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Lowenstein, a financial journalist and author of Buffett: The Making of an American Capitalist, examines the personalities, academic experts, and professional relationships at LTCM and uncovers the layers of numbers behind its roller-coaster ride with the precision of a skilled surgeon. The fund's enigmatic founder, John Meriwether, spent almost 20 years at Salomon Brothers, where he formed its renowned Arbitrage Group by hiring academia's top financial economists. Though Meriwether left Salomon under a cloud of the SEC's wrath, he leapt into his next venture with ease and enticed most of his former Salomon hires--and eventually even David Mullins, the former vice chairman of the U.S. Federal Reserve--to join him in starting a hedge fund that would beat all hedge funds.
LTCM began trading in 1994, after completing a road show that, despite the Ph.D.-touting partners' lack of social skills and their disdainful condescension of potential investors who couldn't rise to their intellectual level, netted a whopping $1.25 billion. The fund would seek to earn a tiny spread on thousands of trades, "as if it were vacuuming nickels that others couldn't see," in the words of one of its Nobel laureate partners, Myron Scholes. And nickels it found. In its first two years, LTCM earned $1.6 billion, profits that exceeded 40 percent even after the partners' hefty cuts. By the spring of 1996, it was holding $140 billion in assets. But the end was soon in sight, and Lowenstein's detailed account of each successively worse month of 1998, culminating in a disastrous August and the partners' subsequent panicked moves, is riveting.
The arbitrageur's world is a complicated one, and it might have served Lowenstein well to slow down and explain in greater detail the complex terms of the more exotic species of investment flora that cram the book's pages. However, much of the intrigue of the Long-Term story lies in its dizzying pace (not to mention the dizzying amounts of money won and lost in the fund's short lifespan). Lowenstein's smooth, conversational but equally urgent tone carries it along well. The book is a compelling read for those who've always wondered what lay behind the Fed's controversial involvement with the LTCM hedge-fund debacle. --S. Ketchum --This text refers to an out of print or unavailable edition of this title.
Lowenstein is a great storyteller and this is an excellent tale of hubris and the desire to look at the world the way we want to see it - rather than how it really is. Read morePublished 3 months ago by Gavin Radzick
My title said it best - the topic of the book is very interesting, but the writing style does not make you want to finish it in one reading.Published on April 14 2013 by boyan
The author of this book is a journalist - not a trader or banker - and it's helpful to remember that as you read through this moralistic account of LTCM's rise and fall. Read morePublished on June 26 2004
There should be a sinking feeling in the pit of your stomach as you read this book. Long-Term Capital Management was almost guaranteed to fail from its outset and, when the end... Read morePublished on June 19 2004 by Mr Mondo
Any fool knows that playing the futures game is a risk. But here we have a situation where John Meriwether, having left Salomon Brothers under a cloud, is trusted with lots of... Read morePublished on Feb. 7 2004 by J. E. Robinson
The geniuses who ran Long-Term Capital Management thought they could do no wrong. They believed they had developed a can't fail system of playing small margins in bond and equity... Read morePublished on Jan. 7 2004 by James Sadler
This book was poorly written, poorly edited, and abounds in bad and misleading metaphors and badly presented explanations of the industry and its technical concepts. Read morePublished on Dec 29 2003 by Keith E. Koenigsberg