Barton Biggs is back on the bookshelf with a follow-up to his 2006 bestseller Hedgehogging. In that book, the famed hedge fund manager and investment guru details the nitty-gritty of Wall Street life.
His new effort,
To test that idea, or perhaps to demonstrate it, Biggs guides the reader through a historical review of the great battles of the 20th century, mainly those from World War II.
For those not steeped in military history, he provides short outlines of what happened to the British at Dunkirk, how the Battle of Britain was fought, the German expedition into Russia, and the naval battles between the U.S. and Japan, to name but a few.Along with these potted tales of military valor, he checks to see if the twists and gyrations of the conflicts were mirrored in the performance of local stock markets. For the most part, the results are startlingly good. Many market indices seemed to turn in lockstep with military fortune even when a change in luck wasn't clear to the military leaders involved. That market prescience is all the more impressive given pervasive secrecy about military matters and the rudimentary communications equipment available at the time. The French, as ever, seem to have sung a different tune. As Biggs explains it, they gave up on Britain in 1940 -- probably the United Kingdom's darkest hour -- and believed German rule would be profitable for them. As a result, their stock markets rallied, for a while at least. The other main thrust of Biggs' book is an examination of how wealth was preserved over long periods of time and what assets were worth holding when society collapsed. The results are interesting. The general thrust was a thumbs-up for stocks, although it's clear that some periods were devastating. During dire periods, gold appears to have been one of the best things to hold. But Biggs also points out that in the chaos following the defeat of Germany, there were times when clothing and food held much more value than any number of shares or any weight in gold. "You couldn't eat stock certificates, and food was what people had to have to survive," he writes. One telling comment late in the book alludes to the real value of intellectual capital. "Perhaps brains or a skill are the most portable and best wealth preserver," he notes. And that diversity of answers is perhaps the main takeaway from the book: Nothing is forever. History buffs and investors alike would do well to get a copy. However, there are some wrinkles that detract from an otherwise solid piece of work. Not least of which is Biggs' comparison of Nazi leader Adolf Hitler with a much loved U.S. politician. "No national leader in modern times with the possible exception of Ronald Reagan has had his