(Drivebycuriosity) - Is the stock market a game? Maybe not in the long run. The chart below shows that the market accompanies the climbing company profits over the time. But the short run might be different (I wrote about the difference here).
( source)
Adam Smith (a pseudonym for George Goodman) focuses on the short run. His book "The Money Game" (originally published 1968) is about games and gamblers on the stock market (amazon ). I read the book decades ago and reread it now on Kindle.
Smith/Goodman was very smart and had apparently quite an amount of market experience and economic knowledge. He also had read a lot - and learned from it. You might know the term "Wisdom of the Masses". Smith quotes David Mackay´s book "Extraordinary Popular Delusions and the Madness of Crowds" (published 1841!) and writes about bubbles, panics and crashes. One chapter is called "Is the Market really a Crowd".
Smith could write very well and described in an entertaining & humorous way the philosophies and psychological mindsets of stock market investors & speculators, the players. I enjoyed the row of case studies spiced with plenty of funny anecdotes about different kinds of persons who tried their luck. The text gets enriched by a lot quotes from Sigmund Freud, John Maynard Keynes and plenty of stock market gurus and other pundits. Smith muses about conflicting strategies - which apparently didn´t change much in all the years.
It`s interesting that in the 1960s existed almost as many computer and other hot technology stocks as today. Can we learn something from the ancient highflyers? There is also an entertaining chapter about speculation in cocoa - even today´s commodities investors could learn something.
"The Money Game" has aged well, its still fun to read and I could still learn something.
No comments:
Post a Comment