|A rollicking way to get
By David Wells
Published: September 9 2004 05:00 | Last updated: September 9
a book by its cover may be considered ill advised, but in the case
of Andy Kessler, his books really do what the title says they
Kessler's first book, Wall Street Meat - My Narrow Escape
from the Stock Market Grinder, described his time served as an
equity analyst in the 1990s. The cover featured a bull with a
diagram of butcher's cuts labelled "Jack Grubman, Frank Quattrone,
Mary Meeker, Henry Blodget and me!" superimposed. His latest,
Running Money: Hedge Fund Honchos, Monster Markets and My Hunt
For the Big Score, describes his time as a hedge fund manager
during the internet/telecommunications bubble that popped in 2000.
The cover again features a bull, resembling even more closely the
famous bronze statue on Wall Street.
The new title is catching. One can just hear Wall Street
denizens who have read the required titles - Liar's Poker, Den
of Thieves and Barbarians At the Gate - asking each
other if they have read Running Money yet.
But the most helpful part of the title is in parentheses - "a
Wall Street education". Kessler's book is both a description of
his own Wall Street education and a stab at educating the reader
about subjects including not just Wall Street but also Silicon
Valley and, yes, managing a hedge fund.
Running Money is part memoir and part textbook. The
author was lucky enough in his career to have had good seats to an
interesting part of recent economic history. He was also smart
enough to take notes and he is talented enough as a storyteller to
make it worth revisiting that heady time at this early stage.
Educated to be an electrical engineer, Kessler worked a stint
at Bell Labs and ended up an equity analyst for Morgan Stanley
covering technology companies. Then, with Fred Kittler, an ex-JP
Morgan money manager, he ran Velocity Capital, a hedge fund based
in Silicon Valley which they wisely disbanded by August 31,
Kessler is a breezy, conversational - often sarcastic - writer.
His prose is perfect for reading on an aeroplane. Pretend you are
sitting in first class having the type of surprisingly
interesting, getting-to-know-you conversation that Kessler had
with a rich man from Switzerland who not only invested in his
hedge fund, but taught him how to run it as well.
Like a summer blockbuster film, you will enjoy the time if you
go into the book knowing what you are getting into. This is not a
how-to guide to running a hedge fund, nor is it a record of the
booming Silicon Valley of the 1990s, or a sombre textbook on how
to arbitrage the yen and the dollar or analyse quantitative data.
It is a description of a rollicking ride through a crazy time
Kessler is good with an anecdote. He name-drops well, can tell
a joke, and loves pop cultural references. My favourite involves
an anecdote that discusses the John Cusack film The Sure
Thing to explain to two uninterested young MBA types that "the
only thing for sure is that there is no sure thing". He also
includes references to MTV's hit show Punk'd and classic
television programmes such as The Addams Family and The
While his dialogue can be a little forced or pedantic, it is
also his own recollection, not an exact rendering, and is used in
ways that are convenient for the story at hand or which help
readers not familiar with Wall Street (which in his book includes
hedge funds) to understand its often funky jargon. A college kid
interested in Wall Street who thinks a cagger keeps beer cold will
quickly learn it is shorthand for compound annual growth rate.
Said student will also get references to market timing, company
flotation shenanigans and other tomfoolery.
Some chapters, such as "Pressure Drop" and "Shrink, Integrate",
read like the economic and history textbooks you wished you had
when you were in high school. They also read like another classic
of the financial services genre, Liar's Poker.
Kessler has surely learned a trick or two from Michael Lewis,
author of Liar's Poker and, more recently,
Moneyball. In fact Mr Lewis has reviewed Kessler favourably
and Kessler, who makes reference to Liar's Poker in
Running Money, also, in the acknowledgments page, writes:
"Michael Lewis gave me words of encouragement over the years and a
path to follow." Kessler does not match Mr Lewis for writing
style, but his book is just as much fun as Liar's Poker
because he shares its author's curiosity.
Early on in his book, in a chapter called "Hedgies", Kessler
writes: "It was what I didn't know about that always seemed more
interesting." He goes on to say that when he started managing a
hedge fund, despite years spent meeting other managers, he did not
have the "foggiest idea what they really do".
You will not know much about what they do at the end of the
book either. But you will know what he did, and will be the richer
for it because Kessler's book teaches an important lesson that is
as applicable to hedge funds managers as it is to anyone: the
secret of success lies in discovering things you do not