Review of John Brooks' Once in Golconda: A True Drama of Wall Street 1920-1938

"In April [1930] the Dow Jones industrials touched a point 50 percent above the November low; no one could know that it was a point they would not touch again until 1954."

That's a quote from Once in Golconda: A True Drama of Wall Street 1920-1938; a Roaring 20s through Great Depression tale that is strictly about Wall Street, primarily the New York Stock Exchange (NYSE).

One thing that hasn't changed since the 1930s is desperate, pathetic attempts to prop up an overvalued stock market. Short selling bans are tried in every market crash, always without success.

I actually like the 1930s version better - on Black Thursday, NYSE President Richard Whitney personally walked the floor making above-market bids for 10,000 shares of US Steel and other industrial heavies. Much better than waking up Monday morning to a Federal Reserve intervention with my money.

For all his power and influence, Whitney was a rube and blew millions of dollars throughout his career buying what we today would call penny stocks. The result was that for most of his tenure at the NYSE, Whitney was insolvent and owed large sums including $500,000 to J.P. Morgan - a 90-day unsecured loan that was quietly renewed for years. It's naive of the author, John Brooks, not to observe that this was a bribe.

And for all the talk of what a great financial journalist John Brooks is, it's pretty astonishing that the book doesn't contain a single valuation ratio - not even a P/E - to put the market gyrations in context. Even though Whitney is the central character, and his financial ruin revolves around buying overpriced stocks, there are no specifics!

Review: 2/5

P.S. Since it's under $20, I may pick up a copy of Brooks' The Go-Go Years: The Drama and Crashing Finale of Wall Street's Bullish 60s.