The go-go years

The Go-Go Years is the history of Wall Street during the tumultuous 1960s, which saw the DJIA only briefly above 1000. This book's players include H. Ross Perot (who, according to the author lost more than $650,000,000 when the market fell at the end of the decade), conglomateurs like Ling-Temco-Vogt's Jimmy Ling, Gulf + Western's Charles Bluhdorn, and IT & T's Harold Geneen, and Peter Lynch's predecessors at Fidelity, Ned Johnston and Gerry Tsai. One interesting fact: in the latter part of the decade, the NASD closed early on Wednesdays to give the back offices of the brokerage firms time to settle trades.

This book begins and ends with a rather peculiar hero from Texas, H. Ross Perot, who during the smashing sixties built up a phenomenal growth company, watched a phenomenal sum of equity wealth evaporate before his eyes in a single day, and later played the role of the white knight saving a rather fickle (and foolish) damsel in distress- Wall Street's Patrician securities industry. All in all, the book took a very high-brow snapshot of one brief but heady period of financial history orchestrated and overseen by very low-brow types masquerading as new wealth Gatsbys, high performance quants, hot-hand gunslingers, and (anything but) 'Proper' Bostonian businessmen. It is an odd mix relayed to us in the droll but refined and witty style of the late Mr. Brooks. They say that history repeats itself, and this book is Exhibit A. All of the ills of today can be found within its pages chronicling yesterday- corporate hucksters and frauds, technology stock enthusiasts, drugs (hard and soft, legal and illegal) on The Street, hot-today-but-gone-tomorrow fund pros, and a whole host of other ills. Change the names, dates and places and one would think that one is reading today's news. My favorite part of the book is the old refrain that all whistleblowers inevitably hear, and occurs on page 45 of the second chapter entitled 'Fair Exchange' (again, now as well as then, anything but). The regulator asks our erstwhile whistleblowing hero, "Now what do you know about what's going on upstairs?" Thoughts of Enron and MCI, Tyco and the FBI spring readily to mind... While Peter Lynch lures the gullible investor with the notion that the novice has an advantage over the professional, Mr. Brooks, after recalling 355 pages of bawdy and rapacious greed and gambling during the 1960s Go-Go years, admonishes the reader with the following words of caution: "Thus, in the nature of things, the amateur investor remains and probably will remain at a certain disadvantage in relation to the professional. Perhaps his best protection is knowledge of that fact itself." Plus ca change, as the French say, or, the more things change the more they stay the same. There is really nothing new in the 'creative accounting' adopted, the wholesale manipulation of naive investors, stock price manipulation, and mind-boggling messes in both corporate boardrooms and so-called 'securities boutiques'. The financial dance always begins and ends in the same way, with the same old characters screaming for blood, the same old participants battered, bruised and bloodied, and the same tired old refrains for reform. And yet the dance begins anew, the past a dim and bittersweet after-taste. Though somewhat difficult to read because of the author's high brow presentation style, it nonetheless deserves to be read for both enjoyment and enlightenment. All of the usual suspects and standard props of financial foolishness throughout the ages will be found here, but the characters who peppered this pa

"The Go-Go Years" is a largely a collection of New Yorker magazine articles (and some pieces written especially for the book) by John Brooks, who in it covers a crucial period in the history of Wall Street, the 1960s, which includes the rise of conglomerates, mutual funds, and hedge funds, i.e. players at the heart of our economic situation today. Reading this book is instructive for that alone.But the book is far more than a prescient account of today's market forces. It's a vivid rogues gallery of people who rode the tides of fortune, had their days at the crest of their profession, and then fell back. Some, like stockpicker extraordinaire Gerald Tsai, the first Asian to rise to NYSE prominence, were undone by fortune and circumstance. Other less savory characters had only themselves to blame.There's an early look at Ross Perot, described vividly at the book's outset as losing a half-billion in a single day (April 22, 1970) and more or less shrugging it off. Perot's priorities were solid and he knew what he was about. Not so Eddie Gilbert, "The Last Gatsby" as Brooks calls him, who parlays small victories into outrageous defeats, dragging along a coterie of privileged friends into more and more nefarious investment schemes. Brooks sees Gilbert's get-rich-quick attitude as too emblematic of Wall Street in the 1960s, and his narrative never tires of pointing these out.Brooks' elegant prose has a way of leaping out at you without disrupting the narrative flow. About the trend for all investment strategy to come unglued: "The dumb money could take bitter comfort in the company it had among the smartest of the smart money - or former money." On Tsai: "...so swift and nimble in getting into and out of specific stocks that his relations with them, far from resembling a marriage or even a companionate marriage, were more often like that of a roué with a chorus line." On the numerous bailouts undertaken by the Street as the '60s went sour: "Save the broker in order to serve the customer: it was Wall Street's version of the trickle-down theory."Brooks's writing feels timeless. His is a lapidary style of almost accidental eloquence, blending facts in a seamless way as he tells his tale. It's like Roger Angell's baseball writings for the same magazine - I kept thinking about Angell's great essays in "The Summer Game," which focuses on roughly the same period as "The Go-Go Years," albeit on a different sport.While Brooks's disapproval with Wall Street in the 1960s is obvious, and his genteel liberal disdain for a status quo that allows the market to manage itself shows up now and again, he never loses his focus on the people, and allows them to breathe in his narrative. He doesn't quote from them much, but he obviously spoke to many of the principals at length and weaves their insights into the story. As much as the then-nascent trend toward conglomeratization bothers him, he allows himself to show some sympathy for one of its more outrageous practitioners,

Wiley Investment Classics typically fall into two categories, fascinating troves of banking wisdom that are well-written and insightful, and painful diatribes that while full of good intention are best put on the shelf for display. "The Go-Go Years" is definitely the former - this is an incredibly well written book about what has really become one of the forgotten times in American financial history. While the booom of the 1920's and resulting crash, as well as the excess of the 1980's are frequent subjects of many financial authors, Brooks has picked a relatively infrequently discussed portion of our financial history, the booming 1960's and the resulting crash of the early 1970's.There are many outstanding sections of the book; the introduction to Ross Perot in the first chapter, the history of Gerald Tsai and Fidelity, the rise and fall of the conglomerates, the description of the back-office and its staff, and finally the description of Wall Street that begins Chapter 5, which is without question the best description of the area ever written. These few pages (104 - 111) are simply an outstanding piece of prose.There are just too many good things about this book to fit into a 1,000 word review. Too many of the lessons from only 40 years ago are maddeningly similar to the lessons many dot-com and IPO investors are learning now, and the structure and actions of many Wall Street establishments are all too easily explained with this simple peace of previously "missing" history. If you are up to date on the current view of the 1929 collapse, and the bull market of the 1980's, then this is the book that goes a long way towards filling out the major events that shaped the markets in the interim.Go read this book.Favorite Excerpts:"Goaded by stock underwriters eager for commissions or a piece of the action owners of family businesses from coast to coast - laundry chains, soap-dish manfacturers, anything - would sell stock in their enterprises on the strength of little but bad news and big promises." - Brooks (page 28)"Some accused him of being a habitual liar; they forgave him because he seemed geniunely to believe his lies, especially those about himself and his past." - Brooks (page 63)"In the nineteen twenties, Wall Street's last great era before the present one, it was a kind of super university as well as a marketplace." - Brooks (page 105)"'We were all sheep,' one of them would admit, sheepishly, years later." - Brooks (page 120)"A smooth operator with a streak of the gambler; a company more interested in attracting investors than in making real profits; the resort to tricky accounting; the eager complicity of long-established, supposedly conservative investing institutions; the desperation plunge in a gambling casino at the last minute; the need for massive central-banking action to localize the disaster; and finally, reform measures instituted too late - we will see all of these elements reproduced with uncanny faithfulness in United Stat

"The Go-Go Years" is enlightening and entertaining as all good history writing should be. Today's stock market sounds eerily like the Wall Street of the 1960s as described by Brooks. Some might say that the Internet Economy is so different from the past, that even unprofitable Internet companies justify sky-high valuations. They said similar things about the "go-go" growth stocks back in the 1960s -- until the "go-go" stocks failed to meet their growth promises and the market crashed, with investors losing billions. Anybody who even contemplates buying Internet stocks should read this book first... Also look for the hilarious and prophetic descriptions of H. Ross Perot circa 1970.