Book Review: Binge Trading by Seth Freedman

Binge Trading by Seth Freedman is a look at the inner workings of 'The City' in London. The book is subtitled 'The Real Inside Story Of Cash, Cocaine And Corruption In The City', which I am sure offers a better idea as to what awaits inside.

Seth Freedman worked in various positions for six years withing the London financial centre and as such has been able to speak to many people - mostly anonymously - about their lives, experiences and work in in the 'Square Mile'.

It has to be said that this is an interesting book and he does not pull his punches. He speaks openly about his own addictions and lifestyle: fast money leading to alcohol and cocaine abuse, expensive clothes, meals and toys and an overpowering addiction to trading. If anything, this portion of the book is a little light given it's prevalence in the title. But honestly, once someone has told you that they got loaded and spent a fortune in fancy restaurants, how many times do they need to tell you that?

So instead, the book looks at the work of brokers and traders through the eyes and words of brokers and traders. He asks how they view themselves and their financial power.

He then moves into the less often discussed territory of short selling and corruption.

As a broker, one of his clients for two years was Simon Cawkwell - aka Evil Knievel - who is something of a legend in the UK stock market. He has earned a reputation over the years for breaking companies with huge bets on the downside (selling short), when he believed that their shares were soon to be in trouble. He has proven himself time and again. They look at his lifestyle, why he does what he does and the skills that he brongs to the markets. Cawkwell is rarely quoted in the UK press - he is not in the markets for publicity and has nothing to sell - but still his impact can be seen. This private persona means that it is very interesting to take a look behind the scenes at his thinking and approach.

When turning to corruption, Freedman looks at the ways in which insider trading can be operated and just how easy and lucrative it really is. Deep down, we all either believe or know that regulators seem to be powerless to stop insider trades and the easy profits that they skim from the stock market and other shareholders - you and I.

In many ways, the people that admitted some form of involvement to him describe the 'free money' of insider trades as some sort of right akin to a butcher having free steaks every week. Perhaps this is the case and it is a right, but it is still illegal.

One problem with insider trading is that it is described as being SOOOOO easy. Almost as if anyone working in the industry can and does do it. This news will either scare you away from the markets, make you believe that more regulations are required or motivate you to want a cut of the profits!

The main trend of the book though is the impact that trading for a living can come to control life. Freedman describes trading and gambling as requiring almost identical skills and mindsets and being hopelessly addictive. If you have plans to trade the markets of the world, this will be invaluable reading. It will help you to understand whether you really are suited to trading and whether it is a lifestyle that appeals. In this regard, for more agressive investors and wannabe traders, this is a must read book.

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