Panic, Prosperity, and ProgressFive Centuries of History and the Markets
Wiley Trading 1. Aufl.
A detailed guide to financial market performance during financial crises With the financial markets seemingly careening from one crisis to another, it's vital for today’s investors and traders to have an historical perspective on market performance during times of great turmoil. In this book, Tim Knight provides an exhaustive analysis of financial market behavior prior, during, and following tumultuous events since 1600. Making copious use of charts and basic technical analysis, Knight demonstrates how external shocks tend to create extreme reactions in the financial markets and how these predictable reactions provide opportunities for investors and traders to profit. Knight traverses five centuries of financial market history, from Tulipmania in the 1600s to the contemporary sovereign debt crisis. He looks at each event from the prism of the financial markets, examining the market climate prior to the event, during the event, and following the event. Draws essential lessons from history providing investors and traders with guidelines to better navigate markets in today's tumultuous times Offers valuable insights on understanding and anticipating market responses to shocks and crises Companion website with a Q&A section contains charts from key moments in past financial crises and asks readers to choose whether to go long, short, or step aside If you're looking for a better way to make it today's dynamic markets, look no further than this timely book.
Preface ix Chapter 1 Tulip Madness 1 Chapter 2 The Mississippi Scheme 9 Chapter 3 The South Sea Bubble 29 Chapter 4 American Revolution in the Colonies 37 Chapter 5 The Panic of 1837 49 Chapter 6 California Gold 63 Chapter 7 The American Civil War 75 Chapter 8 The Panic of 1893 97 Chapter 9 The Rich Man’s Panic of 1907 113 Chapter 10 Billion-Dollar Bread—The Weimar Hyperinflation 131 Chapter 11 The Roaring Twenties 145 Chapter 12 The Great Depression 157 Chapter 13 Postwar Prosperity 189 Chapter 14 Energy, Politics, and War 199 Chapter 15 Precious Metals and the Destruction of a Billionaire 219 Chapter 16 Latin American Debt Crisis 245 Chapter 17 The Reagan Revolution and Crash 255 Chapter 18 The Rising and Setting Sun of Japan 269 Chapter 19 The Savings and Loan Debacle 295 Chapter 20 Fall of the Soviet Union 309 Chapter 21 The Asian Contagion 321 Chapter 22 Russian Crisis of 1998 339 Chapter 23 Captured by the Net 353 Chapter 24 The Great Recession 415 Chapter 25 History in the Making 443 About the Author 449 Index 451
Timothy Knight is a money manager and founder of www.SlopeofHope.com, a popular trading blog started in 2005 that is one of the most active forums for discussion among traders on the Internet. Previously, he was founder of Prophet Financial Systems, a web-based service that was bought by Ameritrade and was consistently rated the number one website for technical analysis by both Barron’s and Forbes. Prior to starting Prophet, Knight was vice president of technology products for Montgomery Securities and worked at Apple in Strategic Planning. Knight has traded for over 25 years, primarily using technical analysis and price charts as the basis for his decisions, and he owns and operates a short-bias hedge fund from his home town of Palo Alto, California.
Historical events move currencies, stocks, debt, and all other flavors of fiscal instrument, and likewise movements—particularly exaggerated movements—in the financial markets can drive the decisions that shape history in real time. —Tim Knight Those who ignore history are condemned to repeat it. Nowhere is the verity of that old adage more evident than in the financial markets, where human nature and the ebb and flow of world affairs routinely put the lie to the long-cherished—and wholly irrational—belief in rational markets. Now, more than ever, as today’s financial markets careen from one crisis to another, it is vitally important for investors and traders to develop an historical perspective on the behavior of the markets, and draw practical lessons from their behavior during times of financial turmoil and economic upheaval. A must read for all traders and investors, this book helps you to develop just such a perspective. With a scholar's thoroughness and a born storyteller’s talent for evoking a time and place and the characters who peopled it, top money manager and popular financial blogger Tim Knight takes you on a fascinating journey through five hundred years of the markets, from Tulipmania in 16th century Holland to today’s sovereign debt crisis. He makes copious use of charts and basic technical analysis to provide exhaustive analyses of financial market behavior prior to, during, and following tumultuous events. And he deftly demonstrates how external shocks lead to extreme reactions in the financial markets, how those reactions provided golden opportunities for savvy investors and traders to profit, and what you can learn from their examples. Many of today's most successful traders and investors credit their study of history as being the secret behind their uncanny ability to anticipate and capitalize on market responses to external events. Read Panic, Prosperity, and Progress and acquire the same competitive edge enjoyed by the likes of George Soros, Richard Dennis, John Paulson and other legendary money men.
An enthralling journey through five centuries of market history and the people and events that shaped it Traversing five centuries of financial market history—from Tulipmania in 16th century Holland to the Great Depression, from the Panic of 1893 to the Savings & Loan debacle of 1989, all the way through to today’s sovereign debt crisis—this book brings to vivid life some of the most fascinating and important episodes that have had an impact on the behavior of the financial markets since 1600. "Entertaining and fair minded towards the craziness of Wall Street and financial markets, Tim Knight takes a historical journey into the conflicts and quirkiness of five centuries of investing. Tim delivers a homerun with insider-like perspective and fun stories." —Tom Sosnoff, CEO, tastytrade "The names and places may be different and the investments in question may be unique—but the two ineluctably human variables that never change are basic fear and greed. Tim Knight takes this fact of market history and turns it into an investing lesson you cannot afford to miss." —Joshua Morgan Brown, author of The Reformed Broker blog and the book Backstage Wall Street "In an era of high-frequency trading and flash crashes, it might seem impossible that today’s traders have anything to gain from studying history. Yet Tim Knight’s Panic, Prosperity, and Progress makes a compelling argument that just as generals can still win battles by studying ancient wars, today’s traders can profit from the past." —Alex Soojung-Kim Pang, PhD, Senior Consultant, Strategic Business Insights "Greed unleashed in speculative bubbles; fear rampant during a market panic; opportunities emerging from technology innovation; valuation shifts created by political and social upheavals—these qualitative impacts on market movements have one characteristic in common: the repetition of history. Investors who are unaware of these predictable market moving trends are damned to suffer from them in the future. Tim Knight’s Panic, Prosperity, and Progress is a must read for investors at a time of historic and previously untested market interventions resulting from one of the most severe economic downturns in modern history. As documented by Tim in his latest book, these current historic market shifts will create opportunities and risks just as similar events have done repeatedly throughout history. Panic, Prosperity, and Progress is an investor guide to identifying and profiting from current market risks that every investor can take advantage of today." —Lee Barba, Former Chairman and CEO, thinkorswim Group