If you’ve ever had the feeling that the system is out for itself at your expense, well, look no further. A riveting,...

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FLASH BOYS

A WALL STREET REVOLT

In trademark Lewis (Boomerang: Travels in the New Third World, 2011, etc.) fashion, a data-rich but all-too-human tale of “heuristic data bullshit and other mumbo jumbo” in the service of gaming the financial system, courtesy of—yes, Goldman Sachs and company.

That stuff you see on TV about dinging bells and ulcer-stricken traders pacing the floor of the New York Stock Exchange? It’s theater. The real speculative economy lives invisibly in little wires that go to nodes in out-of-the-way places, monitored by computer, shares bought and sold by algorithm. If you send a sell order, it might get intercepted for a fraction of a second by an intermediary that can manipulate the order to squeeze off one one-hundredth of a penny in profit—small on the individual level but big when you consider the millions of trades made every day. Both the system and that process are considerably more complex than that, but this fact remains: It dawned on someone that a person could grow rich laying ever faster optic cables to selected clients, cutting deals with the governments of towns and counties “in order to be able to tunnel through them,” all perfectly legal if not exactly in the spirit of the market. Lewis follows his tried-and-true methods of taking a big story of this sort and deconstructing it to key players, some on the inside, some on the outside, at least one an unlikely hero. In this case, that unlikely hero is an exceedingly mild-mannered Japanese-Canadian banker who assembled a team of techies and numbers nerds to track the nefarious ways of the HFT world—that is, the high-frequency traders and the firms that engaged in “dark pool arbitrage” as just another asset in their portfolios of corruption.

If you’ve ever had the feeling that the system is out for itself at your expense, well, look no further. A riveting, maddening yarn that is causing quite a stir already, including calls for regulatory reform.

Pub Date: March 31, 2014

ISBN: 978-0-393-24466-3

Page Count: 288

Publisher: Norton

Review Posted Online: April 3, 2014

Kirkus Reviews Issue: May 1, 2014

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BEATING THE STREET

More uncommonly sensible investment guidance from a master of the game. Drawing on his experience at Fidelity's Magellan Fund, a high- profile vehicle he quit at age 46 in 1990 after a spectacularly successful 13-year tenure as managing director, Lynch (One Up on Wall Street, 1988) makes a strong case for common stocks over bonds, CDs, or other forms of debt. In breezy, anecdotal fashion, the author also encourages individuals to go it alone in the market rather than to bank on money managers whose performance seldom justifies their generous compensation. With the caveat that there's as much art as science to picking issues with upside potential, Lynch commends legwork and observation. ``Spending more time at the mall,'' he argues, invariably is a better way to unearth appreciation candidates than relying on technical, timing, or other costly divining services prized by professionals. The author provides detailed briefings on how he researches industries, special situations, and mutual funds. Particularly instructive are his candid discussions of where he went wrong as well as right in his search for undervalued securities. Throughout the genial text, Lynch offers wry, on-target advisories under the rubric of ``Peter's Principles.'' Commenting on the profits that have accrued to those acquiring shares in enterprises privatized by the British government, he notes: ``Whatever the Queen is selling, buy it.'' In praise of corporate parsimony, the author suggests that, ``all else being equal, invest in the company with the fewest photos in the annual report.'' Another bull's-eye for a consummate pro, with appeal for market veterans and rookies alike. (Charts and tabular material— not seen.)

Pub Date: March 1, 1993

ISBN: 0-671-75915-9

Page Count: 320

Publisher: Simon & Schuster

Review Posted Online: May 20, 2010

Kirkus Reviews Issue: Jan. 1, 1993

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Striking research showing the immense complexity of ordinary thought and revealing the identities of the gatekeepers in our...

THINKING, FAST AND SLOW

A psychologist and Nobel Prize winner summarizes and synthesizes the recent decades of research on intuition and systematic thinking.

The author of several scholarly texts, Kahneman (Emeritus Psychology and Public Affairs/Princeton Univ.) now offers general readers not just the findings of psychological research but also a better understanding of how research questions arise and how scholars systematically frame and answer them. He begins with the distinction between System 1 and System 2 mental operations, the former referring to quick, automatic thought, the latter to more effortful, overt thinking. We rely heavily, writes, on System 1, resorting to the higher-energy System 2 only when we need or want to. Kahneman continually refers to System 2 as “lazy”: We don’t want to think rigorously about something. The author then explores the nuances of our two-system minds, showing how they perform in various situations. Psychological experiments have repeatedly revealed that our intuitions are generally wrong, that our assessments are based on biases and that our System 1 hates doubt and despises ambiguity. Kahneman largely avoids jargon; when he does use some (“heuristics,” for example), he argues that such terms really ought to join our everyday vocabulary. He reviews many fundamental concepts in psychology and statistics (regression to the mean, the narrative fallacy, the optimistic bias), showing how they relate to his overall concerns about how we think and why we make the decisions that we do. Some of the later chapters (dealing with risk-taking and statistics and probabilities) are denser than others (some readers may resent such demands on System 2!), but the passages that deal with the economic and political implications of the research are gripping.

Striking research showing the immense complexity of ordinary thought and revealing the identities of the gatekeepers in our minds.

Pub Date: Nov. 1, 2011

ISBN: 978-0-374-27563-1

Page Count: 512

Publisher: Farrar, Straus and Giroux

Review Posted Online: Sept. 4, 2011

Kirkus Reviews Issue: Sept. 15, 2011

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