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Summary: Timeless sendup of Wall Street, customers and brokers alike
Review: In the current gloomy environment -- with scandals and investigations ("shocked, shocked, I say, to hear...") at every turn -- this book is a LOL reminder of the constancy of human behavior in the face of temptation.As the other reviewers note, Schwed worked as a broker in the early 1920's. He then wrote this book -- the "Liar's Poker" of its time -- in the 1940's, with the wry perspective that only a crash and ten years of stagnation can bring. Ancient history? Au contraire. What makes this book such a must-read is two things. First, the things that firms and brokers do to separate customers from their money haven't really changed. Touting low quality underwritings, cramming unwanted inventory down customers' throats at inflated prices, using fancy phrases to flog dogs were as prevalent then as now. But this is not a one-sided bashing of the Street and its techniques. Schwed gives equal time to customers' susceptability, even eagerness, to play their part in the game. Schwed's fundamental point is that people -- clients and brokers alike -- are forever led astray by their wanting to earn outsized returns without having to take any risk. But the thing that really sets the book apart is Schwed's lucid yet highly entertaining style. You'll walk away with fresh insights into industry practices and market structures that you can apply to today's events. And even when you realize the target is you -- the ever-hopeful investor -- you'll be laughing so hard you won't mind. If you even mildly liked Liar's Poker, you'll love "Yachts."
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Summary: Wisdom Wrapped in Whimsy
Review: Put down that ugly brokerage statement from the busted, dot-gone Bear market. Skip that news report of the latest bankruptcy filing and spend a couple of whimsical hours with author Fred Schwed, Jr. WHERE ARE THE CUSTOMERS' YACHTS? is a rejoinder to Wall Street's inflated self-confidence that begins with that classic question. Schwed's conversational style makes this a quick read. His style is 'wry', 'dead-pan', 'droll' - a bit of Andy Rooney, maybe a bit of 18th Century novelist Lawrence Sterne. Schwed looks back to the 1920's (published 1940, republished 1955) as "one of the great universal delusions of history" a period of "supreme miscalculation". It was a kind of grand "nonsense" we can relate to in our own post-internet bubble period. Schwed is more humorist than moralist. Misdoings on Wall Street are "overrated" often a mix of "bad luck and bad brains". Advisors are "romantics" who genuinely believe that the market's movements can be predicted. Often they become victims of their own "confused sincerity". Technical analysts are "pathetic", persuading themselves of predictive patterns in stock charts and statistical data. In the end market activity may repeat itself, but often "ponderously, with an infinite number of variations." Schwed takes the side of short sellers, an unpopular bunch who weigh against the general herd to profit when the market declines. He notes that such professional cynicism is never tolerated in an un-free society. Years before the Wall Street Journal began 'testing' the efficient market theory (EMT) selecting stocks with darts, Schwed relates the apocryphal story of a bank trust officer's relative success selecting stocks from his pen's random ink spots. In a timeless passage, Schwed summarizes his investment program: "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...just wait for the depression...sell out the bonds...and buy back the stocks....Continue to repeat this operation as long as you live, and you'll have the pleasure of dying rich." Who can argue with a contrarian strategy that would have worked wonderfully in recent years.
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Summary: A Classic That Every Investor Should Read
Review: Read this book before you invest a dime! The passage of sixty years hasn't changed the relevance of this book. The author's experiences as a stock broker lead him to speak of the things that everyone on Wall Street knows, but doesn't care to speak of. Such as that even the most exalted stock market analyst doesn't know which stocks will go up and which will go down. He's really funny, too. I read this book all in one day, it zips right along.
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Summary: Hilariously funny, and bitingly true
Review: Schwed's main thesis is that Wall Street's experts, advice-givers, and prognosticators are just making wild guesses -- guesses for which they'll charge you quite a tidy sum. This book is humorous in its own right, without resorting to the same old cliches about stocks which many other "financial humor" books use. The author actually objected to using this title for the book, as he thought that joke was too old. On that note, the book is surprisingly well-written. Schwed's educational background is, as he says, in 19th century Romantic poets, not in business. His writing style is quite similar to that of "Stanley Bing," with the same kind of "har-har" wit, and a thin sprinkling of self-disgust. If you think your full-service broker knows the future, or that technical analysis really works, or that "they" are driving down stock prices, read this book for an education about Wall Street. However, even if you already know the truth about these things (and especially if you've read Malkiel's book, or any treatment of efficient markets theory), this book is valuable for some very funny observations and notes. The other reviewers are right about how relevant this book is for today: it was written in 1940, but aside from the minor technological differences between then and now (e.g., allusions to ticker machines), it could well have been written in 2000. This book is an excellent warning about too much faith in Wall Street pros (who Schwed says aren't crooks -- they're not smart enough to be crooks), with some genuinely funny (I laughed out loud, and I'm a tough customer with humor) observations and allusions.
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Summary: Marvelous!
Review: Sixty years old, and as accurate as ever. For everyone who thinks that technical analysis is gospel, for everyone who thinks high mutual fund fees are worth it, for everyone who complains that the "market makers" are manipulating the stock market, and most of all, for anyone who thinks that recent stock market events are unprecedented, you need this book! Schwed skewers classic Wall St archetypes that haven't changed a bit since 1940. It's a fun, funny read, and one I recommend highly, particulary to the Foolish.
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Summary: One of the funniest books about the business of Wall Street
Review: The author takes a very humorous look at the people who do business on Wall Street, both customers and the people who work there. He illustrates how even most of these Wall Street 'professsionals' rarely know enough to prevent their customers from harm. The steroetypes portrayed in the book are valid even today. This book is well written and is wonderful reading.
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Summary: Wit and Wisdom in One - A Great Book on Stock Market Manias
Review: The book takes a cynical look at the internals of the stock market in general and stock market mania of the late 20s in particular. The author's hilarious style should make your eyes shed tears as you read this book. Despite its focus on the markets of the late 20s, this book is a timeless classic. With slight changes certain events described in the book can be related to today's market. Towards the end of the book, Fred Schwed offers this priceless advice: "For no fee at all I am prepared to offer to any wealthy person an investment program which will last a lifetime and will not only preserve the estate but greatly increase it. Like other great ideas, this one is simple: 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 that the stocks you sold will go higher. Pay no attention to this - just wait for the depression, which will come sooner or later. When the 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 still lower. Again pay no attention. Wait for the next boom. Continue to repeat this process as long as you live, and you have the pleasure of dying rich."
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Summary: An Investment Classic All Stock Investors Should Read!
Review: This book clearly deserves more than five stars for exposing the folly of Wall Street in the most humorous possible terms. This book's fame far exceeds the number of people who have read it. Almost every experienced stock investor will cite examples from the book, without even knowing their source. The title refers to an ancient story (which the author finds is probably at least 100 years old by now) about a visitor to New York who admired the yachts that the bankers and brokers had in the harbor. Naively, he then asked where the customers' yachts were. Naturally, there were no customers' yachts. Let me set the stage. The author spent two years on Wall Street in the 20s, but knew it better than that and continued to invest in stocks. He wrote the book in 1940 after the horrible bear years of 1929-1940. The memories of the 1920s were still fresh. Then he updated the book in 1955 in the midst of the 50s bull market with a new introduction in which he explained that the book did not need updating. Although commissions are no longer fixed, and few spend the day sitting in a broker's office, many of the other observations in the book remain as timely as those in The Madness of Crowds. Human nature doesn't change. Behind all of the hype about getting rich with stock investments is a sad reality. Over a lifetime, the vast majority of people get poor results from their stock investing. Around 90 percent of professionals will also underperform the market averages over their careers. But the desire to "outsmart" everyone else is almost universal. Raging bull markets, like the one we had until March 2000 on the NASDAQ, only tend to reinforce these ultimately expensive urges. I have been around professional investors for over thirty years and all the big scores I remember involving stocks came after someone who was a founder or worked for a company that went public cashed in their stock and stock options after many years of service. These are not stock-investing events, they are entrepreneurial compensation. In the Money Game, Adam Smith pointed that out, and it remains as true today as it was then. One of the classic stories in this book is about what would happen if 4000 people started flipping coins against each other. You are eliminated from the competition after one loss. Although by definition, half would win and half with lose with each flip, those who had won ten times in a row (as must happen for some in this format) would soon start to give lessons in coin flipping techniques. That story nicely captures the folly of Wall Street. Even though some may win, it usually doesn't mean anything. The book contains other investment classic stories that you must have in your repertoire. The book is brilliantly illustrated by the classy cartoons of Peter Arno. It is worth acquiring the book just for those. The subjects covered include Wall Street's passion for prophecy, financiers and seers, customers (or the sheep to be shorn), mutual funds, short sellers, options, speculators and the bull market of the 20s, and the excuses handed out to those who are relieved of their money. The writing style is urbane and witty. For example, there is the usual disclaimer on not following the advice in the book in the beginning. Except, it is illustrated by two hands with fingers crossed. And, the warnings are a just little different. The information in this book "while not guaranteed by us, has been obtained from sources which have not in the past proved particularly reliable." The author had discovered that titles cannot be copyrighted, and he "had planned to have my book appear under a good title, The Adventures of Huckleberry Finn." The author's favorite review of the book contained this phrase, "If I were J.P. Morgan, and I have no reason to suspect that I am not . . . .", and was signed by the author of the review, Mr. Frank Sullivan. The subsequent witty correspondence between them is included in the introduction. If you are a fan of Louis Rukeyser, you will find the humor here comparable with the badinage on Wall $treet Week during the opening comments. Seriously, the humor in this book will help you to better understand the risks associated with stock investing. There is a wonderful quiz you can take that will tell whether or not you should be a stock investor. Most will not pass that quiz. If you still want to own stocks, I suggest that you advance to John Bogle's book, Common Sense About Mutual Funds. It can make you some real money. If you do not want to own stocks, go instead to Rich Dad, Poor Dad. Follow on to Cash Flow Quadrant. I also suggest you think about where else folly is taken seriously. This will also put things in perspective for you. My favorite location is the Congress of the United States. Keep looking for those yachts when you make your investments! To whom do they belong?
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Summary: BEST CLASSIC ON THE "REAL" WALL STREET
Review: This book is a great recommendation for newcomers to the investment world who only know of the positive things and have little or no idea of the negative things that are right under their nose. I remembered my first experience of walking on Wall Street on a quiet Sunday afternoon and thinking of how people get rich here overnight, not taking the time to think where the money comes from for them to get rich. Ok that was beofre I ever invested a single cent, but today many novices who were in the same position as myself then are probably being misguided in their thoughts about great wealth being made. I hope that this book will open the eyes of all such persons so they can 'see' the truth!
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Summary: Of the Advantages of Insular Thinking on Wall Street...
Review: This book is very lucidly and wryly written, has sometimes a bit of a cynical objective tone (the author did get burned), but is definitely very humorous, as well as light and agreeable to read. The book is also spiced up by over a dozen of humorous old-fashioned cartoons from Peter Arno. In essence, this books very entertainingly demonstrates the many advantages of having or gaining an independent critical thinking when facing the follow-the-pack mentality of Wall Street mobbers of all sorts (personally, people in a hurry always made me confused). Indeed, if you hadn't already discovered, the world of finance is probably one of the most implicitly and subtly coercive one there is ... In these entertaining pages, you will discover that the vast supply of sheer mercantile marketing strategies of Wall Streeters of all sorts are only matched by the benevolent gullibility of a big deal to many Main Streeters. So if you might say there is a certain justice to it after all, you will definitively agree that there is a definite direction as to where the money flows, that is statistically at least... Check out those yachts! In a broader context, the toll bridge of random walks leading (eventually) to so-called efficient markets does indeed feed on stocks being erratically transferred to and fro at whim, but you can be sure that Wall Street's marketers and intermediaries do have a vested interest in getting their (fair) share out of the (many transaction) deal(s), i.e. the more activity, the better (for them)... But keep in mind that these frictional and parasitic costs are totally non-productive in their ultimate economic end-result, apart from the fact that they provide a liquid (and sometimes efficient) market... a high price to pay for short-term inefficiencies, that also tends to favor a trading instead of an investing mentality... People's biggest problem seems to be that they just can't sit still (cf. a 17th century author named Pascal...)... But just in case you believe this is another story altogether, let me quote the final words of Fred Schwed's Introduction to the 1955 Bull Market : "[...] my tendency has been to buy stocks, [...]. Then when they show a profit I sell them, exultantly. (But never within six months, of course, I'm no anarchist.) 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 after 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." If you are looking for a similar, but more recent, and probably a bit more sophisticated book on insular independent thinking in the face of interested so-called Wall Street and/or corporate professionalism, check out Lawrence Cunningham's fine collection of Essays on Corporate America, also a very worthy and enjoyable read. To come back to Fred Schwed's book, you will probably enjoy it a great deal, and, 'tell you what, it might even make you richer in what you already have, instead of just making you richer in what you might have, if... to put it otherwise, five hundred dollars and some common sense are often worth much more than ten thousand dollars and the lack thereof, at least in the end result...
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