Inventing Money : The Story of Long-Term Capital Management and the Legends Behind It

Customer Reviews

"When delta-hedging a call option in this way, the dealer
is having to play catch up - buying the index after it
has risen, and selling after it as (sic) fallen. The
strategy always loses money over the life of the option
- as it must, because it is simply the option's mirror
image. By the law of no-arbitrage, this loss when added
up over the entire garden of forking paths, must be equal
to the premium charged for the option."

Now consider page after page after page of such explanations. One gets the sense that Dunbar - a physicist with an interest in quantum mechanics and black holes - seems more interested in hearing himself speak than in whether any of his readers are still interested, and by the end of the book, its doubtful that many are.

The story of LTCM's rise and fall is fascinating. In his book "When Genius Failed", Roger Lowenstein has done an excellent job of telling the story of the players and the events, though, perhaps aware of the extremely complicated nature of the topic, has avoided trying to explain the story in any depth from a financial perspective. While Dunbar can be commended for making an attempt, he unfortunately fails miserably n his effort to deliver a comprehensible and readable story. One can only wish that someone with John McPhee's skills for explaining complicated topics in understandable terms would take up the task.

Overall, I enjoyed reading a lot. Good job!

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