Reviewed by Robert Wenzel
Janet Tavakoli, a financial expert and president of Tavakoli Structured Finance, has delivered to Wall Street traders and investors a gem of a book by being instrumental in the republishing of William Worthington Fowler's Twenty Years of Inside Life in Wall Street or Revelations of the Personal Experience of a Speculator.
There is little that is more important for traders and investors than to study the history of financial activity, to get as close as possibile to the booms and busts of days gone bye to learn exactly how the stock and commodity trading activity developed during different periods and the atmosphere of those times.
Fowler traded markets from 1860 to 1880. The period included the Civil War, the post-war bubble, worthless paper money, the Black Friday Gold Panic of 1869, the Great Panic of 1873, and the Great Depression of 1873-1880.
His writing on trading activity during this period is the best there is. Probably the best of any period. Indeed, as Tavkoli writes in the foreword to the book, the traders' classic Reminiscences of a Stock Operator pales in comparison.
Twenty Years is must reading for any serious trader or investor.
Fowler knew all the major traders of his day, including Jay Gould, James "Diamond Jim" Fisk, Jr., Cornelius Vanderbilt and Daniel Drew. He introduces us to all of them and provides us with insights as to how they operated. It is all recounted here,the great corners, the trading rings, the conspiracies, the bear twists, the manipulations, and the frauds.
The fundamentals of markets never change and so you will recognize much of what occurred in the recent financial crisis and the Great Recession as not all that much different from what occurred during the period of Fowler's reporting.
There is sure to be much volatility in the markets in the years ahead. Read this book to learn how Fowler, Gould, Fisk, Vanderbilt and Drew traded the volatility of their period, learn what trades worked and which ones didn't.
This is a great book on trading, I know of none better.
Robert Wenzel is Editor & Publisher at EconomicPolicyJournal.com and at Target Liberty. He is also author of The Fed Flunks: My Speech at the New York Federal Reserve Bank. Follow him on twitter:@wenzeleconomics