Where Are the Customer’s Yachts? by Fred Schwed

Where are the customers yachts

Summary
  1. A classic book on investing which will provoke you, teach you and crack you up all at once. Schwed exposes the investment industry for what it is and offers a lot of contrarian yet sound advice on how to invest your money
Key Takeaways
  1. If you are not a skeptic, you are not an investor
  2. Ever since, my tendency has been to buy stocks…Then when they show a profit I sell them…It seems to me at these moments that I have achieved life’s loveliest guerdon – making some money without doing any work. Then a long time later it turns out that I should have just bought them, and thereafter I should have just sat on them like a fat, stupid peasant. A peasant, however, who is rich beyond his limited dreams of avarice.”
  3. One can’t say figures lie. But figures, as used in financial arguments, seem to have the bad habit of expressing a small part of the truth forcibly, and neglecting the other part…
  4. Like most other Wall Streeters, bankers lack the ability to do nothing. Your average Wall Streeter, faced with nothing profitable to do, does nothing for only a brief time. Then, suddenly and hysterically, he does something which turns out to be extremely unprofitable. He is not a lazy man.
  5. …when the market is “going up” like a fury, there is no reason to believe that the very next “tick” is more likely to be up than down.
  6. …accounting is not even an art, but just a state of mind.
  7. Making “mind bets” won’t do. Like all of life’s rich emotional experiences, the full flavor of losing important money cannot be conveyed by literature.Customers who suffer from rhinophobia [the dread of ever having any cash] always have as many securities as possible
  8. …the average individual is incapable of handling his own financial destiny – a fact which he can easily verify for himself in the course of one lifetime
  9. In conclusion, I leave you with this suggestion. The next time you get a hot, fast tip, quote the market.
  10. Speculation is an effort, probably unsuccessful, to turn a little money into a lot. Investment is an effort, which should be successful, to prevent a lot of money from becoming a little
  11. When there is a stock-market boom, and everyone is scrambling for common stocks, take all your common stocks and sell them. Take the proceeds and buy conservative bonds. No doubt the stock you sold will go higher. Pay no attention to this – just wait for the depression which will come sooner or later. When this depression – or panic – becomes a national catastrophe, sell out the bonds (perhaps at a loss) and buy back the stocks. No doubt the stocks will go lower. Again pay no attention. Wait for the next boom. Continue to repeat this operation as long as you live, and you’ll have the pleasure of dying rich
  12. “‘Take care of the pennies and the dollars will take care of themselves,’ is better than a half-truth…At least as accurate is “Take care of the millions and the pennies will take care of themselves'”
  13. A man’s true wealth is his income, not his bank balance
What I got out of it
  1. A funny and informative book about the inside workings and quirks of Wall Street. As the intro says, “The names and faces and machinery of Wall Street have changed completely from Schwed’s day, but the game remains the same. The individual investor is still situated at the very bottom of the food chain, a speck of plankton afloat in a sea of predators.”

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