Robert Metz and George Stasen succeed admirably in dampening the enthusiasms of overoptimistic investors. Most of the seventy-five three-page essays contained in this volume offer cautions of one sort or another. Each short essay makes a quick point, emphasized in an even briefer “Lesson” at its conclusion.
A cartoon by Henry Martin, whose work regularly appears in THE NEW YORKER, provides the motivation for each essay. Metz is an accomplished financial writer and Stasen is an expert in venture capital who was a founding member of the American Stock Exchange’s Oversight Committee, so their advice is well informed in addition to being amusing.
The book is at its best in warning of the pitfalls of investing in the stock market. It counsels against the “sure thing,” the stock tip that cannot miss. A recurring theme in the essays is that the stock market is an efficient discounter of information; that is, by the time news hits the street, the market most probably has already accounted for it in stock prices. Many of the early essays warn of experts who guarantee that they will outperform the market as a whole and of relying on historical trends and charts.
One overarching theme is that investors should rely on their own investigations rather than following market trends or the advice of experts. That advice is sound, but this book is woefully short of concrete methods for performing those investigations. Although it warns of possible errors and suggests broad strategies for success, it gives few specifics that can be put to practical use. Perhaps its best advice is to invest for the long term and to ignore the daily ups and downs of stock prices. The book will be of most value to investors who need to be advised that there is no such thing as a sure thing before they place their bets in the market, but it will entertain anyone who reads the financial pages or has ever bought even a few shares of stock.
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