Category Archives: Book review

Atlas Shrugged in one chart

I spent the last weeks, among other things, reading Ayn Rand’s Atlas Shrugged. Then I spent a few minutes making a chart about it. Enjoyed the latter more.

I finished Atlas Shrugged. Here it is IN ONE CHART Atlas Shrugged in one chart

No. Not a fan.

George Orwell on ‘history is written by the winners’

Via Brad DeLong here is George Orwell writing in February, 1944. As an economic historian(ish, to be) this is spot on, so here is me copy-pasting:

When Sir Walter Raleigh was imprisoned in the Tower of London, he occupied himself with writing a history of the world. He had finished the first volume and was at work on the second when there was a scuffle between some workmen beneath the window of his cell, and one of the men was killed. In spite of diligent enquiries, and in spite of the fact that he had actually seen the thing happen, Sir Walter was never able to discover what the quarrel was about; whereupon, so it is said — and if the story is not true it certainly ought to be — he burned what he had written and abandoned his project.

This story has come into my head I do not know how many times during the past ten years, but always with the reflection that Raleigh was probably wrong. Allowing for all the difficulties of research at that date, and the special difficulty of conducting research in prison, he could probably have produced a world history which had some resemblance to the real course of events. Up to a fairly recent date, the major events recorded in the history books probably happened. It is probably true that the battle of Hastings was fought in 1066, that Columbus discovered America, that Henry VIII had six wives, and so on. A certain degree of truthfulness was possible so long as it was admitted that a fact may be true even if you don’t like it. Even as late as the last war it was possible for the Encyclopedia Britannica, for instance, to compile its articles on the various campaigns partly from German sources. Some of the facts — the casualty figures, for instance — were regarded as neutral and in substance accepted by everybody. No such thing would be possible now. A Nazi and a non-Nazi version of the present war would have no resemblance to one another, and which of them finally gets into the history books will be decided not by evidential methods but on the battlefield.

During the Spanish civil war I found myself feeling very strongly that a true history of this war never would or could be written. Accurate figures, objective accounts of what was happening, simply did not exist. And if I felt that even in 1937, when the Spanish Government was still in being, and the lies which the various Republican factions were telling about each other and about the enemy were relatively small ones, how does the case stand now? Even if Franco is overthrown, what kind of records will the future historian have to go upon? And if Franco or anyone at all resembling him remains in power, the history of the war will consist quite largely of “facts” which millions of people now living know to be lies. One of these “facts,” for instance, is that there was a considerable Russian army in Spain. There exists the most abundant evidence that there was no such army. Yet if Franco remains in power, and if Fascism in general survives, that Russian army will go into the history books and future school children will believe in it. So for practical purposes the lie will have become truth.

This kind of thing is happening all the time. Out of the milions of instances which must be available, I will choose one which happens to be verifiable. During part of 1941 and 1942, when the Luftwaffe was busy in Russia, the German radio regaled its home audiences with stories of devestating air raids on London. Now, we are aware that those raids did not happen. But what use would our knowledge be if the Germans conquered Britain? For the purposes of a future historian, did those raids happen, or didn’t they? The answer is: If Hitler survives, they happened, and if he falls they didn’t happen. So with innumerable other events of the past ten or twenty years. Is the Protocols of the Elders of Zion a genuine document? Did Trotsky plot with the Nazis? How many German aeroplanes were shot down in the Battle of Britain? Does Europe welcome the New Order? In no case do you get one answer which is universally accepted because it is true: in each case you get a number of totally incompatible answers, one of which is finally adopted as the result of a physical struggle. History is written by the winners.

In the last analysis our only claim to victory is that if we win the war we shall tell fewer lies about it than our adversaries. The really frightening thing about totalitarianism is not that it commits “atrocities” but that it attacks the concept of objective truth; it claims to control the past as well as the future. In spite of all the lying and self-righteousness that war encourages, I do not honestly think it can be said that that habit of mind is growing in Britain. Taking one thing with another, I should say that the press is slightly freer than it was before the war. I know out of my own experience that you can print things now which you couldn’t print ten years ago. War resisters have probably been less maltreated in this war than in the last one, and the expression of unpopular opinion in public is certainly safer. There is some hope, therefore, that the liberal habit of mind, which thinks of truth as something outside yourself, something to be discovered, and not as something you can make up as you go along, will survive. But I still don’t envy the future historian’s job. Is it not a strange commentary on our time that even the casualties in the present war cannot be estimated within several millions?

What We’re Reading

Book Review: Money Mavericks, Confessions of a Hedge Fund Manager

I recently read Money Mavericks by Lars Kroijer, a former (Danish) hedge fund manager. Stepping a little back from the action in financial markets and economics for a moment, I thought I’d share my impressions with you. This is something we’re going to do whenever we read something great in book format.

51tDrG2hiWL. SS500  300x300 Book Review: Money Mavericks, Confessions of a Hedge Fund ManagerThe book is the story of how Lars started his hedge fund, Holte Capital, his career, all the troubles, and the successes. Where the book stands out from the other hedge fund books is that it’s actually quite funny. From the beginning, one gets the sense of how it is to start a hedge fund, and that it is not the quick journey to becoming a millionaire.

Lars went to high school in Denmark, but moved to Boston where he got into Harvard (after a stint at University of Mass.). After that, he went to work for two years as an Analyst at Lazard, which is a boutique investment bank. He writes that they had an excel document where they kept track of when they were done with the position (an Analyst position is typically around 2 years) with more than two decimals so that something happened every day. A work week of 100 hours is apparently not that great. After Lazard, he went back to Harvard Business School to get a MBA, and from then on the hedge fund career started. He worked at SC Fundamental and HBK Investments before quitting to start Holte Capital.

Now, setting up your own hedge fund is not easy. Without some serious start-up capital, its not possible. To see why, here is a picture of the structure from the book:

photo 1 1024x764 Book Review: Money Mavericks, Confessions of a Hedge Fund ManagerIn the book, he estimates the legal and start up fees to be $250.000, and that’s at the stage when one doesn’t know if the fund is ever going to get investors. That’s risk.

What makes the book worth reading is the honesty and small stories from the start up phase. One really gets how hard it is to get through, but it is actually all the small flaws and mistakes that make Lars come out as a great fund manager that really cares for his investors. One of the great chapters is Chapter 12, “A Day In The Life Of” where he depicts a random day running a hedge fund, and the ups and downs during a day. Psychology has a lot to say, and that becomes clear when one reads how his P&L goes up and down and the urge to check it every minute.

All the small stories, of how he escaped to the gym during his time at Lazard, or how he wanted to look busy at a fundraiser in France with a lot of other fund managers, make the book worth reading, and you really feel the pain of the downs and the glory of the ups.

The final chapters examine hedge funds and their role. I can easily see some of the points, and maybe I’ll be better able to understand some of them as I grow older. The entrepreneurial part — which is a theme throughout the book — is something I can relate to more easily, though.

It’s a fun and easy read — definitely recommended if one wants to know how it is to start and run a hedge fund — with all the ups and downs it brings along.