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My recommendation: 7/10

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Summary of notes and ideas

“the speculative episode always ends not with a whimper but with a bang. There will be occasion to see the operation of this rule frequently repeated.”

“To summarize: The euphoric episode IS protected and sustained by the will of those who are involved, in order to justify the circumstances that are making them rich. And it is equally protected by the will to ignore, exorcise, or condemn those who express doubts”

“The rule is that financial operations do not lend themselves to innovation. What is recurrently so described and celebrated is, without exception, a small variation on an established design, one that owes its distinctive character to the aforementioned brevity of the financial memory”

“All subsequent financial innovation has involved similar debt creation leveraged against more limited assets with only modifications in the earlier design. All crises have involved debt that, in one fashion or another, has become dangerously out of scale in relation to the underlying means of payment.”

“And present also was leverage; lots could be purchased for a cash payment of around 10 percent. Each”

“It is also the time generally required for a new generation to enter the scene, impressed, as had been its predecessors, with its own innovative genius. Thus impressed, it becomes bemused by the two further influences operating in this world that are greatly seductive of er-”

”…adding reference to a truth here more than sufficiently celebrated: “ Then will be rediscovered the oldest rule of Wall Street: Financial genius is before the fall”

“There are few references in life so common as that to the lessons of history. Those who know it not are doomed to repeat it”

“Individuals and institutions are captured by the wondrous satisfaction from accruing wealth. The associated illusion of insight is protected, in turn, by the oft-noted public impression that intelligence, one’s own and that of others, marches in close step with the possession of money. Out of that belief, thus instilled, then comes action-the bidding up of values, whether in land, securities, or, as recently, art. The upward movement confirms the commitment to personal and group wisdom. And so on to the moment of mass disillusion and the crash. This last, it will now be sufficiently evident, never comes gently. It is always accompanied by a desperate and largely unsuccessful effort to get out.”

“Let the following be one of the unfailing rules by which the individual investor and, needless to say, the pension and other institutional-fund manager are guided: there is the possibility, even the likelihood, of self-approving and extravagantly error-prone behavior on the part ofthose closely associated with money. Let that also be the continuing lesson of this essay”

“Let the following be one of the unfailing rules by which the individual investor and, needless to say, the pension and other institutional-fund manager are guided: there is the possibility, even the likelihood, of self-approving and extravagantly error-prone behavior on the part ofthose closely associated with money. Let that also be the continuing lesson of this essay”

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It’s a very short book compared to many others. Please pick up a copy and enjoy.

Read or listen on Scribd.com (2 months free with this link) or use a direct link! (without 2 free months)


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