Wall Street dirtiest gambling secrets part two

Wall Street dirtiest gambling secrets part two

The explosion of gambling in America from 1970 to 2000 has stimulated work. Gambling and Speculation by Reuven Brenner and Gabrielle Brenner (Cambridge University Press, 1990), the bestselling Against the Gods by Peter Bernstein (Wiley, 1996), Gambling in America by William Thompson (ABC-CLIO, 2001), Wheels of

Fortune by Charles Geisst (Wiley, 2002) and Something for Nothing by Jackson Lears (Viking, 2003) are redefining the way people think about gambling.

There is some literature combining finance and gambling, beginning with Dickson Watts’s 1878 work Speculation as a Fine Art (available in reprint from Fraser Publishing, 1965). John McDonald did a lot to popularize game theory with Strategy in Poker, Business and War (Norton, 1950). Ed Thorp and Sheen Kassouf (who died on August 10, as this book was going to press) wrote Beat the Market (Random House) in 1967. Ed’s 1962 Beat the Dealer (Vintage) fits squarely into this intellectual tradition. An interesting recent entry is The Poker MBA by Greg Dinkin and Jeffrey Gitomer (Crown, 2002). I’d also put Marty O’Connell’s wonderful The Business of Options (Wiley, 2001) and the masterpiece Paul Wilmott on Quantitative Finance (Wiley, 2000) in this category, but do not think on that account that they are less than superlative financial texts.

For pure poker, you cannot miss books by Mason Malmuth and David Sklansky. I list only one from each, Gambling Theory and Other Topics by Mason Malmuth (Two Plus Two, 2004) and The Theory of Poker by David Sklansky (third edition, Two Plus Two, 1994), but both authors are prolific. Poker for Dummies by Richard

D. Harroch and Lou Krieger (For Dummies, 2000) covers the basics for absolute beginners and has good intermediate material as well.

Some important pure finance works for understanding the ideas in this book are Money and Trade Considered by John Law (1705),

The Economic Function of Futures Markets by Jeffrey Williams (Cambridge University Press, 1986), Futures Trading by Robert Fink and Robert Feduniak (New York Institute of Finance, 1988), Exploring General Equilibrium by Fischer Black (MIT, 1995), Dynamic Hedging by Nassim Taleb (Wiley, 1996), Iceberg Risk by Kent Osband (Texere, 2002), and Trading and Exchanges by Larry Harris (Oxford

University Press, 2003).

My Life as a Quant (Wiley, 2004) is the autobiography of Emanuel Derman, physicist and financial quant. It’s a tremendous book that gets inside the quant part of Wall Street. William Falloon’s biography of supertrader Charles DiFrancesca, Charlie D. (Wiley, 1997), Fortune’s Formula by William Poundstone (Hill & Wang, 2005),

Timothy Middleton’s biography of superinvestor Bill Gross, Bond King (Wiley, 2004), and Perry Mehrling’s biography of superthinker Fischer Black, Fischer Black and the Revolutionary Idea of Finance (Wiley, 2005) also offer important behind-the-scenes views of these principles in action.

Three wonderful books that are hard to categorize but deal with many of the ideas in this book in different ways are Nassim Taleb’s Fooled by Randomness (Norton, 2001), James Surowiecki’s The Wisdom of Crowds (Doubleday, 2004), and Malcolm Gladwell’s Blink (Little, Brown, 2005).

There are some excellent books on the history of futures trading including A Deal in Wheat by Frank Norris (1903), The Plunger: A Tale of the Wheat Pit by Edward Dies (1929—both of these are fiction, but reliable nonetheless), The Chicago Board of Trade by Jonathan Lurie (University of Illinois, 1979), Brokers, Bagmen and

Moles by David Greising and Laurie Morse (Wiley, 1991), The Merc, by Bob Tamarkin (HarperCollins, 1993), Pride in the Past, Faith in the Future: A History of the Michigan Livestock Exchange by Carl Kramer (Michigan Livestock Exchange, 1997), and Market Maker:

A Sesquicentennial Look at the Chicago Board of Trade edited by Patrick Catania (Chicago Board of Trade, 1998). I’m going to toss in a great book on Chicago, City of the Century by Donald Miller (Simon & Schuster, 1996), because it covers much of the same material, and other aspects as well.