Book Review - Riches Among the Ruins: Adventures in the Dark Corners of the Global Economy by Robert P. Smith with Peter Zheutlin
These days, it seems that all the trading of financial instruments can be done with the click of a mouse using electronic online exchanges. But that's not the way it always was when it came to some of the more esoteric forms of trading, like trading the debt instruments of developing countries. Robert P. Smith was one of the first to play in this niche market and helped form much of what we see today when it comes to debt securities. He shares his stories of life as a global vagabond in the book Riches Among the Ruins: Adventures in the Dark Corners of the Global Economy. With the correct expectations, Riches is an entertaining read and helps shed some light on how financial markets are formed and manipulated.
Smith started out as a collections lawyer working for his father in Boston. He absolutely hated the job, and wanted far more than what his father and mother considered a "good life." This longing led him to sign up for programs that took him overseas to places like Vietnam where he worked for the US government collecting information on the country's economic condition. As he dug deeper, he started to see how countries were crippled by the inability to convert their debt into dollar-based offerings that would allow them to use what few resources they had to start an ongoing flow of capital. Smith worked out how he could buy these debt instruments from the holders for far less than their face value (in order to give the holders something for their investment) and then sell them back to the government for less than the government owed. The spread between those two prices is where his profit would come from. All this was easier said than done, as the holders were generally not compiled in a single list, and there was little transparency in the process. But with persistence and legwork, Smith could often match up buyers and sellers and collect a good return for his efforts.
That's not to say that it was risk-free, however. Along the way, he had partners that double-crossed him, partners that were arrested for fraud, and times when he was personally at risk for millions of dollars if the other party did not honor their agreement. He flew into regions where he was shot at during times of war, as well as taken rides with people that could have ended with a single well-placed bullet. But through all this, he was trying to prove to his wife and father that he was *not* a loser and that he could make a living trading debt securities. And ultimately, he pulled it off and became a pioneer in the debt market.
Smith and his co-writer do a good job in weaving an entertaining story that gives you a flavor for what it must have been like to be on the edge back then. What the book doesn't do is go into minute detail as to how these debt instruments work and the intricacies therein. In other words, if you were to buy this book thinking you would learn all you needed to know about debt trading, you'd be disappointed. You'd learn about it, yes. But the concepts would be in general terms, and the market doesn't work the same way now as it did then during his more harrowing adventures. Keeping that in mind to set your expectations, you can decide if this is the type of book you were looking forward to reading. Working with that information, I found Riches Among the Ruins to be a good read.
Obtained From: Publicist