A Fool and His Money
Late in the summer of 1985, in the midst of an extraordinary bull market, free-lance writer John Rothchild decided to devote a year to learning the investment business. The idea was to discover how to beat the market, apply the knowledge to his own portfolio, achieve financial independence, then write a book telling how he did it. Given the book’s title, it would not be giving much away to say that he failed in most of those goals.
Rothchild took an empirical, hands-on approach to the project. To learn about stocks, he traveled to New York and visited the New York Stock Exchange and several investment analysts; spent time at a Merrill Lynch stockbroker training camp; visited Chicago to try his luck in the commodities market; and so on. Not the most efficient way to manage an investment program, but it makes for a more interesting book-- the “odyssey” is physical as well as mental.
Rothchild’s book is thus a diary of a failed get-rich-quick scheme. He did learn about investing, but there are scores of investor’s guides available that are more thorough and practical. Some of his investment decisions were so naive that it is hard to believe that he is not being disingenuous-- for example, he bought a deutsche mark straddle in the futures market without fully understanding what it is and purchased stock options on the basis of an overheard conversation in an investment-firm washroom. Is it any wonder he lost money?
(The entire section is 313 words.)
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