Aliber & Kindleberger – Manias Panics and Crashes 7th ed. Book review

In a nutshell (435 pages), this is as complete a history of, as the title claims, panics, manias and crashes in financial markets. I say financial markets and not the stock market because the timeline extends to way before the stock market, especially the stock market as we know it today. The book is a thorough and regularly updating of major accounts to educate the reader so that they might avoid falling for the same mistakes. If it’s true that history rhymes, this is a poem.

What I got out of it

It does not take the reader very long to see how people get into the sorts of messes they do. The main underlying issue is almost always a detachment from the general rules of good reason for some special justification. Another thing I really liked about the book is the correction of commonly held beliefs of some old stories like the famed Tulip Mania. Many stories are not what we believe them to be. They are unsurprisingly much more nuanced.

What was difficult

The book is relatively long to read. You really have to go into this book with a purpose of learning or you won’t enjoy it too much. It’s a very long 435 pages. Also, because the core mistakes resemble each other so much, it can become repetitive. This is not a fault of the authors, but of the people who cause/create the financial havoc.

Recommendation

Any one truly interested in learning true financial history, and anyone who wants a better understanding of the “New Thing” that always appears in one form or another should read this book. The better you understand and take on the lessons you learn, the better your financial life (and sleep) will be.