personal experience might be rare and one has to know these events vicariously through books; thirdly, the simple reason that if you're interested in investment, then you will find its history engaging, provided its narration is not too plodding.

Devil Take The Hindmost will capture the interest of the reader once he starts reading. It covers a number of speculative manias (and the subsequent crashes) and each tale is about 30-40 pages long, which is just about the right length to both capture the spirit of the times and yet not bore the reader.

The book spans across three centuries of stock market speculation, and covers not just America (as many books seem to do nowadays) but also old Europe and even Japan. I have used this book as material for a few writeups on another blog (Tales of the Stock Market) and it was the only one I ever needed. From the South Sea bubble to the robber barons to the Great Depression to the 1980s Japanese asset investment mania, the author covered all the important bases in very readable fashion, from the mania's origins, its main protagonists and their roles (together with very lively descriptions of these characters), the development of the mania, the final collapse, and very importantly, the various anecdotes which impart a vivid flavour to events that had happened a long time ago.

For those who might want to read up on more recent financial history the book might not be suitable. Only about 2.5 chapters (a small section on the 1998 LTCM scandal) out of a total of 9 deal with events after 1950. Of course, as I have said above, true manias are rare; the author has taken a broader historical perspective in selecting which market manias to cover. However for those who are interested in how the financial world has grown to what it is today, in particular how corporate governance has evolved through the ages, incorporating new rules to tighten loopholes with each successive scandal, the book holds tremendous value.