Get the key ideas from

Business Adventures

Twelve Classic Tales from the World of Wall Street

By John Brooks
21-minute read
Audio available
Business Adventures: Twelve Classic Tales from the World of Wall Street by John Brooks

Business Adventures comprises twelve riveting case studies of key developments in business, economics and finance. While they concern events and companies you may never have heard of, the case studies are highly entertaining and the lessons learned from them are still applicable today.

  • Anyone interested in the highlights of modern economic history
  • Decision-makers in the private or public sector who want to avoid the follies of those who came before them

John Brooks (1920–1993) was a journalist and author, known primarily for his work as a long-time contributor to The New Yorker magazine, where he wrote articles similar to the ones talked about in Business Adventures.

Go Premium and get the best of Blinkist

Upgrade to Premium now and get unlimited access to the Blinkist library. Read or listen to key insights from the world’s best nonfiction.

Upgrade to Premium

What is Blinkist?

The Blinkist app gives you the key ideas from a bestselling nonfiction book in just 15 minutes. Available in bitesize text and audio, the app makes it easier than ever to find time to read.

Discover
3,000+ top
nonfiction titles

Get unlimited access to the most important ideas in business, investing, marketing, psychology, politics, and more. Stay ahead of the curve with recommended reading lists curated by experts.

Join Blinkist to get the key ideas from
Get the key ideas from
Get the key ideas from

Business Adventures

Twelve Classic Tales from the World of Wall Street

By John Brooks
  • Read in 21 minutes
  • Audio & text available
  • Contains 13 key ideas
Upgrade to Premium Read or listen now
Business Adventures: Twelve Classic Tales from the World of Wall Street by John Brooks
Synopsis

Business Adventures comprises twelve riveting case studies of key developments in business, economics and finance. While they concern events and companies you may never have heard of, the case studies are highly entertaining and the lessons learned from them are still applicable today.

Key idea 1 of 13

As the 1962 Flash Crash showed, investors are irrational and the stock market is unpredictable.

How much can a person miss in three days? Well, if you happened to be a stock market investor who fell into a three-day coma on May 28, 1962, you might have woken up to almost no noticeable change in your investments, but you also would’ve slept straight through the chaos of the 1962 Flash Crash.

This three-day turmoil neatly illustrates how bizarre the behavior of Wall Street bankers can be, and how investors are guided more by their mood than actual facts.

On May 28, 1962, the mood on Wall Street was distinctly glum after six months of stock market decline. There was a lot of trading going on that morning, and the central office was running late in updating stock prices, as this was done manually.

Investors panicked when they realized they could only know a stock’s true price with a time lag of some 45 minutes, by which time they assumed the true price had fallen. Consequently, they rushed to sell off their shares, which created a downward spiral in prices. Their expectations became self-fulfilling, causing a crash that annihilated $20 billion in stock value.

But just as emotions triggered the crash, they also helped move along the recovery: investors considered it common knowledge that the Dow Jones Index, which measured the value of the general stock market, could not go below 500 points. So when the value came close to that limit, a buying panic broke out as everyone expected prices to go up. Three days after the crash, the market had fully recovered.

After this bizarre event, everyone was searching for rational explanations. But all stock exchange officials could come up with was that the government needed to pay more attention to the prevailing “business climate,” i.e., the mood and irrational expectations, of the financial market.

This inherent irrationality translates into the market’s unpredictability. In fact, the only thing that can be predicted about the market is, to quote famous banker J.P. Morgan: “It will fluctuate.”

Upgrade to continue Read or listen now

Key ideas in this title

Upgrade to continue Read or listen now

No time to
read?

Pssst. Sign up to your secret to success: key ideas from top nonfiction in just 15 minutes.
Created with Sketch.