A Look Inside the Big Trade

Cramer recommends a fictional account of the trading world, partly because he witnessed firsthand the author's research.
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You want to step inside my trading room? You want to see how I would do a big trade? You want to see how I would make a killing?

Forget about it. I got enough people tramping through here already. And, believe me, I can't promise you a homicidal trade on demand. Anyway, my trading room is private, and, as I have already dunked myself into a financial fishbowl, it has to stay that way if I want to get any work done.

But I can tell you where you can get the next best thing: a new book,

Turn of the Century: A Novel

, by

Kurt Andersen

. For the longest time, when someone asked me about a book that would help him or her understand trading, I always referred to Andy Beyer's

Picking Winners

, a horse-racing book. The disciplines and skills that Beyer teaches are perfect for trading, and I haven't found a good nonfiction guide yet to recommend.

Now, however, I would just tell you to read

Turn of the Century

. Here's why: For almost six months, I gave Kurt Andersen the run of my trading room, allowing him to interview everyone -- he even spoke to

Berkowitz

because he wanted to know whether Berko existed or not -- and to sit in on the desk, listen to the phones, get a true picture of how a hedge fund works.

(I did this because Andersen is my friend, a partner, and because when the whole journalism world wanted my head for writing about stocks in 1995, Andersen gave me a break and let me come to work at

New York Magazine

, which he was editing at the time. If he hadn't, I would never have written another word professionally because I was so chastised by the press for trying to wear two hats. When he was subsequently fired even though the magazine was at a zenith both editorially and financially, for petty personal reasons by people who didn't have the guts to say so, I quit with him and started

TheStreet.com

, again with his inspiration and help. Journalists take note: That makes him a friend in my book, so you should read no further because I have now flashed my secret corruption hand signal. But everyone else can proceed with the knowledge that I am not going to attack Andersen to gain "credibility.")

I would not recommend the book if I thought it was a chore to read or if it didn't have more to it than trading. In fact, in

Turn of the Century

, the stock market prism is strictly a secondary plot line within a much larger story involving entertainment, the market and, of course, life.

But it was the story of a great trade, and how one awesome trader would have capitalized on it, that captivated me for its authenticity, down to the teenies. Andersen gets dialogue the way no one has since

O'Hara.

But unlike O'Hara, he is far less judgmental and bitter about the success of his characters. He listened well to the voices on my desk and saw every detail in his novel (without betraying any confidences because, of course, the character that does the trade is a fictional one who has little in common with me personally.)

Andersen doesn't stop with the zany nature of stock trading. He covers the whole roaring financial times that we now live through. Just as the movie

Wall Street

captured the corruption of the '80s stock market and

Bonfire of the Vanities

zeroed in on the Masters of the Universe in the same decade,

Turn of the Century

nails this market. The manic nature of the .coms, the foolishness of the rollups, the desires to please Wall Street analysts no matter what, can be found in these pages. (In fact, ironically, CEOs might want to read the book to figure out how to get a better stock multiple on their earnings.)

The Big Trade comes at the end, but you'll be teased throughout by the convergence among entertainment, finance, television and technology. When you get to the home run transaction -- a giant downside payoff -- pay careful attention to the use of puts and common stock. Notice how the

Ben Gould

character switches between common and puts depending on the time and conditions of the market. And watch how the stooge character, Hank, with the same info, totally blows the trade, a rank amateur fleeced by his own greed.

You can read all of the "how-to" stock market books that currently dominate the

Amazon 100

list and learn virtually nothing. Or you can read this book and get how the real game is played, so you'll be ready when you want to slam-dunk a stock. It doesn't get any more accurate, instructional or gripping than

Turn of the Century

.

James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund had no positions in the stocks mentioned, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column at

letters@thestreet.com.

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