Twelve classic tales from the world of wall street.
The bizarre move in Gamestop stock last week prompted me to read this book especially to understand a similar stock cornering incident that was executed by a single person. In 1923, Clarence Saunders the promoter of Piggly Wiggly stores was involved in a corner and had a very novel financial engineering attempt to finance it. Nick Maggiulli had done a detailed twitter thread on it (Read here) and recommended this book. One can also read the Barons article on the story. There is another stock cornering incident for control of EL Bruce & co which was a “natural corner” which i intend to read on.
Enjoy the Party, But dance near the door
The key learning from the Piggly wiggly story is that things don’t really end well for individuals and the institutions are able to at time tweak rules. If only the game stop investors had read about this, they would have figured out the end result of Gamestop move.
The book has some other stories on
- A coordinated action by an exchange to make good the losses for individual shareholders from a brokerage.
- The attempts to save the Sterling pound from bear attack.
- Federal income tax history and the peculiarities of the innumerable tax savings route for the smart people. Esops and Tax deduction for oil drillers.
- Insider trading in a mining company and the law thereafter.
- The ruling with respect to what constitutes trade secret and how are employees in knowledge industry impacted.
- The story of xerox – which is very similar to new age startups.
Some Interesting quotes:
Every dog has one free bite. A dog cannot be presumed to be vicious until he has proved that he is by biting someone. A man should not be prevented from taking a job simply because the job presents his with unique temptations to break the law.
Wall street got licked and then called for “mamma”. (institutions pleading to regulator to intervene when they are on the wrong side of a short squeeze)
In 1913, individual income tax was enacted from 1% to 7%. In 1918, owing to world war 1, tax rate was 6% to 77%. In 1925, tax ranged from 1.5% to 25%. In 1944-45, tax ranged from 23% to 94%.
PS: First time tried Audio book . It is a good usage of evening walks but i end up losing on making bookmarks.