Wealth, War and Wisdom
In Wealth, War & Wisdom, legendary Wall Street investor Barton Biggs reveals how the turning points of World War II intersected with market performance, and shows how these lessons can help the twenty-first century investor comprehend our own perilous times as well as choose the best strategies for the modern market economy. Filled with in-depth observations and practical advice, Wealth, War & Wisdom will help you apply these original financial lessons directly, and beneficially, to today’s turbulent markets.Product Details
Editorial Reviews
Review
"'Wealth, War & Wisdom' fills a void...Biggs has read widely and thought deeply." (bloomberg.com) "air of scholarly detachment and his lucid prose make [the book] worthy as both an economic primer and history seminar." (Trader Monthly, March 2008) "...completely relevant, indeed essential, to predicting the way modern financial markets and the economy will act during uncertain times..." (HereIsTheCity.com, Sat 8th March) "His clear and lively writing style and his deep knowledge of markets and investments will entertain...as well as educate". (Yahoo Finance, Tuesday 15th April 2008) "must-read book". CNBC Squawk Box Wednesday 4 June 2008 Journal interview with the author. EFinancialNews.com Tuesday 3 June 2008 "Very comprehensive...All of his recommendations are backed up with extensive research and presented in an easy-to-understand manner." Stockerblog.Blogspot.com Saturday 31 May 2008 "...contains fascinating insights and should be valuable to all those who are struggling to put the present financial crisis into perspective." (Spear's WMS, January 2009)
"Barton Biggs has some offbeat advice for the rich: Insure yourself against war and disaster by buying a remote farm or ranch and stocking it with 'seed, fertilizer, canned food, wine, medicine, clothes, etc.'
"The ``etc.'' must mean guns.
"'A few rounds over the approaching brigands' heads would probably be a compelling persuader that there are easier farms to pillage,' he writes in his new book, 'Wealth, War and Wisdom.'
"Biggs is no paranoid survivalist. He was chief global strategist at Morgan Stanley before leaving in 2003 to form hedge fund Traxis Partners. He doesn't lock and load until the last page of this smart look at how World War II warped share prices, gutted wealth and remains a warning to investors. His message: Listen to markets, learn from history and prepare for the worst.
"'Wealth, War and Wisdom' fills a void. Library shelves are packed with volumes on World War II. The history of stock markets also has been ably recorded, notably in Robert Sobel's 'The Big Board.' Yet how many books track the intersection of the two?
"The 'wisdom' in the alliterative title refers to the spooky way markets can foreshadow the future. Biggs became fascinated with this phenomenon after discovering by chance that equity markets sensed major turning points in the war.
"The British stock market bottomed out in late June 1940 and started rising again before the truly grim days of the Battle of Britain in July to October, when the Germans were splintering London with bombs and preparing to invade the U.K.
`Epic Bottom'
"The Dow Jones Industrial Average plumbed 'an epic bottom' in late April and early May of 1942, then began climbing well before the U.S. victory in the Battle of Midway in June turned the tide against the Japanese.
"Berlin shares 'peaked at the high-water mark of the German attack on Russia just before the advance German patrols actually saw the spires of Moscow in early December of 1941.'
"'Those were the three great momentum changes of World War II -- although at the time, no one except the stock markets recognized them as such.'
"Biggs isn't suggesting that Mr. Market is infallible: He can get 'panicky and crazy in the heat of the moment,' he says. Over the long haul, though, markets display what James Surowiecki calls 'the wisdom of crowds.'
"Like giant voting machines, they aggregate the judgments of individuals acting independently into a collective assessment. Biggs stress-tests this theory against events that shook nations from the Depression through the Korean War, which he calls 'the last battle of World War II.'
Refresher Course
"Biggs has read widely and thought deeply. He has a pleasing conversational style, an eye for memorable anecdotes and a weakness for Winston Churchill's quips. His book works as a brisk refresher course.
"What really packs a wallop, though, is his combination of military history, market action, maps and charts. It's one thing to say that the London market scraped bottom before the Battle of Britain. It's another to show it.
"In May and June 1940, some 338,000 British and French troops had been evacuated from Dunkirk by a flotilla of fishing boats, tugs, barges, yachts and river steamers. The French and Belgian armies had collapsed; the Dutch had surrendered. Britain stood alone, as bombs shattered London and the Nazis prepared to invade. Yet stocks rallied.
"Mankind endures 'an episode of great wealth destruction' at least once every century, Biggs reminds us. So the wealthy should prepare to ride out a disaster, be it a tsunami, a market meltdown or Islamic terrorists with a dirty bomb.
"The rich get complacent, assuming they will have time ``to extricate themselves and their wealth'' when trouble comes, Biggs says. The rich are mistaken, as the Holocaust proves.
"'Events move much faster than anyone expects,' he says, 'and the barbarians are on top of you before you can escape.'"--Bloomberg (Jan. 30)
"Traders unnerved by the harrowing news on offer at this particular moment in history should ease their worried minds with an amble through Barton Biggs' stellar new book, Wealth, War, & Wisdom. Biggs...turns his keen economic historian's eye to the last century's sundry wars, conflicts and other catastrophes to examine how they affected the economies of both the principal combatants and the world at large. The moral of his tale, though hardly radical, is impressively detailed and convincingly argued: A strategy for the long term is the best way for traders (and ordinary investors) to build and maintain wealth...[Biggs'] air of scholarly detachment and lucid prose make Wealth, War & Wisdom worthy as both an economic primer and history seminar."-Trader Monthly, February 2008
“air of scholarly detachment and his lucid prose make [the book] worthy as both an economic primer and history seminar.” (Trader Monthly, March 2008)
“...completely relevant, indeed essential, to predicting the way modern financial markets and the economy will act during uncertain times…” (HereIsTheCity.com, Sat 8th March)
“His clear and lively writing style and his deep knowledge of markets and investments will entertain…as well as educate”. (Yahoo Finance, Tuesday 15th April 2008)
Review
"Barton Biggs is a brilliant, legendary and world-renowned wise man of finance. In this original and absorbing book, he combines his vast understanding of the world economy with his deep sense of history to bring us new, important and thought-provoking lessons from the crucible experience of World War II."-- Michael Beschloss
From the Inside Flap
World War II was a world war, and there was great uncertainty at the time whether Western Civilization would survive. But today, those dark years offer many relevant lessons—about life, politics, financial markets, wealth, and survival—that can help investors, both large and small, deal with adversity and difficult times. In Wealth, War & Wisdom, legendary Wall Street investor Barton Biggs reveals how the turning points of World War II intersected with market performance, and shows how these lessons can help the twenty-first century investor comprehend our own perilous times as well as choose the best strategies for the modern market economy. Biggs reveals how "the wisdom of the markets" prevails, even in the most turbulent of eras: the British stock market bottomed out just before the Battle of Britain; the U.S. market turned at the epic Battle of Midway; and the German market peaked at the high-water mark of Germany’s attack on Russia. Those events turned out to be the three great turning points of World War II—although at the time, no one and no instrument except the stock markets recognized them. Through these pages, Biggs skillfully discusses the performance of equities in both victorious and defeated countries, reveals how individuals preserved their wealth despite the ongoing battles, and explores whether or not public equities were able to increase in value and serve as a wealth preserver. Biggs also looks at how other assets, including real estate and gold, fared during this dynamic and devastating period, and offers valuable insights on preserving one’s wealth for future generations. Investors, unlike traders and speculators, must make long-term judgments about the course of events in economies and the world. Wealth, War & Wisdom provides a new and revealing context for such judgments. And its lively and lucid pages are completely relevant, indeed essential, to predicting the way modern financial markets and the economy will act during uncertain times that increasingly define this new century.
Customer Reviews
An unusual but very readable hybrid
This book is really three books in one: 1) an accessible political/military history of World War II; 2) a history of US/UK financial markets from the 1920s to the 1950s; 3) interspersed throughout, Barton Biggs's musings on history, markets, literature and other matters.
This was an unusual scope for a book, but I found that it worked well, thanks to Biggs's passion for the subject and tremendous gifts for storytelling. I am most interested in financial markets but found myself surprisingly captivated by his war narrative. As far as I am concerned, this is an ideal introduction to WWII for anyone looking to learn about the era.
As far as the material on markets goes, there were some very interesting points made on the so-called wisdom of crowds and ability of markets collectively to sense historical turning points. Well done and hopefully more to come from this author.
A financial view of history
Barton Biggs compresses centuries of world history, a phenomenal history of markets, and a heavy dose of investment theory into a very readable primer on how to protect your wealth in times of trouble. The book shows where losers fared ok (land kept it's value in WW2 France despite the trouble) as well as where investors did best in winning economies (example: the US). The book covers economic impacts of military decisions, where financial markets outsmarted public opinion, and where they failed. To keep the book interesting, there's a healthy dose of gossip.
The book closes with Barton's suggestions on the best means to act defensively for when the Barbarians approach the gates. He's heavy on equities, with other practical advice (buy a farm, keep your valuables at home, keep some money abroad in advance).
Is this the best history book you can find? Probably not. Is it the best investing book you can find? Again, probably not. Does the book intertwine finance, history and investing in an interesting manner? Most definitely.
Historical Support for the Wisdom of Crowds
It is an age-old notion. The investing public provides liquidity to the "smart money." A mainstay on every investor's bookshelf, Charles Mackay'sExtraordinary Popular Delusions and the Madness of Crowds, argues "men ... think in herds."
Barton Biggs, former chief global strategist at Morgan Stanley before leaving in 2003 to form hedge fund Traxis Partners, questions this conventional and pejorative notion in Wealth, War & Wisdom. Using World War II as a backdrop, he shows the equity markets in the United States, Britain, Germany and Japan identified the conflict's turning points with uncanny precision.
The stock market, he argues, represents the collective conclusion of multiple motivated judgment of a diverse, independent and decentralized sample. He joins James Surowiecki in The Wisdom of Crowds and Michael Maubossian in More Than You Know: Finding Financial Wisdom in Unconventional Places (Updated and Expanded), to plead a powerful case for paying attention to the markets' underlying message.
Biggs is no historian. He is, however, well-read and a deep thinker. He weaves military history, market action, maps and charts to illustrate his moral. Hardly radical, it is detailed and convincingly argued: A long-term strategy is the best way for ordinary investors to build and maintain wealth.
This is a book every serious investor should read and ponder. It is an original, absorbing and thought-provoking primer on wealth creation. Today's actions aggregated with others provide powerful clues to your financial future.
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