Quite a disappointing work from Andy Kessler. Yes, he succesfully ran a long-only fund and made a bunch of money for his investors and himself, but please don't confuse the luck with the talent - anyone who happened to buy a dot-com stock in 1996 and happened to sell in the early 2000 would have achieved similar or better return on investment (this is not to say that he's not a talented investor, it's just his track record doesn't prove much). As far as his new economic theory - i.e., "it's really different this time" - it's a bit naive and superficial. I found a bit annoying the fact that he belittles other hedge funds, companies and investors in Silicon Valley, and even some of his own clients!

I read a LOT of financial storybooks, and this one is nothing exceptional: the author seems more interested in historicaly references than factual tales of beating the bushes for clients and investment ideas. Sometimes felt as if I was re-reading a history book versus a financial tale, which is what I expected to be buying.

Nothing Special.

Mr Kessler has shared his thoughtful analysis of the creation and spread of wealth in an easy to read format. He writes in simple terms, and thus simply communicates some concepts that are truly deep and thoughtful.

He does not feel the need to demonstrate his intelligence (already well proven by his track record in technology as well as investing) to the reader, as many do, and thus communicates effectively.

This is one of my favorite books of all time. A literal "page turner" analyzing and explaining such normally boring topics as wealth creation and investment strategies, with an emphasis on the digital revolution of the late '90's, and suggestions on lessons learned from this time period to aide in 21st century investing.

Great book. Highly recommended.

Although "Running Money" is peppered with the same brand of sophomoric humor that permeated Kessler's first book, "Wall Street Meat", this book clearly has intellectual pretensions, with Kessler repeatedly adopting a professorial tone to air his views on America's massive trade deficit, among other things. Sadly, this is the book's major weakness. Kessler's core competency is as a raconteur, not a thinker. When he tries to style himself as a thinker, he inevitably embarrasses himself.

For instance, he contends that America's trade deficit should not be a cause for concern, as it is the natural result of the developing world's competitive advantage as a producer of low-margin goods (which are subsequently imported into America). If the trade deficit is really so worrisome, shouldn't America become a producer of low-margin goods in order to curb its imports?, Kessler asks with a touch of sarcasm. This is patent nonsense, of course. The problem is that, like a spendthrift consumer racking up too much credit card debt, America is importing goods from abroad and incurring alarming amounts of obligations to foreigners in the process. Nobody is suggesting that America take the extreme and atavistic step of nurturing its low-margin industries in order to rectify this problem; rather, America should live within its means. I could go on, but Kessler's gaffes are too numerous to list.

Kessler's self-deprecating style partially redeems his many blunders - but perhaps there is truth in jest. Like many others, he simply went along for the ride during the bull market of the late 1990s, leaving me with the impression that the stellar performance of his fund was nothing more than dumb luck. "Don't confuse brains with the bull market", he admonishes when describing other high-flying but incompetent fund managers who eventually got their comeuppance. Ironically, Kessler would do well to apply those words of wisdom to himself.

"Running Money" picks up where Andy Kessler's previous book, "Wall Street Meat" (which portrays his life as a Wall Street-based semiconductor industry stock analyst and investment banker), left off. Kessler left Wall Street to run a Palo Alto-based hedge fund with one partner, raising money from wealthy individuals and groups, and investing it in latter-stage startup and public technology companies. He had the, in retrospect, incredibly fortuitous timing (as he himself admits) to open a five year fund in 1996, which forced him to liquidate the fund and lock in his profits as the tech bubble was bursting in 2001 (in fact, he disperses his last cash just days before 9/11).

But Kessler's success, as he proves in the highly entertaining and also thought provoking "Running Money", is not merely the product of providential timing. His insider's view of the hedge fund industry shows how many of these funds don't even attempt to do fundamental stock analysis, but instead seek out market distortions that they can profit from (for a while, at least). Kessler, by contrast, stays true to his stock analyst roots and attempts to find great companies possessing a strong economic and technological advantage in a market about to undergo rapid growth. He struggles initially, but eventually uses an interesting combination of old world thinking (by analyzing the history of the steam power-driven Industrial Revolution) and radical new era economics (described below) to identify some winners. His story of the small niche semiconductor company he found which benefited immensely from the MP3 music piracy fad, at the same time that Napster and the record companies were losing their shirts, is a great case study for technology investing.

If "Running Money" were nothing more than a series of case studies and anecdotes about the investments Kessler made, it would be a fairly lightweight book. The anecdotes are indeed amusing, especially Nick Moore's scathing trashtalking of technology companies (Moore has a humorous nickname for every technology company, e.g. "Scam-azon"). But fortunately, in the final section, Kessler ponders the deeper question of what his success means about the current economy. It is here that Kessler voices some fairly radical opinions and theories that certainly deserve to get discussed and tested.

Kessler's radical opinion is that traditional economists, who are very cognizant of and worried about the trade deficit that the United States has been running since the 1970s, are not properly accounting for what truly matters in today's economy: wealth and profits. Because so much US manufacturing has moved abroad, and because the design of those products (i.e. the intellectual property) is still heavily centered in the US, the US does not receive any economic "credit" on the trade balance sheet when those designs are shipped to overseas factories. What is counted, of course, are the manufactured products that come back into this country, and that produces a large deficit. But since manufacturing is such a cutthroat business, whereas companies focused on developing intellectual property (e.g. Microsoft, Intel, pharmaceutical companies, and even Nike) command such high margins (profits) and pay their employees well, the resulting arrangement is highly beneficial to the living standard of the US. "We think, they sweat", sums up Kessler in his typical smart-alecky style. The low-priced products which flow into this country, along with the capital which finances some of our government's budget deficit, are our rewards for this mutually beneficial relationship.

Needless to say, these views are highly controversial. Yet Kessler forcefully states his arguments, and also has more than a little evidence on his side. He deserves credit for formulating these views, and thereby making "Running Money" more than just a breezy rags-to-riches technology boom era story.