Black Edge, as defined by the author Sheelah Kolhatkar in the book, refers to insider information. In financial parlance, this is classified material that is unavailable to the general investing public and is thus considered illegal to take advantage of. The author claims that certain employees of the successful hedge fund SAC Capital brazenly obtained and relied on black edge to help the firm get the unbeatable returns that it showed over a period of time on Wall Street.
The genesis of this book was from a New Yorker article published in 2017 by the author. The rise and fall of a hedge fund that impressed Wall Street with its unmatchable profits for its investors seems to have warranted a book of its own. And what a book it was. If this were fiction, it would be one of the tautest thrillers making an entry at the top of various book charts. But as incredulous as it seems, Black Edge is non-fiction, pieced together from real life events – with larger than life characters – both in terms of their personalities and the vast sums of money involved. Such is this story of success and failure of one of the biggest and most envied hedge fund called SAC Capital Advisros, run by an equally maverick personality – Steven A Cohen. Through this book, Sheelah Kolhatkar has done an excellent job of bringing to light the events that led to the litigation and aftermath of this hedge fund.
What I liked immensely about the book is that although it goes into sufficient detail and lays down the groundwork for each character before merging him or her with the main story, it doesn’t meander in the origin story. The back stories of each character feel suitably trimmed. Many a times I’ve found authors exploring the background of a character to an unnecessary extent – often delving into painful and superfluous details – simply to justify a minor quirk in the character’s personality. Kolhatkar refrains feom doing that and for that I’m grateful to her for that.
Midway through the book I felt a certain sense of familiarity with the characters, specifically their behaviour and personality. I vaguely recognized them. On impulse, I did a Google search of two terms together and the results resolved my doubts once and for all. “Steve Cohen Billions” was the query that I typed in the search engine. And there you had it. The excellent TV show, Billions, and its character of Bobby Axelrod was partly inspired by Steve Cohen. Through his hedge fund, Axe Capital, Axelrod indulged in the same type of “convicted” stock market calls that has him beating the market and then some. He is also surrounded by employees trying to get in his good books, often bending and breaking the rules in the quest of higher profits. It is certainly a work of art if well-written prose can evoke so clearly related imagery. And I still find it incredible that there are such real life characters out there as well.
This story of SAC Capital Advisors – this story of hope, greed and desperation is worth reading. No matter if you’re related to the hedge fund or the finance industry or even otherwise. The book shows that, as often is the case, not all crimes get punished especially to the extent you and I would like to. But it is also heartening to know that not all wrong deeds go unpunished as well. Yes, the Feds may not have caught the big fish. But they did get a good catch nevertheless.
It was an indeed a pleasure to read Black Edge and I would recommend this book to anyone interested in knowing about how Wall Street operates – specifically the opaque hedge funds that have dominated news feeds in the last decade. The book has only a handful of pages that I found boring. The rest of the book feels like a page turning thriller that you’ll enjoy reading and learning from.
As I mark this book read, I have only one question. Has this author written more books for me to devour?