Biggs on Finance, Economics, and the Stock Market

BARTON BIGGS was a well-known figure in the investment world. Before running multi-billion- dollar hedge fund Traxis Partners, Biggs spent three decades as a senior partner at Morgan Stanley. Biggs was selected 10 times for Institutional Investor's "All-America Research Team," and made over 300 television appearances before he passed away in 2012.

• Introduction xiSection 1: What’s Old is New Again 1Section 1A: Market History and the Long View 3In Search of History and a Word Processor That Works 3Kondratieff and the Long Cycle 5The Phony War 9Ancient History 12History, Market Deaths, and the Cult of the Equity 16Section 1B: Fire and Ice 21The Fire and Ice Debate 21Ice Creeps On 26A World Lit Only by Fire? 29Section 1C: Bubbles and Panics 33Manias, Panics, Crashes 33Tulipomania 36Anarchy 39Life on the Good Ship Swine 43The New New Thing 46When? 50Section 1D: Wars and Rumors of War 55The Last Supper 55The Beam That Broke the Camel’s Back 59Bioterrorism and the Case for Higher P/E Ratios? 61Section 1E: Geopolitics 65Popcorn and the Decline of the West 65Diary of Mikhail S. Gorbachev—Sunday, May 4, 1986 69Close-Up 72Diary of Mikhail Gorbachev, May 1987 75The Diary of Deng Xiaoping: Wistful and Wishful Musings 78Bottomless Pits and Nuts with Missiles 81Diary of Saddam Hussein 83Islamic Fundamentalism 86Section 2: Economics and Investing 91Section 2A: Economics and Policy 95The Evolution of the Supply Side 95The Tax Cut Misconception 98Running the Movie of the Seventies Backward 100The Piper Must Still Be Paid 103The Old President with the Right Intuitions 116What Kind of People are We? 119Emerging Markets are Only for the Brave 122Section 2B: Investment Discipline & Tactics 127Discipline and Reading 127How to Lose the Winner’s Game 130You Gotta Believe 133Section 2C: Market Psychology and Investing Philosophy 135Contrarianism 135Electronic War Rooms and Lying in the Sun 140God is a Mathematician? The Fibonacci Numbers 143Beware of Linear Thinkers: Chaos on the Upside 146How George Soros Makes Money: The Theory He Says Guides Him 148The Horse Whisperers 151Mr. Market is a Manic-Depressive 155Section 2D: Alternative Investments 159Filthy Lucre 159The Bull Market in Art: Mania or Magnificent Obsession? 162Jewelry is a Girl’s Best Friend 165Section 2E: Market Predictions 169First Class on the Titanic 169“It’s a Bull Market, You Know . . .” 171Beware the Conventional Wisdom . . . 175Dear Diary: Up with Which I Have to Put 177Praise the Lord and Pass the Ammunition 180“Even Monkeys Fall from Trees” 183Big Fish Do Not Live in Small Ponds 188Section 3: The Global View 193Section 3A: China and Hong Kong 197Buy Hong Kong 197Own Hong Kong Big 201More on China 204China: “The New Emperors” and the Risk/Reward Equation 208How Fast is China Really Growing? 212China Tales 215A China Traveler’s Tales 218China Cooling, Us Heating 221Section 3B: India 225India Tilts to the Right and the Stock Market Explodes 225India for the 1990s 228Great Expectations 231India: You Have to Go There to Understand 234Section 3C: Japan 237More on Japan 237Long Trips 240Japan Inc. Wants a Higher Yen 242Japan Bought High and Will Sell Low 245Section 3D: Europe, Middle East, Africa 249In the Eye of the Storm 249You Gotta Own Some Germany 253Militant Fundamentalism Spoils the Middle East Story 256Section 3E: Latin America 259South America for the Nineties 259No More Siestas 263Argentina: The Magic Show 268Buy Mexico and Brazil 271Case Study: Peru 275Mexico Will Make It 278Mexico: Virtuous or Vicious Circle? 282Brazil: An Act of Faith 286Section 3F: East Asia 289The Best-Managed Country in the World 289Korea: Fat Premiums, Thin Pickings 293Camelot 296Letter from Myanmar 299Victory Has a Thousand Fathers 302Section 3G: Emerging Markets Roundup 307A Bigger, Faster World 307Jewel in the Portfolio 311Section 4: Characters and Culture 315Section 4A: Lunches with Luminaries 317Investment Alchemy 317Lunch with the Global Investor 321Vanity Fair 325Heroine Worship 327Poker Games on the Titanic and Sir John 330Section 4B: Jim the Trigger 333The Summer of 83 333The Trigger Comes Back for Lunch 336U3 or “Many Shall Be Restored That are Now Fallen and . . .” 339The Trigger Finds an Arb 341The Trigger Comes to Lunch 344Investment Life Its Own Self 347A Country of His Own 350Talking Technology with Jim the Trigger 354Section 5: Travelogues 359Africa 361The Idaho High Country 364Making a New High on Your Own Time 367Stretching the Mid-Life Envelope 370Japanese Landscapes 373The Snows of Kilimanjaro 377Pitfalls in Tokyo, Sand Traps in Colorado 381Section 6: Books and Letters 385Section 6A: Book Reviews 387“Groupthink” and What to Do about It 387Captain Money and the Golden Girl Ponzi 391The Alchemy of Finance 395I Wish We Didn’t Have to Play for George Steinbrenner 398Noise and Babble 401Section 6B: Biggs’s Reading List 405Too Much to Read 405“Books, We Know, are a Substantial World . . .” 408