8-1-2017 TUESDAY AFTER LUNCH MONEY MEMO
By the Financial Foghorn
What Should Investors Be Reading?
“Chrestomathy” – the selection of passages from an author
August 1: Gold – $1272.60 up $6. Silver – $16.73 down 2 cents.
I received a recent missive from my young maven, Jared Dillian, wherein he fretted about how to the answer he gets from subscribers, or from his Facebook readers, about what puppy investors should read.
I fired off an answer based on my years of teaching adults, and sent it off. It promptly disappeared into the ether somewhere. Apparently his Bloomberg email address was short term only. Here’s part of what I sent…corrected, and shortened. I’ve added some semi-appropriate pictures.
I’m a sub of your “Street Freak” letter, and I liked your piece a lot about what investors should read to help themselves with markets. I’ve been a stockbroker and a teacher of investing for 36 years or so, but not at the level you are. Maybe it was your Coast Guard schooling and the chance of drowning that ramped up your sophistication…
I did a stint with Dean Witter in the 80s, and then I was the Director of Training for Financial Network Investment Corp…now owned by somebody else. There were other jobs, but for the last 20 years I’ve done Continuing Ed workshops part time for CPAs and lawyers. They’re like college kids, but I had to use smaller words to keep them awake…
Over the years, I’ve heard many of the same questions you have about what investors should read. I learned to start by asking them where they were on a 1-100 investor savvy level. Then I’d try to match books or websites to their level.
If the questioner gave me a number below 70…(a “D”), I’d go with the Dummies books. Personal Finance for Dummies, Stock, Investing for Dummies, and Mutual Funds for Dummies, etc. Those books from the 90s on Wall Street were written by a U. C. Berkeley professor, (Eric Tyson) and were pretty good for the concepts, the vocabulary and the basics. Common Sense on Mutual Funds by John Bogle was ok too.
If the student was a self declared 70 to say 80, (a “C”) I suggest Leo Gough’s book on 25 Classics – of financial books, then have them pick the one/s that seemed the most applicable. (I bought the book for my brother, read it, and realized I’d read 18 of them. And I didn’t agree with all of his 25 choices either…)
If the questioner self scored above 80 (a “B”) I’d suggest the latest edition of the Ben Graham classic, Securities Analysis. And then a bio of Buffett, The Warren Buffett Way by Hagstrom, and the Charlie Munger bio, Damn Right by Janet Lowe. (Charlie’s Almanack (sic) from 2010 has gotten too expensive.)
There were no self scored 90s asking questions…
If someone wanted bond geek info, I’d suggest the old Yield Curve Analysis tome by Livingston, still available on Amazon. Occasionally for the non-numerical right brain types, I’d toss in the whimsical little investment book, The Tao Jones Averages, by Bennett Goodspeed.
I agree with your perception that none of the questioners really wanted to know much about why Wall Street works the way it does. I’ve probably had over 10,000 students in my classes from college “Securities Investing” to adult CE, and including the occasional straight sales seminar. Attendees pretty much all just wanted the 7 steps to get rich. Sometimes they wanted only 3 steps.
And If I tried to talk about gold and silver…which I’ve done since 2003, I got push back. Sometimes nasty. This led to some very long workshop days 10 years ago I learned about gold from while working in Germany. Those folks have long memories dating back to their 1921-23 experiences, and they continue to believe in gold today. Americans haven’t had any sort of currency crisis or problem since the American Civil War. Less than 5% of Americans own any precious metalsat all.
I couldn’t find a book on gold for my CE classes, so I wrote one in 2008. Financial Foghorn’s Guide to Gold is still on Amazon and print on demand. Anyone can download two chapters from my website, www.financialfoghorn.com. They’re then signed up for my rather odd weekly blog that I’ve been writing since 2008. I’m not trying to have you plug my book. If it sells it sells. I still think it’s a good “soup to nuts” explanation of the PM world.
I like your outlook and your writing. I’m as perplexed about markets after 35 years in the business as anybody. You’re a young-un and write from that perspective. I need that. Thank you. Keep it up. I can’t survive/thrive just on old guys like The Dines Letter, or John Doody’s Gold Stock Analyst.”
“Joint intervention in gold sales to prevent a steep rise in the price of gold, was not undertaken. That was a mistake.” Former FED Chair Paul Volcker (Memoirs)
Investing is a craft. Proficiency requires diligent study, then practice. See*s.
Barisheff, Nick: $10,000 Gold, (2013). Myths and realities about gold investing.
Dillian, Jared: Street Freak (2011). “Crazy” like a fox guy at Lehman in ’08. See facebook.com/dailydirtnap
Engdahl, F. William: Gods of Money; Wall Street, Death of the American Century (2009). Also Century of War (’93)
*Gough, Leo: 25 Investment Classics (1998) Summaries.
*Griffin, Edward: Creature from Jekyll Island, 3rd. Ed. (1998). How and Why the FED was created at Jekyll.
Hagstrom, Robert: The Warren Buffett Way (1994). Bio of Oracle of Omaha.
*Kindleberger, Charles: Manias and Crashes, 4th Ed. (2000). MIT Prof.
Lewis, Michael: The Big Short (2010), And Flash Boys (2014)- “NYSE is rigged.”
Lips, Ferdinand: Gold Wars (2001). Gold as seen by Swiss gnome.
McGowan, Mike: Foghorn’s Guide to Gold (2008). www.financialfoghorn.com.
Mladjenovic, Paul: Precious Metals for Dummies (2008).
*Rickards, James: New Case for Gold (2016). CIA? Also Road to Ruin (’17).
Rothbard, Murray: What has Government Done to Our Money (1963) http://mises.org/books/whathasgovernmentdone.pdf Free. Free I said…
Schroeder, Alice: Snowball (2008). Insightful, and authorized bio of Buffett.
*Shiller, Robert: Irrational Exuberance (2001). Why the 90s were nuts.
Taber, George: Chasing Gold (2014) The Nazis looted gold in every Euro country they…”occupied.” George said WW2 was really a bank heist.
Wolfe, John Truman: Crisis by Design (2010). Banksters planned 2008…