The Equity Culture: The Story of the Global Stock Market by B Mark Smith (2003)
This book was written by the same author as the classic “Toward Rational Exuberance,” so I expected big things going in. As advertised, the book takes a winding path through the history of stock markets around the world, providing an in depth look at major events in each. An observant reader of this blog will probably notice that there has been a long gap between the last book review I posted and this one. This is because aside from a couple of lackluster books I decided not to review and the fact that I moved into a new apartment a little over a week ago and spent several days getting my life put back together afterwards, this book was very dense and took a while to get through. While interesting at times, it was mostly pretty dry and even though I was interested in the subject matter, reading it reminded me of having to muddle my way through some priceless work of ancient philosophy that isn’t nearly as readable as modern analysis had me believing it would be going in.
However, because there is tremendous value in this book, I kept going and ultimately made it through. Cultural differences were addressed that help to explain some of the still lingering differences between, for example, the western and Japanese stock markets. But for me, the most valuable part was perspective. After reading about stock market after stock market going through similar stages of development, patterns began to emerge. Just about every different market has experienced something that appeared to be a disaster at the time. But almost invariably, the end result of each of these events has been greater innovation and the continued building of wealth en masse – at least given enough time. However, there were winners and losers in each of these situations and that point is important to keep in mind as well.
My biggest disappointment about this book is that it only goes through the early 2000s bursting of the “dot com bubble.” It would have been nice to have seen the author’s analysis carried through to our most recent recession – and possibly into at least a portion of the historic bull market of the last decade or so as well. I see that there is a 2015 edition so maybe the author extended it. Sadly, my local library had the 2003 one so I’ll never know. Anyway, while the 2008 recession clearly had different underlying causes than the one we are finally beginning to see materializing now, it would have been nice to have had the additional insight. Overall, while this author can’t necessarily keep you on the edge of your seat for 300 pages and change, it’s only fair to acknowledge that isn’t really a reasonable expectation when picking up a book on the worldwide history of stock markets. It is still valuable, well presented information and thus, it is worth reading.