Reddit Reddit reviews Devil Take the Hindmost: A History of Financial Speculation

We found 9 Reddit comments about Devil Take the Hindmost: A History of Financial Speculation. Here are the top ones, ranked by their Reddit score.

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Economics
Economic History
Devil Take the Hindmost: A History of Financial Speculation
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9 Reddit comments about Devil Take the Hindmost: A History of Financial Speculation:

u/wolfpack2421 · 11 pointsr/AskSocialScience

Two important factors are at work when it comes to bubbles:

  1. A bubble often appears as high level growth. P/E ratios can only do so much, and are useless if the price of a current asset is justified by an incredibly high future earnings growth factor. Microsoft in the 80s had an enormous P/E ratio, but it never popped because its future earnings eventually justified that ridiculously high price. You can only tell a bubble from high growth when the market realizes future earnings are not going to justify the price increase, and the price falls to correct itself. But by then the crash has already started and it's far too late.

  2. Even if one were to suspect an asset is bubbling, that does not mean its unprofitable or dangerous yet. The biggest difference between a bubble and real growth is that, in a bubble, at some point buyers are paying a high price for the asset simply because they know they can sell it to someone else at an even higher price. Savvy investors know the price cannot possibly justify earnings, but they feel someone else will still buy it before the market corrects itself. This is the greater fool theory. In that regard, it doesn't matter if someone recognizes the bubble; investors will still buy so long as someone else might buy higher.

    A good book on bubbles is Devil Take the Hindmost. It covers some earlier bubbles like the South Seas and the Dutch tulip market. Decent background reading on the historical aspects of these speculations.
u/mcantelon · 7 pointsr/reddit.com

>Why is engineering a collapse a profitable event?

It's hard to sell high when you can't buy low.

Short before the collapse, buy after the collapse.

There is the classic tale of how Mayer Rothschild amplified his fortune when England and France were at war. One of his businesses at the time was transport between the two countries. As a result he was the first to learn England had won the conflict. He started selling, fooling British traders into believing that England had lost against Napoleon. After the resulting collapse, he bought his fill for a song.

Devil take the hindmost. In the implosion of the American economy, the "hindmost" are the American people and countries like China that have bet heavily on the US dollar. You can be assured that the insiders will be high and dry when the inevitable is undeniable. After they kill this currency they'll no doubt offer a shiny new one, such as the Amero, in its place.

u/joydeepdg · 6 pointsr/IndiaInvestments

> the smartest people in the world and their collective knowledge is what makes up the stock market

Not really.

The market is made up of lakhs of people trying to outsmart each other. Humans, even experts, make bad decisions - and these bad decisions are made worse by emotions like greed, fear and envy when a lot of money is at stake.

> Doesn't the market "price in" everything?

Nope. There are a lot of unknowns. A steady rise in market prices makes everyone complacent. So complacent that they start ignoring the unknowns and start taking more risk. This is the sort of behaviour that leads to bubbles.

If you want to know more about market stupidity you must read Devil Take the Hindmost

u/Gaurav_Kuvera · 5 pointsr/IndiaInvestments

(2) A good starting point for an investor is -

- [Stocks for the long run](https://en.wikipedia.org/wiki/Stocks_for_the_Long_Run) Big takeaway - dont be scared of volatility. Stay the course and you will rewarded.

- [Random walk down wall street](https://www.amazon.com/Random-Walk-Down-Wall-Street/dp/0393330338) Big takeaway - true alpha is hard and other investors are equally smart so beating an index is not trivial.

- [Thinking Fast and Slow](https://en.wikipedia.org/wiki/Thinking,_Fast_and_Slow) Big takeaway - our biases are predictable and we can correct for them if we know them.

- [Devil Take the Hindmost](https://www.amazon.com/Devil-Take-Hindmost-Financial-Speculation/dp/0452281806) Big takeaway - risk is real.

Have purposefully kept it small and diverse. More than often people list 20 book and the task seems so overwhelming that a vast majority chooses to not even start.

u/ppc1040 · 3 pointsr/business

Well, first of all, there have always been booms and busts. Does that prove that there necessarily must be such a cycle? No, it is not complete proof, but it is compelling evidence that, no matter what the level of technology has been, no matter what the language or culture of the participants have been, and no matter what form of government they were under, the business cycle has always been around.

The other piece of the evidence is that attempts to remove booms and busts from the economy have failed miserably. Our own Fed, designed to do just that, has never been able to eliminate booms and busts from the cycle. They have tried, and had success in certain cases, but often their actions simply reshape the boom and bust cycle in new forms. Socialist economies suffer economic cycles. Communist countries certainly do, and in some cases, their booms and busts are even more exaggerated than those in market economies.


There are no "institutions" that can prevent this. It has to do with fundamental aspects of human nature:

  1. Humans are very bad at judging certain types of risk, especially financial risk

  2. We don't always act in our long-term, rational self-interest, and have a tendency to forget past mistakes ("This time things will be different")

  3. Efficient markets are often overpowered by the "wisdom" of crowds

  4. etc, etc


    So, the question you ask is far too broad. The onus is on you to educate yourself about this phenomenon. There are plenty of resources, but I suggest Devil Take The Hindmost and Against The Gods: The Remarkable Story of Risk.
u/Sabu113 · 2 pointsr/Economics

I know I shot the mods a message awhile ago before getting caught up prepping for the CFA (and they said would be ok via a blog since we don't have text posts).

I was wondering about some events to bring the board together.

Would people be interested in some monthly or bimonthly book discussion? Devil take the hindmost was a ton of fun and might make for some interesting reading. We could start running into problems again because not everyone has the same background going into the book but as long as people stay fairly intellectually honest I'm sure we don't go overboard with source links and it could be a neat discussion.

Alternatively, if people had opinions on different coursera courses etc. I had a classic econ focused education on monetary policy but I'm finding the economics of money and banking class on coursera to be a very, very cool way to look at the banking system.

u/Chadsius · 1 pointr/personalfinance

Devil Take the Hindmost - fun, readable book about the history of investment https://www.amazon.com/dp/0452281806/ref=cm_sw_r_cp_awdb_t1_xIpbBbSMEKR7X

The Boglehead's Guide to Investing https://www.amazon.com/dp/B00JUV01RW/ref=cm_sw_r_cp_awdb_t1_gKpbBbSYVVXS7 has a lot of practical info on wealth maximization through minimizing taxes, long term consistent debt such as frequent new car purchases, and general buy and hold investment strategies

https://www.amazon.com/dp/B0041842TW/ref=cm_sw_r_cp_awdb_t1_6LpbBb1PVZEMX solid, classic book about foundations for building wealth