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Investing in stock markets is an everyday learning process, no matter how much experienced one may be or how much he or she may make. If anyone thinks that they have tamed the markets and know inside out on how to make money, market has its own way of delivering shockers or even sweet surprises. At the end of the day, it is a general consensus that market has the last word.
However, if one has to pick experience without theory or theory without experience, it is a very difficult choice. Both have their own standing in the world of investing.
Without the theory, one may not be able to make sense of the complex web of concepts involved in investing. However, Zerodha co-founder said he will always pick experience without theory over theory without experience.
Taking to Twitter, Nikhil Kamath recommended a book that talks about how the smartest people on the planet got together to theorize stock investing and lost everything.
In a book titled “When Genius Failed: The Rise and Fall of Long-Term Capital Management,” author Roger Lowenstein captures the gripping roller-coaster ride of Long-Term Capital Management.
Drawing on confidential internal memos and interviews with dozens of key players, Lowenstein explains not just how the fund made and lost its money but also how the personalities of Long-Term’s partners, the arrogance of their mathematical certainties, and the culture of Wall Street itself contributed to both their rise and their fall.
When it was founded in 1993, Long-Term was hailed as the most impressive hedge fund in history. But after four years in which the firm dazzled Wall Street as a $100 billion moneymaking juggernaut, it suddenly suffered catastrophic losses that jeopardized not only the biggest banks on Wall Street but the stability of the financial system itself.
In his new Afterword, Lowenstein shows that Long-Term Capital Management’s implosion should be seen not as a one-off drama but as a template for market meltdowns in an age of instability—and as a wake-up call that Wall Street and government alike tragically ignored.
The Book is available on Amazon at a price of ₹450.
Nikhil Kamath says one should research about the product or company and completely ignore the outside noise of people, marketing, branding and advertising etc.,
Kamath said it is a really easy read with the format pegged like a story with no complex equations involved.
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