Balancing the Books: Five Novels that Explore the Complexities of the Stock Market

I’m not a stock market person. I learned the difference between a stock and a bond in business school, which I attended six years after college because I still didn’t know what I wanted to do with my life and thought an MBA would help give me direction.

While I had a better understanding of finance and the stock market after business school, I still had no interest in it. I liked the softer, more liberal-arts friendly aspects of business: marketing, branding, strategy. But in 2021, an event in the market caught my attention so completely, it inspired me to go back and study the mechanics of investing and the economic forces that control markets, so I could write a novel that takes place on Wall Street.

The event was seemingly simple: the low-priced stock of struggling business, video game retailer GameStop, suddenly started to soar. A few prominent hedge funders, who were shorting the stock, lost a fortune as they got caught in a “short squeeze.” Shockingly, the buyers were a group of amateur investors, many who had become day-traders while furloughed during the pandemic, who banded together to buy GameStop, thereby driving up the stock’s price, as an attack against professional investors.

Instead of representing typical market movement, GameStop became a symbol of the fight between the “good” day-traders and the “evil” hedge funders. The shifts were so dramatic that the entire market was thrown into disarray. The battle also grew intensely personal with at least one hedge fund manager being repeatedly attacked in memes on social media and even receiving death threats.

In my mind, investing—long or short—was just business; so why were the day traders inherently the heroes and the hedge funders the villains? Why did this event strike such a nerve for so many? I realized that the stock market, where unimaginable wealth is created and lost daily, often acts as a prism for bigger ethical ideas around money, wealth and society. This intrigued me so much that I wanted to explore it, in fiction.

My new novel, The Trade Off, is set in New York’s stock market during the boom and eventual bust of the 1920s. It’s the story of a poor Jewish woman determined to become a broker in a virtually all-male industry, who sees the crash coming and hopes to take advantage of it.

Really, though, it’s a book about the complex morality of wealth that seeks to look at the grey area where people who get rich (even on Wall Street,) aren’t always bad. A book about the immigrant experience, about how starting over in America after losing everything can shape your attitudes towards money, about the constraints of being a woman even in an era of seeming liberation, about the unique relationship dynamic between siblings. So, it’s a book about the stock market, but not really.

As I began to research how others had taken on the market in fiction, I discovered that most books set on Wall Street are non-fiction page-turners about spectacular wealth, unimaginable hubris and catastrophic failure. Still, if you, like me, are more interested in the market as a way to explore bigger existential questions, there are a few works of fiction that are stand-outs.

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Tom Wolfe, Bonfire of the Vanities

Class, race and all sorts of inherent bias are expertly explored by Wolfe in this iconic novel. While the market is hardly the center of the story, it is a foil that sets off the many facets New York in the 1980s. The protagonist is a bond trader who epitomizes the greed, ambition and questionable ethics that is so frequently associated with Wall Street, especially in that era.

And the movie is pretty good too.

David Liss, A Conspiracy of Paper

This historical mystery isn’t a book about the New York Stock Exchange, instead, it takes place in eighteenth-century London, in the earliest days of the first stock market. A story about a Jewish former boxer turned investigator who seeks to uncover the truth about his father’s death, is both a stealth examination of the complex social pecking order of the 1700s, and a rare glimpse into the beginning of the trading of “paper money” and the first major market crash: the burst of the South Sea bubble.

Hernan Diaz, Trust

Probably the most lauded and currently well-known book in my round-up, this Pulitzer Prize winner expertly touches many of the same themes I hope to in The Trade Off. On the surface it is the story of a Wall Street tycoon who foresaw the Great Crash of 1929 and made a fortune from it. (NB: I was already well into writing my new novel when this literary gem came out.)

Cleverly told in four separate fictional texts—a “novel,” an “autobiography,” a “memoir,” and a “diary,” each with a different narrator—Trust takes the classic tale of stock market excess and spins it like a globe, offering the reader a puzzle with an ambiguous solution. It is no surprise that this unexpected tale with an innovative narrative style has appeared on so many “best of” lists.

Edwin Lefevre, Reminiscences of a Stock Operator

Likely the least well-known (and the oldest,) this is a rags-to-riches story about the life of a poor fifteen-year-old boy who uses his quick mind and unique investment strategies to become a stock market maverick. This first person “memoir” is closely based on the early-to-mid life of Wall Street legend Jesse Livermore, a man who went on to short the Great Crash of 1929 and make millions. Some even speculate he was the book’s author.

While written a century ago, the strategies laid out in Reminiscences are so foundational to today’s investors that it is still required reading for new hires at many banks. I read this during my research for The Trade Off (which is partly inspired by Livermore himself) and enjoyed it both as an eye-opening look at the early days of Wall Street and for its surprisingly modern market philosophies.

Michael Lewis, Liar’s Poker

If you’re looking for Gordon Gecko-like bankers who will make your jaw drop, Michael Lewis’ first book, a semi-autobiographical story of becoming a bond trader at Salomon Brothers, offers a scathing inside look at Wall Street. While technically nonfiction, it reads like a novel, and it is considered one of the seminal books that defined 1980s Wall Street.

If this is an area of interest, there are many others that fall into this category (Barbarians at the Gate, Den of Thieves, and When Genius Failed are a few others to get you started.)

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The Trade Off by Samantha Greene Woodruff is available via Lake Union Publishing.