More Money Than God

“In November 2008, after two months of market pandemonium, five hedge-fund barrons were called to testify in Congress, in what promised to be a show trial. But someway through the proceedings, an unexpected tone emerged. “”

 

“More Money Than God” has been written by Sebastian Mallaby, the Paul Volcker Senior Fellow in International Economics at the Council on Foreign Relations. He is also a columnist at the Washington Post. The book was published in the year 2010, in the aftermath of the financial crisis of 2008. This book is a comprehensive account of the history of the Hedge(d) Fund industry.

A.W. Jones created the very first hedge-fund in the year 1949 with an initial capital of $100,000. Since then the industry has grown exponentially and today there are over 11,000 hedge-funds with over $3.2 trillion worth of assets under management.

The industry sees a wide variety of investment strategies employed by different fund managers. A few notable fund managers and their strategies are: –
Julian Robertson, who used the method of value investing.
George Soros along with Stan Druckenmiller, who identified weaknesses in government policies to profit from.
James Simons, a code breaker, who employ mathematical models to find trends in the market to profit from.

Just like every other industry, the hedge-fund industry has seen its fair share of failures, with one of the most notable ones being the failure of Long-Term Capital Management (LTCM). But interestingly, unlike most other industries, the industry has never required a government bailout to save the it. Cases of hedge-fund failures have almost always been resolved within the industry, one notable case being the failure of Amaranth Advisors which was resolved by another hedge-fund, Citadel. Similarly, the failure of LTCM was resolved after players within the industry decided to purchase its assets.

This book takes readers through the history of the industry, explains various strategies employed by different fund managers and the results of these strategies. The author also gives accounts of significant events of the industry, such as White Wednesday and Hurricane Greenspan. In all this book would be an engaging read for anyone interested in the world of financial markets.

Share Button

Leave a Comment