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The Great Depression: A Diary
In the early 1920s, Benjamin Roth was a young lawyer fresh out of the army. He settled in Youngstown, Ohio, a booming Midwestern industrial town. Times were good - until the stock market crash of 1929. After nearly two years of economic crisis, it was clear that the heady prosperity of the Roaring Twenties would not return quickly.
As Roth began to grasp the magnitude of what had happened to American economic life, he set out to record his impressions in a diary - a document that would grow to span several volumes over more than a decade. Penning brief, clear-eyed notes on the crisis which unfolded around him, Roth struggled to understand the complex forces governing political and economic life. Yet he remained eager to learn from the crisis. As he wrote of what is now known as the Great Depression, "To the man past middle life it spells tragedy and disaster, but to those of us in the middle thirties it may be a great school of experience out of which some worth while lesson may be salvaged."
Roth's words from that unique time seem to speak directly to readers today. His perceptions and experiences have a chilling similarity to those of our own era. Fearful of inflation and skeptical of big government, Roth yearned for signs of true recovery, and eventually formed his own theories of how a prudent person might survive hard times. The Great A Diary, edited by James Ledbetter, editor of Slate's "The Big Money," and Roth's son, Daniel B. Roth, reveals another side of the Great Depression - one lived through by ordinary, middle-class folks, who on a daily basis grappled with a swiftly changing economy coupled with anxiety about the unknown future.
As Roth began to grasp the magnitude of what had happened to American economic life, he set out to record his impressions in a diary - a document that would grow to span several volumes over more than a decade. Penning brief, clear-eyed notes on the crisis which unfolded around him, Roth struggled to understand the complex forces governing political and economic life. Yet he remained eager to learn from the crisis. As he wrote of what is now known as the Great Depression, "To the man past middle life it spells tragedy and disaster, but to those of us in the middle thirties it may be a great school of experience out of which some worth while lesson may be salvaged."
Roth's words from that unique time seem to speak directly to readers today. His perceptions and experiences have a chilling similarity to those of our own era. Fearful of inflation and skeptical of big government, Roth yearned for signs of true recovery, and eventually formed his own theories of how a prudent person might survive hard times. The Great A Diary, edited by James Ledbetter, editor of Slate's "The Big Money," and Roth's son, Daniel B. Roth, reveals another side of the Great Depression - one lived through by ordinary, middle-class folks, who on a daily basis grappled with a swiftly changing economy coupled with anxiety about the unknown future.
288 pages, Hardcover
First published July 22, 2009
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June 24, 2016
I suspect there are few people who will love this book as much as I did. It is essentially a financial affairs diary kept by an attorney living in Youngstown, Ohio during the Great Depression. As an attorney with a thirsty interest in investment theory and an indecent obsession with all things Great Depression, this book was really right up my alley.
What made this book remarkable was the author's uncanny insight into investment theory. Over the course of a single decade -- the 1930's -- he singlehandedly developed the same theories it has taken professional financial analysts and economists decades to figure out. Quite simply, he *learned* from his (and his clients') experience of living through the great depression and determined the most advantageous ways to invest through high highs and low lows of the economic cycle. I was fascinated to watch his really very simple theories unfold as he observed and evaluated what was happening around him. His bits of wisdom included:
1) People grow their wealth by buying assets when they are CHEAP, not soaring.
2) Therefore, everyone should keep 40-50% of their assets *liquid* (meaning in investment grade bonds or treasuries) and the rest of their wealth in high-quality stocks (for us, think index funds, like S&P 500 index).
3) By keeping some assets liquid, you put yourself in a position that allows you to buy stocks when they are cheap.
4) Stocks will always crash. When stocks crash, bonds soar. When stocks crash, sell some bonds and buy stocks, then hold onto them no matter what.
5) Likewise, when stocks are soaring, bonds are usually dirt cheap. Therefore, when the stock market is setting record highs you should be buying more bonds and fewer stocks. This way, you are always buying assets when they are on sale. This is key.
The author repeatedly lamented that in 1929 people who were invested in the stock market were 100% invested in the stock market -- no one held cash or bonds. Therefore, when the market crashed they lost EVERYTHING. If people had held bonds/cash during the time of the crash, they could have had cash available to buy stocks when they were dirt cheap. The author mentioned a few people he spoke with who did exactly this and basically never had to work again. But it takes enormous patience, levelheadedness, and discipline.
The author also struggled with how to "time" the market. How do we know when it is going to turn? When to buy stocks vs. bonds? Today we know that this problem can be elegantly solved by sticking to a decided and set asset allocation (for instance, "own your age in bonds". If you're 40 years old, own 40% bonds, etc). So, say you own 60% stocks and 40% bonds. The stock market crashes. Stocks go down and bonds go up. Now your portfolio is 60% bonds and 40% stocks. Excellent! Stocks are on sale! Time to rebalance your portfolio by selling bonds and buying stocks so that you reach your 60% stock / 40% bond allocation again. And voila! -- you just bought stocks on sale merely by rebalancing your portfolio. We now know that if you do this rebalancing quarterly, you will do very well indeed. I only wish I could have given the author this missing piece of his puzzle. He had literally everything else figured out on his own.
A fabulous read.
What made this book remarkable was the author's uncanny insight into investment theory. Over the course of a single decade -- the 1930's -- he singlehandedly developed the same theories it has taken professional financial analysts and economists decades to figure out. Quite simply, he *learned* from his (and his clients') experience of living through the great depression and determined the most advantageous ways to invest through high highs and low lows of the economic cycle. I was fascinated to watch his really very simple theories unfold as he observed and evaluated what was happening around him. His bits of wisdom included:
1) People grow their wealth by buying assets when they are CHEAP, not soaring.
2) Therefore, everyone should keep 40-50% of their assets *liquid* (meaning in investment grade bonds or treasuries) and the rest of their wealth in high-quality stocks (for us, think index funds, like S&P 500 index).
3) By keeping some assets liquid, you put yourself in a position that allows you to buy stocks when they are cheap.
4) Stocks will always crash. When stocks crash, bonds soar. When stocks crash, sell some bonds and buy stocks, then hold onto them no matter what.
5) Likewise, when stocks are soaring, bonds are usually dirt cheap. Therefore, when the stock market is setting record highs you should be buying more bonds and fewer stocks. This way, you are always buying assets when they are on sale. This is key.
The author repeatedly lamented that in 1929 people who were invested in the stock market were 100% invested in the stock market -- no one held cash or bonds. Therefore, when the market crashed they lost EVERYTHING. If people had held bonds/cash during the time of the crash, they could have had cash available to buy stocks when they were dirt cheap. The author mentioned a few people he spoke with who did exactly this and basically never had to work again. But it takes enormous patience, levelheadedness, and discipline.
The author also struggled with how to "time" the market. How do we know when it is going to turn? When to buy stocks vs. bonds? Today we know that this problem can be elegantly solved by sticking to a decided and set asset allocation (for instance, "own your age in bonds". If you're 40 years old, own 40% bonds, etc). So, say you own 60% stocks and 40% bonds. The stock market crashes. Stocks go down and bonds go up. Now your portfolio is 60% bonds and 40% stocks. Excellent! Stocks are on sale! Time to rebalance your portfolio by selling bonds and buying stocks so that you reach your 60% stock / 40% bond allocation again. And voila! -- you just bought stocks on sale merely by rebalancing your portfolio. We now know that if you do this rebalancing quarterly, you will do very well indeed. I only wish I could have given the author this missing piece of his puzzle. He had literally everything else figured out on his own.
A fabulous read.
February 7, 2019
I read this book as part of a self-imposed homework assignment to learn more about financial history. The book's suggestion came from reading a smaller work by William Bernstein on personal finance. After reading about the dizzying heights of market speculation in "Devil Take the Hindmost" by Edward Chancellor, this book was a sobering reminder of the necessity to live within one's own means and to invest in a diversified portfolio for the long term.
I think this diary is extremely relevant and strangely comforting for the average American investor. Roth's personal accounts highlight many of the same confusions about finance and worries about the future that we have today. He writes honestly as he tries to understand the the psychology of investors, "structural problems of the 1920's boom economy", and government's efforts to address the depression. He admits that the events of the depression gave him the equivalent of a graduate degree in economics. By reading this diary we can reap some of the benefits.
I think this diary is extremely relevant and strangely comforting for the average American investor. Roth's personal accounts highlight many of the same confusions about finance and worries about the future that we have today. He writes honestly as he tries to understand the the psychology of investors, "structural problems of the 1920's boom economy", and government's efforts to address the depression. He admits that the events of the depression gave him the equivalent of a graduate degree in economics. By reading this diary we can reap some of the benefits.
April 12, 2012
So torn about this book. It's such a wonderful concept, and it covers ten years of U.S./world events during the Great Depression. Because it was a man's recounting of what he observed and how he felt about economic events, there wasn't a lot of "meat" to the book. There wasn't much compelling me to finish it, but I did just to see if more of a personal narrative developed. He points out some very good ideas about how to stay above water during a financial crisis, for example always having some liquid assets available so you can use cash to buy whatever you need, rather than tying it up in the bank. I found especially interesting his observations about WWI and the impending WWII. What I didn't like were the distracting "editor's notes" butting in throughout, explaining things that we didn't really need explained. Perhaps that's why I felt it was too hard to connect to the author, as well. All in all, worth a read (and it only took me a day to read it) because of the unique premise.
December 18, 2018
This classic book is a precious diary (starting in 1931) of a young lawyer, Benjamin Roth, from Youngstown, Ohio. His notes provide a vivid picture into the times of the great depression and the events leading into World War II. The interesting part is that if you were to erase the dates and just read the content of many of the entries in the diary you will be shocked to find out many of the same themes you encounter today. Even more surprising is Benjamin Roth's lament of people not learning from the past mistakes of the depression of 1893 or 1873. From political polarization to real estate speculation to Wall-Street's excesses to overbuilding, you will read through some common themes that have been a landmark of human folly throughout the modern era. The diary also provides great insight into the tough daily life in America during the depression years. Whats heartening to see is that Benjamin Roth, despite being a staunch Republican and a strong believer of market forces, went canvassing regularly in his town for parts of Franklin Roosevelt's New Deal, for the sake of the country. This book is a must read!
May 22, 2017
Reading historical diaries is important for internalizing how uncertain reality is. Read and internalize this! It is likely that a new depression or at least 2008 will happen in your lifetime so be prepared for the randomness such events entail.
Reading this book Benjamin Roth quickly earns your respect as a level headed observer. None the less - time after time he gets things wrong. For some time he thought the depression would only last for a year or two. Time after time he finds a great investment, that he would buy if only he had cash - and then its value plummets. Everything dropped in value for a year: so it looked like a great opportunity for buying, but next year they dropped by 60% and so on.
A paraphrase-quote "the stock market has made 8 fake starts upwards, and then reached new lows." Think about it - how could anyone know when to buy the super cheap assets. If you could just ride out the depression, you would make a 400% profit, but stuff seemed so random, and there was a feasible risk of revolution.
Some random new perspectives I got from the book:
* Japan attacked China in 1931 - likely because they thought the west was occupied by the depression, so it was a good time to attack. In 1932 he guessed the US might get involved. Odd?
* France seemed unaffected by the depression, it even appeared to gain. It really looked as if France would be the dominant power in Europe.
* During the depression countries all over the world dropped the gold standard - the practice of letting people exchange the national currency for gold, which was the ultimate reason you could trust paper money. Roth and others initially thought this basically meant nations had basically lost control and their currencies could soon be worthless.
* Cash was a great asset after 1929. By 1932 everything had become 50% cheaper.
* In depressions stupid spending stops. Ross says it became poor taste to own a fancy car, or having expensive parties. People learned to enjoy home, family and simple pleasures. I like what depression does to a culture. I sort of (but not really) want humanity to live through a permanent depression - with Soviet style science projects.
* In 1920 lawyers, doctors and others did not save. Instead they bought stupid stuff like fancy clothes - just like people do today. No matter how rich humanity becomes most people can find the stupidity to buy a shirt expensive enough to make him poor.
* A funny fact from this book is that Roth tells you he, his parents, and grand parents all used to think real estate was the best long term investment. That erroneous idea goes back so, so far.
The most important thing I internalized from reading this book is that the depression just went on and on and on with several false recoveries. If you invested 100% of your money when prices had fallen by 60% you would not get your money back for about a decade. Unless you sold at the exact right time during a false recovery. The entire decade from 1929 to 1939 makes no sense, although people can spin persuasive stories about them.
This insight (which I probably had intellectually, but not on a gut level) makes me reevaluate my investment plan for a possible crash. I want to prosper during a disastrous decade, and to come out rich on the other side. Some ideas of how to do this:
* Always own three years expenses worth in cash. In my case 20 000 dollars.
* In case of 50% drop in prices invest 40% of my money except the 20 000 buffer.
* In case of 90% drop from pre-crash-level invest an additional 30%
* The numbers do not add up - but that does not matter. A depression can be long. We have one on record that lasted a decade, so a two decade one is plausible. Extra investable funds makes sense.
* Invest diversely. Stock, many currencies including Bitcoin, bonds, it is ok to buy a home that I am willing to spend a long time in, but only if the cash payment of the home would cost less than 40% of my funds.
In years where I guess the market is not overpriced, as measured by Price-earnings ratios, I hold 40% stock, 50% conservative assets and cash, 5 % weird stuff like Bitcoin, that have unlimited potential payoff. In the incalculable chance that Bitcoin becomes a widely used currency its value could increase million fold - meaning that not owning at least a little bit is stupid. Makes sense owning some good lottery tickets. But only letting them be less than 10% of your assets.
Reading this book Benjamin Roth quickly earns your respect as a level headed observer. None the less - time after time he gets things wrong. For some time he thought the depression would only last for a year or two. Time after time he finds a great investment, that he would buy if only he had cash - and then its value plummets. Everything dropped in value for a year: so it looked like a great opportunity for buying, but next year they dropped by 60% and so on.
A paraphrase-quote "the stock market has made 8 fake starts upwards, and then reached new lows." Think about it - how could anyone know when to buy the super cheap assets. If you could just ride out the depression, you would make a 400% profit, but stuff seemed so random, and there was a feasible risk of revolution.
Some random new perspectives I got from the book:
* Japan attacked China in 1931 - likely because they thought the west was occupied by the depression, so it was a good time to attack. In 1932 he guessed the US might get involved. Odd?
* France seemed unaffected by the depression, it even appeared to gain. It really looked as if France would be the dominant power in Europe.
* During the depression countries all over the world dropped the gold standard - the practice of letting people exchange the national currency for gold, which was the ultimate reason you could trust paper money. Roth and others initially thought this basically meant nations had basically lost control and their currencies could soon be worthless.
* Cash was a great asset after 1929. By 1932 everything had become 50% cheaper.
* In depressions stupid spending stops. Ross says it became poor taste to own a fancy car, or having expensive parties. People learned to enjoy home, family and simple pleasures. I like what depression does to a culture. I sort of (but not really) want humanity to live through a permanent depression - with Soviet style science projects.
* In 1920 lawyers, doctors and others did not save. Instead they bought stupid stuff like fancy clothes - just like people do today. No matter how rich humanity becomes most people can find the stupidity to buy a shirt expensive enough to make him poor.
* A funny fact from this book is that Roth tells you he, his parents, and grand parents all used to think real estate was the best long term investment. That erroneous idea goes back so, so far.
The most important thing I internalized from reading this book is that the depression just went on and on and on with several false recoveries. If you invested 100% of your money when prices had fallen by 60% you would not get your money back for about a decade. Unless you sold at the exact right time during a false recovery. The entire decade from 1929 to 1939 makes no sense, although people can spin persuasive stories about them.
This insight (which I probably had intellectually, but not on a gut level) makes me reevaluate my investment plan for a possible crash. I want to prosper during a disastrous decade, and to come out rich on the other side. Some ideas of how to do this:
* Always own three years expenses worth in cash. In my case 20 000 dollars.
* In case of 50% drop in prices invest 40% of my money except the 20 000 buffer.
* In case of 90% drop from pre-crash-level invest an additional 30%
* The numbers do not add up - but that does not matter. A depression can be long. We have one on record that lasted a decade, so a two decade one is plausible. Extra investable funds makes sense.
* Invest diversely. Stock, many currencies including Bitcoin, bonds, it is ok to buy a home that I am willing to spend a long time in, but only if the cash payment of the home would cost less than 40% of my funds.
In years where I guess the market is not overpriced, as measured by Price-earnings ratios, I hold 40% stock, 50% conservative assets and cash, 5 % weird stuff like Bitcoin, that have unlimited potential payoff. In the incalculable chance that Bitcoin becomes a widely used currency its value could increase million fold - meaning that not owning at least a little bit is stupid. Makes sense owning some good lottery tickets. But only letting them be less than 10% of your assets.
July 9, 2018
It is hard to like a book like this. The flaws seem to vastly outnumber the good parts -- but that gives a somewhat skewed perspective. I didn't "like" this book but I'd still recommend others to read the first 100-150 pages or so, which is the heart of the depression. The remainder of the book is more about the years of the New Deal when things are okay (though not necessarily great) and the (Republican) author mostly complains about Roosevelt's policies. The most interesting parts were about the cavalcade of bank closures and the impacts that had on the communities. It is also surprisingly optimistic. No doubt a large part of that is because the author had a job (even if it didn't always pay well), was never foreclosed, etc. But there's little of the doom & gloom I usually associate with the Great Depression.
It is one man's diary -- with an exclusive focus on financial stuff -- over the course of a decade. It gets repetitive. It doesn't start until 1931 -- a full year and a half after the crash, so it misses some of the best part. It is also missing 1935 -- that part of the diary was lost -- which was when some of the biggest parts of the New Deal went into effect. Both of those are very unfortunate omissions.
It is curiously antiseptic. There's surprisingly little feeling conveyed of the pain of the depression. The author will occasionally mention statistics -- how 30,000 people in his hometown are on government assistance -- but it never really has much feeling behind it. The few emotions that come through often feel a bit selfish -- about how "the professional man" (i.e. him) is being left behind while laborers and farmers are being helped.
It is quite repetitive. Lots of "I wish I had some spare cash because I could make a killing by investing now". Lots of "my business isn't going well". It is surprisingly lacking any insight into the author's personal or family situation other than the generic complaints about his business not going well. For instance, I don't think his wife is mentioned a single time. How did they manage to survive all those years if his business was so poor? With all those bank closures, did it ever affect any of his cash? Or was he a hoarder?
There is no real plot to keep the reader engaged. Despite the author saying the depression was like a post-graduate course in finance, there's no real sense that he learned much or was changed by the experience. He started as a staunch conservative Republican and everything he saw is interpreted as confirmation of his previously held views. One line that really struck me was his profound belief that the depression should be left to "work itself out naturally" instead of having any government help at all; an easy position to take when he wasn't one of the 13 million unemployed and never had his house foreclosed. It was also interesting to see perennial talking points appearing in the distant past. The unshakeable belief in the trust of the government when it comes to government bonds ("we can only trust the government") paired with deep skepticism of government programs. Constant cries that massive inflation is right around the corner any day now. Constant cries that "massive" government debt is going to destroy America.
It was written as a personal diary, so I can hardly fault these short comings. It isn't written to be academic, to explain why the author believes what he does, or to convince you to believe the same things. But all of those things also made it hard to keep reading, which is why I recommend: don't force yourself to be a completionist with this book. Read the first 100 pages or so, which is the best part. Then move on to something else to read.
It is one man's diary -- with an exclusive focus on financial stuff -- over the course of a decade. It gets repetitive. It doesn't start until 1931 -- a full year and a half after the crash, so it misses some of the best part. It is also missing 1935 -- that part of the diary was lost -- which was when some of the biggest parts of the New Deal went into effect. Both of those are very unfortunate omissions.
It is curiously antiseptic. There's surprisingly little feeling conveyed of the pain of the depression. The author will occasionally mention statistics -- how 30,000 people in his hometown are on government assistance -- but it never really has much feeling behind it. The few emotions that come through often feel a bit selfish -- about how "the professional man" (i.e. him) is being left behind while laborers and farmers are being helped.
It is quite repetitive. Lots of "I wish I had some spare cash because I could make a killing by investing now". Lots of "my business isn't going well". It is surprisingly lacking any insight into the author's personal or family situation other than the generic complaints about his business not going well. For instance, I don't think his wife is mentioned a single time. How did they manage to survive all those years if his business was so poor? With all those bank closures, did it ever affect any of his cash? Or was he a hoarder?
There is no real plot to keep the reader engaged. Despite the author saying the depression was like a post-graduate course in finance, there's no real sense that he learned much or was changed by the experience. He started as a staunch conservative Republican and everything he saw is interpreted as confirmation of his previously held views. One line that really struck me was his profound belief that the depression should be left to "work itself out naturally" instead of having any government help at all; an easy position to take when he wasn't one of the 13 million unemployed and never had his house foreclosed. It was also interesting to see perennial talking points appearing in the distant past. The unshakeable belief in the trust of the government when it comes to government bonds ("we can only trust the government") paired with deep skepticism of government programs. Constant cries that massive inflation is right around the corner any day now. Constant cries that "massive" government debt is going to destroy America.
It was written as a personal diary, so I can hardly fault these short comings. It isn't written to be academic, to explain why the author believes what he does, or to convince you to believe the same things. But all of those things also made it hard to keep reading, which is why I recommend: don't force yourself to be a completionist with this book. Read the first 100 pages or so, which is the best part. Then move on to something else to read.
May 24, 2022
5 stars not necessarily because it's a must-read, but as a thank-you to the author for taking the time. I've really grown to appreciate the power of a thorough journal. History books are filled with 'resulting' and are skewed by the known outcomes. Reading a journal like this does a way better job of capturing how it actually felt to live through. It includes all the things that one though would happen, but didn't actually happen. Especially cool in this instance is how Roth goes back and annotates his guesses with a "Yep, this was correct" or a "Nope, way off." I think this is a very humbling experience for a person, and it leads to valuable personal growth. I have kept an occasional journal since 2020 and a daily journal since 2022, and this reinforces my belief in the power of doing so. This book really whet my historical appetite.
January 12, 2023
A laymen goes through the great depression and gives his opinions on investing in a series of diary entries. It's quite interesting to see the feelings during the great depression. He eventually gives his take on what he should have done... which is to time the market perfectly! Obviously, its impossible to do so. I think it's a good primer on why "stay calm and stick to the plan" is a good strategy.
February 9, 2012
Who would have thought that cash was trash during a depression? Well it is if you can't get it out of the bank. People sold their passbook savings accounts for 60¢ on the dollar! Government bonds were the only useful form of liquid purchasing power. A fantastic account.
September 18, 2022
The book is a selective reproduction of diary of Benjamin Roth, who decided to write or journal the happenings during the great depression, and successfully captured the rollercoaster ride, and the personal voes faced by Urban Modern America during "the Great Depression". Mr. Roth, although was a layman on economy and market analysis and had political affiliations towards republicans, but his observations were methodical and unbiased upto major extent. You simply see the investment and financial wisdom grow, in his gradual diary writting. His small but careful observations on bank closures, stock valuations, trade unions and impact on his profession(lawyer) makes this book, feel personal. His market predictions and subsequent reality check comments, shows us his unbiased and scientific approach. Various "riches to rags" anecdotes and subsequent financial learnings, which are now major investment principals like Value Investing & Dollar cost averaging, were thoroughly brainstormed by Mr. B Roth in the book. A great investment book.
This entire review has been hidden because of spoilers.
April 16, 2020
This is mostly a financial diary of the 1930’s by a lawyer. It would be more worthwhile if Roth actually bought stocks rather than talk about buying them the entire time, I realise he had no money to do so though. Its has a pessimistic tone which got a little boring sometimes. Its worth reading though to help you understand how worthless economic predictions are and shows what it’s like to live through history not look back in hindsight. Roth struggles with how to make decisions in uncertainty which I found relates to the current time - a global pandemic. This was probably my favourite quote - “This depression has indelibly impressed on my mind one thing—and that is the value of having on hand sufficient capital to cover emergencies.” 90 year old advice still true today.
December 29, 2022
Finest piece of financial history
March 14, 2022
One of the best books I’ve read in a while. Written from journal account during the Great Depression. Very interesting perspective of what was happening in real speed. As the author was living it. Which is crazy.
Interesting also Because the author was from Youngstown Ohio. Very close to where I live. So when he accounts of buildings being built or torn down. Families mentioned. And different landmarks. It hits home.
Makes you wonder if the ebbs and flows of the Economy today; mirror some of the things that happened before and even during the Great Depression?
Interesting also Because the author was from Youngstown Ohio. Very close to where I live. So when he accounts of buildings being built or torn down. Families mentioned. And different landmarks. It hits home.
Makes you wonder if the ebbs and flows of the Economy today; mirror some of the things that happened before and even during the Great Depression?
May 3, 2022
As he watches the market mostly plunge in the 1931-1932 period, he seems mostly to feel that stocks are a sucker’s game. At the same time, he is tantalized by the prospect of bargain hunting among stocks— notably railroads and steel
How much debt is too much debt —for a household, a company, or a government? What is the most secure way to guarantee return on an investment without exposure to excessive risk (whatever excessive risk is)? How much can government prop up private enterprise without creating a moral hazard that hinders market dynamism? Why can’t economies continue to expand at a steady, manageable pace without lapsing into destructive boom-and-bust cycles?
Insurance for the unemployed and guaranteed Social Security income for the elderly and infirm are standard features of the American economy; without them, the impact of current recessions on individuals could easily be as bad as it was during the Depression. On the federal policy level, the government guarantee of bank deposits up to a certain monetary amount makes panicky bank runs less likely and less damaging
Banks will lend you an umbrella when the sun is shining and then demanding it back when it rains.
I feel more and more convinced that the time to buy stocks has not yet arrived because the blue chip stocks have not yet come down even tho the depression is already two years old.
There is simply no money in circulation.
I talked to a very prominent real estate man today who developed one of the best residential plots in Youngstown but went broke with the coming of the depression because everything he had was heavily mortgaged and people stopped paying on the property they had bought.
An interesting side light of the depression was that unemployed people became interested in small gambling games and the inventors of these games made considerable money. People lost all confidence in the old virtues of saving. They were willing to bet small amounts in the hope of getting large returns.
I am forced to the conclusion that in prosperous times a man must be cautious and preserve his capital and be careful not to overexpand his business or to go too deeply in debt relying on a continuation of good business to pay the debt.
How much debt is too much debt —for a household, a company, or a government? What is the most secure way to guarantee return on an investment without exposure to excessive risk (whatever excessive risk is)? How much can government prop up private enterprise without creating a moral hazard that hinders market dynamism? Why can’t economies continue to expand at a steady, manageable pace without lapsing into destructive boom-and-bust cycles?
Insurance for the unemployed and guaranteed Social Security income for the elderly and infirm are standard features of the American economy; without them, the impact of current recessions on individuals could easily be as bad as it was during the Depression. On the federal policy level, the government guarantee of bank deposits up to a certain monetary amount makes panicky bank runs less likely and less damaging
Banks will lend you an umbrella when the sun is shining and then demanding it back when it rains.
I feel more and more convinced that the time to buy stocks has not yet arrived because the blue chip stocks have not yet come down even tho the depression is already two years old.
There is simply no money in circulation.
I talked to a very prominent real estate man today who developed one of the best residential plots in Youngstown but went broke with the coming of the depression because everything he had was heavily mortgaged and people stopped paying on the property they had bought.
An interesting side light of the depression was that unemployed people became interested in small gambling games and the inventors of these games made considerable money. People lost all confidence in the old virtues of saving. They were willing to bet small amounts in the hope of getting large returns.
I am forced to the conclusion that in prosperous times a man must be cautious and preserve his capital and be careful not to overexpand his business or to go too deeply in debt relying on a continuation of good business to pay the debt.
June 2, 2019
This book is the diary of a man who was a lawyer in Youngstown, Ohio during and after the Great Depression. The man who wrote it is trying to do two things as he writes: First, make sense of the depression, try and figure out why it happened and when(or if) it will end; and two, analyze how to invest during a depression of this magnitude. Some takeaways:
1. Lawyers did not do very well during the Great Depression. People didn’t have money, businesses were cratering, real estate wasn’t selling, so there was little work for lawyers, especially independent lawyers.
2. Real estate was a very bad investment in the Great Depression, unless you had cash to buy at the bottom of the market, which few did, and calling the bottom was impossible when it actually happened. People had no money to make house payments so many fell behind, but the cost of getting them removed was great and there was no one else to rent to, so people with lots of real estate (especially if they were bought as investments) ended up owing taxes on the properties with no income which caused very great problems. The problems got so bad that owners were razing buildings to reduce their tax burdens.
3. Mr. Roth believes that there was good money to be made at the bottoming out of the stock market because the companies that would survive were great values. There were some problems however. First, the investor needed money and few had money. Second, the investor needed to be patient with his investment and be willing to ride out declines. Third, the market zoomed up in 1933-35, then crashed almost to 1932 lows, then zoomed up again in 1936, then came the second Depression in 1937 and by 1940, the market was again down near the 1932 lows. Investing was very difficult during the Great Depression, though there was money to be made.
4. If there was a formula for success during the Great Depression it was to buy value, and this seems to be the long-term formula for success at all times: buy low and sell high. Current investors forget this truth at their peril.
I very much enjoyed this book.
1. Lawyers did not do very well during the Great Depression. People didn’t have money, businesses were cratering, real estate wasn’t selling, so there was little work for lawyers, especially independent lawyers.
2. Real estate was a very bad investment in the Great Depression, unless you had cash to buy at the bottom of the market, which few did, and calling the bottom was impossible when it actually happened. People had no money to make house payments so many fell behind, but the cost of getting them removed was great and there was no one else to rent to, so people with lots of real estate (especially if they were bought as investments) ended up owing taxes on the properties with no income which caused very great problems. The problems got so bad that owners were razing buildings to reduce their tax burdens.
3. Mr. Roth believes that there was good money to be made at the bottoming out of the stock market because the companies that would survive were great values. There were some problems however. First, the investor needed money and few had money. Second, the investor needed to be patient with his investment and be willing to ride out declines. Third, the market zoomed up in 1933-35, then crashed almost to 1932 lows, then zoomed up again in 1936, then came the second Depression in 1937 and by 1940, the market was again down near the 1932 lows. Investing was very difficult during the Great Depression, though there was money to be made.
4. If there was a formula for success during the Great Depression it was to buy value, and this seems to be the long-term formula for success at all times: buy low and sell high. Current investors forget this truth at their peril.
I very much enjoyed this book.
April 28, 2010
I found this a fascinating read - mostly. There are entries that perhaps would have been better left out and they bordered on tedious. I find books about the Depression tend to fall into 2 categories: the black and white image of depressed poverty or the glories of the New Deal. This book is the life of one man. Just a guy who ponders what the heck is going on. I never tire of seeing the ways history repeats itself and Roth does a fine job of pointing that out.
August 15, 2017
I was disappointed that it didn’t include more stories of life during the depression. A repetitive diary account of the status of the stock market. The investment hindsight to buy low and sell high was not insightful, but after reading this book I was motivated to increase my cash reserves.
March 10, 2022
As a book, nothing spectacular. But for investors and historians, fantastic way to understand better the era of Great Depression.
April 25, 2021
It was oddly comforting, reading a book like this now. Firstly, I can never get enough of diary entries, so the fact that this was straight from Mr. Roth's personal notebooks with a few editor's notes put in for clarity and context was perfect. Secondly, his viewpoint on the depression as a fairly ordinary "professional class" man was unique to me and, as he often reiterates, an overlooked one. I found so many parallels to what is happening today: from certain industries benefitting while many others had to completely change the way they did business or close up shop to the controversial nature of many government plans and programs to assist those in need. Roth became very interested in economics and finance as a result and began to more closely follow politics, both at home and abroad, as well. As he notes in one entry, he considered the depression to be a "post-graduate" course for him in all these topics.
I highly recommend this as a window for looking back on the Great Recession, but even more for the pandemic and how upended lives can become in such a short period of time.
Favorite quotes: "Talked to W.W. Zimmerman today. He said, 'This is the most puzzling period of my life. I can't understand things. Everything that I thought was right is now proving to be wrong.'" - April 14, 1932
"These are stirring days and in spite of our troubles it is good to be alive. I am reminded often of the days of the world war when families and businesses were mercilessly uprooted and broken. It is the same today. Fundamentals are being changed and new foundations are being placed for what we all hope will be a new era of prosperity." - June 23, 1932
"Sixteen years ago under Wilson we became 'internationally minded.' We fought in the 'war to end all war' and today the world is in chaos with constant threat of war. We loaned billions to Europe and now can't get it back. Time and again in this period the U.S. interfered in European affairs as a good Samaritan and every time we got a spanking. Because of these huge loans and the neglect of our internal affairs, our country is today facing one of the most serious crises in her history. With all its dangers it seems that the world is not yet ready for internationalism and our best policy for the present is to keep our fingers out of Europe." - November 10, 1933
I highly recommend this as a window for looking back on the Great Recession, but even more for the pandemic and how upended lives can become in such a short period of time.
Favorite quotes: "Talked to W.W. Zimmerman today. He said, 'This is the most puzzling period of my life. I can't understand things. Everything that I thought was right is now proving to be wrong.'" - April 14, 1932
"These are stirring days and in spite of our troubles it is good to be alive. I am reminded often of the days of the world war when families and businesses were mercilessly uprooted and broken. It is the same today. Fundamentals are being changed and new foundations are being placed for what we all hope will be a new era of prosperity." - June 23, 1932
"Sixteen years ago under Wilson we became 'internationally minded.' We fought in the 'war to end all war' and today the world is in chaos with constant threat of war. We loaned billions to Europe and now can't get it back. Time and again in this period the U.S. interfered in European affairs as a good Samaritan and every time we got a spanking. Because of these huge loans and the neglect of our internal affairs, our country is today facing one of the most serious crises in her history. With all its dangers it seems that the world is not yet ready for internationalism and our best policy for the present is to keep our fingers out of Europe." - November 10, 1933
April 2, 2022
A fantastic journal that gives a middle-class view of the day-to-day happenings during the great depression.
- It seems that if another depression were to happen (high unemployment, crashing stocks, and low bank liquidity) then you would want to have no debt, a good chunk of cash on hand, and as little reliance on a paycheck as possible (assuming stocks are crashing you would need no reliance on stock sales for income as well)
-it is interesting to see that even after the great depression people seem to completely forget how bad it was to be in debt and yet they jump right back into it when things start "booming" again in 1937.
-An important point of emphasis should be the story of men who had a good amount of savings during the depression and tried to still turn it into even more money but ended up losing it all. They later said they wished they settled for moderate returns and just protected the principal. (This aligns with my money philosophy of not needing to hit a huge "home run" but rather just get on base consistently)
- Supposedly FDIC & NCUA are there to protect the patrons balances and to avoid bank runs that happened during the great depression when people were worried that their bank would be the next to shutdown and bankrupt their savings. This is all well and good but what would truly happens during tough times? Is this a warning to not have TOO much in savings that could get wiped out of certain policies change? It's possible that Savings with banks and Investments with brokers may never be 100% bulletproof.
- ***If cash is king and banks limit withdrawals during depression-like times, does it make sense to keep physical cash ESPECIALLY while savings accounts are paying next to nothing?
-"nobody seems to be able to figure out just why the market should go up except perhaps that it is being maneuvered for political purposes" (written while things are still pretty bad in Youngstown)
-"Banks and Large Corporations will continue to fail in great crises but our ultimate faith must be in the government" (discussing why investing in government bonds is a good idea and why it is ok to focus on maintaining principal with a good reliable interest rate rather than getting too speculative with all stocks- a theory worth looking into)
- It seems that if another depression were to happen (high unemployment, crashing stocks, and low bank liquidity) then you would want to have no debt, a good chunk of cash on hand, and as little reliance on a paycheck as possible (assuming stocks are crashing you would need no reliance on stock sales for income as well)
-it is interesting to see that even after the great depression people seem to completely forget how bad it was to be in debt and yet they jump right back into it when things start "booming" again in 1937.
-An important point of emphasis should be the story of men who had a good amount of savings during the depression and tried to still turn it into even more money but ended up losing it all. They later said they wished they settled for moderate returns and just protected the principal. (This aligns with my money philosophy of not needing to hit a huge "home run" but rather just get on base consistently)
- Supposedly FDIC & NCUA are there to protect the patrons balances and to avoid bank runs that happened during the great depression when people were worried that their bank would be the next to shutdown and bankrupt their savings. This is all well and good but what would truly happens during tough times? Is this a warning to not have TOO much in savings that could get wiped out of certain policies change? It's possible that Savings with banks and Investments with brokers may never be 100% bulletproof.
- ***If cash is king and banks limit withdrawals during depression-like times, does it make sense to keep physical cash ESPECIALLY while savings accounts are paying next to nothing?
-"nobody seems to be able to figure out just why the market should go up except perhaps that it is being maneuvered for political purposes" (written while things are still pretty bad in Youngstown)
-"Banks and Large Corporations will continue to fail in great crises but our ultimate faith must be in the government" (discussing why investing in government bonds is a good idea and why it is ok to focus on maintaining principal with a good reliable interest rate rather than getting too speculative with all stocks- a theory worth looking into)
June 25, 2021
This book reinforced a lot of my strongly held investment beliefs, including:
* Stock market performance doesn’t cleanly correlate in a predictable manner with recent events or follow past patterns.
* It can take 10 or 20 years for a company’s stock to trade at the valuation it deserves to (even if business is humming along well).
* Buying on margin is a tricky game to play. Past success can give you a false sense of confidence and make you more susceptible to being wiped out in the future.
Some new topics I learned about in this book:
* Real estate - At one point renters were unable to pay rent, but the government would still expect to collect property tax. Some landlords tore down buildings to reduce tax liabilities.
* Conscription - A lot of the WW2 conscripts couldn’t serve because they were severely malnourished.
* Deflation/Inflation:
* During the depression, a lot of countries went off the gold standard and inflated their currency to kick-start their economies.
* The US was one of the last countries to inflate the dollar.
* Before inflating the dollar (to double the supply & 1/2 the value), there was rampant deflation in the US. Farmers struggled, as the price of their crop dropped and they couldn’t pay their mortgages.
* Lots of farmers lost everything they had as banks foreclosed on them.
* Some farmers attempted to burn their excess crop to raise prices, while people starved.
* The gov’t put in policies to guarantee a minimum price on crop, which negatively impacted the public that couldn’t afford food at these higher prices.
* Though the public feared inflation, raising taxes or cutting back on government spending was unpopular.
* It took 20 years from when the gov’t started printing more money and when inflation actually started impacting people, by the time it did, people had forgotten about it.
* Stock market performance doesn’t cleanly correlate in a predictable manner with recent events or follow past patterns.
* It can take 10 or 20 years for a company’s stock to trade at the valuation it deserves to (even if business is humming along well).
* Buying on margin is a tricky game to play. Past success can give you a false sense of confidence and make you more susceptible to being wiped out in the future.
Some new topics I learned about in this book:
* Real estate - At one point renters were unable to pay rent, but the government would still expect to collect property tax. Some landlords tore down buildings to reduce tax liabilities.
* Conscription - A lot of the WW2 conscripts couldn’t serve because they were severely malnourished.
* Deflation/Inflation:
* During the depression, a lot of countries went off the gold standard and inflated their currency to kick-start their economies.
* The US was one of the last countries to inflate the dollar.
* Before inflating the dollar (to double the supply & 1/2 the value), there was rampant deflation in the US. Farmers struggled, as the price of their crop dropped and they couldn’t pay their mortgages.
* Lots of farmers lost everything they had as banks foreclosed on them.
* Some farmers attempted to burn their excess crop to raise prices, while people starved.
* The gov’t put in policies to guarantee a minimum price on crop, which negatively impacted the public that couldn’t afford food at these higher prices.
* Though the public feared inflation, raising taxes or cutting back on government spending was unpopular.
* It took 20 years from when the gov’t started printing more money and when inflation actually started impacting people, by the time it did, people had forgotten about it.
This entire review has been hidden because of spoilers.
April 6, 2021
The was recommended by Scott Pape (aka The Barefoot Investor). It follows the musing and observations of Roth starting in 1930 following the Great Crash of 1929. He wrote this as a personal diary of reflections of what he could learn from living through this period. I was initially put off by the 618 e-pages, but a significant number of the entries are less than a paragraph. I was easily able progress rapidly through the book and enjoy it.
I learned or reinforced the sort of conservative financial advice Pape gives as the Barefoot Investor. Build wealth overtime, diversify risk, take ‘expert’ advice with a grain of salt, and maintain enough liquid capital to take advantage of opportunities. I changed my own investment profile following reading this. Roth is able to reflect that most ‘expert’ advice seems little better than guessing.
Roth observes two qualities required to become wealthy. 1/ The ability to consistently spend less than you earn. 2/ The wisdom and courage to place your capital where it has the opportunity to compound over time. He suggests plenty of people have one characteristics, but few have both. I aspire to have both and things seem to be heading in the right direction. This book adds to my desire to develop financial literacy and wisdom. I recommend it to anyone who shares my aspirations.
I learned or reinforced the sort of conservative financial advice Pape gives as the Barefoot Investor. Build wealth overtime, diversify risk, take ‘expert’ advice with a grain of salt, and maintain enough liquid capital to take advantage of opportunities. I changed my own investment profile following reading this. Roth is able to reflect that most ‘expert’ advice seems little better than guessing.
Roth observes two qualities required to become wealthy. 1/ The ability to consistently spend less than you earn. 2/ The wisdom and courage to place your capital where it has the opportunity to compound over time. He suggests plenty of people have one characteristics, but few have both. I aspire to have both and things seem to be heading in the right direction. This book adds to my desire to develop financial literacy and wisdom. I recommend it to anyone who shares my aspirations.
August 15, 2020
Some interesting insights, some worthwhile review of history, but awfully repetitive and not particularly well written. Could have used more editing. Not sure how many times Roth repeats the line (or variations of it) about having "liquid cash" to invest in the market during downturns, but it's too many times. Roth's political views are also frustrating - after experiencing what led up to the Great Depression, he seems to hold onto the idea that private industry should just be left to its own devices, and things will just work themselves out. Roth: what do you think led to this depression in the first place? Greedy bankers and industry elites being allowed to do whatever the hell they wanted to do, essentially. Roth seems to have zero appreciation for FDR (one of the greatest Presidents ever, surely, if not the greatest) and seems to think the New Deal was just a waste of money. Not once in the book does he acknowledge that the New Deal helped pull the country out of the Depression, and that its reforms were important and necessary. Even to the bitter end Roth was anti-FDR, campaigning for Willkie (anyone remember him?) in 1940. History will not remember Roth's political views well.
July 31, 2022
When I found this book, I thought it would be a good addition to my U.S. History shelf. It survived the home library purge of 2022. Wanting to read something a little more educational than another mystery novel this summer, I curled up with it today. I couldn't put it down!! We don't need to be told any tales from our esteemed leaders, we feel the crunch at the pump and in the grocery store, if we can find what we want at all. This diary, by a lawyer from Ohio, details his personal experience as he writes of the depression years and years between the wars. He charts the repeat of actions that led to the market crash and has deep insights into how to weather the storm that are beneficial for readers currently. Recession, depression, war, high interest rates, low pay for farmers and industry workers, college students unable to find or keep a job let alone a career, threat of foreclosure, etc. For anyone wanting to know more about The New Deal, the Roosevelt years and Second World War, economics and the depression, I highly recommend this book. Will be keeping this book for a future reread.
November 18, 2017
During the great depression, banks fearing a bank run held onto their deposits. So if you had money in the bank, you couldn't withdraw it! People were selling their bank pass books for 60 cents on the dollar in order to get their hands on cash. Real estate investors with hotels and other buildings tore down the structures; this is so that they could lower the assessed value and afford the property tax payments. Work for all types of people including lawyers dried up. Stocks took a beating and didn't recover for almost a decade. It was a brutal and hopeless time.
This book recounts the days, weeks and years that made up the depression from the perspective of a sole practitioner lawyer Benjamin Roth in the then prosperous town of Youngstown, Ohio, in the region where the burgeoning US steel industry was based. Roth's diary recounts the events of the day including stock prices of leading companies and the fate of local banks.
If you are a student of economic history or the stock market, this book is a fascinating read (or audio book listen).
This book recounts the days, weeks and years that made up the depression from the perspective of a sole practitioner lawyer Benjamin Roth in the then prosperous town of Youngstown, Ohio, in the region where the burgeoning US steel industry was based. Roth's diary recounts the events of the day including stock prices of leading companies and the fate of local banks.
If you are a student of economic history or the stock market, this book is a fascinating read (or audio book listen).
June 9, 2020
Read this book if you want a firsthand perspective of how hard life was for the average working professional or shopkeeper during the Great Depression. Ignore the editor’s notes (those were mostly distracting and took away from the text itself). I thought it was a bit long but due to it being a diary, there’s not really a climax or regular story structure. I most liked Roth’s insights on keeping liquidity during a depression and making sure to live below one’s means. He also mentioned that lots of people including himself couldn’t invest much cash because they didn’t have enough extra money to do so. After reading his thoughts on investing, I increased my emergency fund and started putting extra money after that into investments. He has some qualms about investing in individual stocks (if he were living today he would probably be an index fund investor). Overall a neat look at everyday life and the financial woes of the 1930s, with timeless advice for investors and entrepreneurs set closer to the beginning of the diary.
October 4, 2020
Mr. Roth does an excellent job capturing the sentiment of a nation in crisis. As a student of history, Roth attempts to make sense out of uncertain times by reflecting on previous depressions and looking for trends that might inform his expectations and guide His actions if, as he often laments, he only had some money.
Also a student of history, I found the parallels between Roth's socioeconomic crisis of the 1930s that had public health repercussions, and today's public health crisis that has socioeconomic implications very interesting. Through Roth's writing we see a nation in turmoil. High unemployment leaving vast populations with food insecurities as farmers are forced to dump their supplies. Racial and antisemitic sentiment is permeating society and fueling unrest. Federal guards are called to disperse protesters at the Capitol. A nation, following the Great War, is promoting America First nationalism over globalism. And a heated presidential election (or 3) looms. It all seemed too familiar some 90 years later. A great first person account of trying times.
Also a student of history, I found the parallels between Roth's socioeconomic crisis of the 1930s that had public health repercussions, and today's public health crisis that has socioeconomic implications very interesting. Through Roth's writing we see a nation in turmoil. High unemployment leaving vast populations with food insecurities as farmers are forced to dump their supplies. Racial and antisemitic sentiment is permeating society and fueling unrest. Federal guards are called to disperse protesters at the Capitol. A nation, following the Great War, is promoting America First nationalism over globalism. And a heated presidential election (or 3) looms. It all seemed too familiar some 90 years later. A great first person account of trying times.
January 9, 2023
"We bid farewell to 1932 without regret and we welcome 1933 with a fervent prayer for better days."
Wat een geweldig stuk gedocumenteerde geschiedenis. Dit dagboek is geschreven door Benjamin Roth en beslaat de tijdsperiode 1931 tot en met de aanval op Pearl Harbor in 1941. Het dagboek richt zich volledig op de financiële context in die tijd. Verwacht veel verhalen en analyses over de (aandelen)markt, werkloosheid, de impact hiervan en andere economische factoren.
Het leuke aan het dagboek is dat Benjamin Roth geen belegger was of direct werkzaam in de financiële sector. Zijn oprechte interesse in de gebeurtenissen omtrent de beurscrash in 1929 heeft hem gemotiveerd om een financieel dagboek bij te houden. Het toeschouwers-perspectief (gecombineerd met de intelligentie van de schrijver) levert een zeer interessant en leerzaam dagboek op. Een aanrader voor eenieder wie geïnteresseerd is in deze tijdsperiode, zelf bezig is met beleggen of van plan is om te beginnen.
Wat een geweldig stuk gedocumenteerde geschiedenis. Dit dagboek is geschreven door Benjamin Roth en beslaat de tijdsperiode 1931 tot en met de aanval op Pearl Harbor in 1941. Het dagboek richt zich volledig op de financiële context in die tijd. Verwacht veel verhalen en analyses over de (aandelen)markt, werkloosheid, de impact hiervan en andere economische factoren.
Het leuke aan het dagboek is dat Benjamin Roth geen belegger was of direct werkzaam in de financiële sector. Zijn oprechte interesse in de gebeurtenissen omtrent de beurscrash in 1929 heeft hem gemotiveerd om een financieel dagboek bij te houden. Het toeschouwers-perspectief (gecombineerd met de intelligentie van de schrijver) levert een zeer interessant en leerzaam dagboek op. Een aanrader voor eenieder wie geïnteresseerd is in deze tijdsperiode, zelf bezig is met beleggen of van plan is om te beginnen.
August 17, 2023
Interesting from the standpoint that the book is culled from the journals and daily observations written by a man during the actual Great Depression. Interesting for his insight into the business activities and events that were shaping the depression, and the greater forces at work. While full of statistical data and similar facts, it doesn't really delve into the daily lives of others during the depression, and how folks survived it, or even the sort of household economies that his family adopted to "make do." I would have liked to have seen more of that worked into the author's editorials about the business climate and events and how they affected his clients, country and world at large. Still it is an important book from the standpoint that it is a detailed observation from someone who was actually there, alive, living and surviving what is arguably the most significant economic downturn the world has ever known.
February 23, 2024
4/5
***
“If it weren’t for the suffering that it has caused I would say that the depression has brought with it a good many worthwhile results. Among other things library circulation has trebled and people are once again turning to home pleasures etc. and to simple living”
***
A great personal record of such an unique period in economic history – The great depression of 1929-1939.
What I appreciate most about this book is that it shows clearly how uncertain and unpredictable the market is, that no matter how rational and wise you (think you) are, you always need to leave room for wrongness. That’s why in the long term, not losing your principal is the most important rule of investing.
Also a great reminder of how important asset allocation is, and why with any signal of a major recession one should increase the proportion of liquid capital (preferably government bond)
And finally, never, never use leverage in investing.
***
“If it weren’t for the suffering that it has caused I would say that the depression has brought with it a good many worthwhile results. Among other things library circulation has trebled and people are once again turning to home pleasures etc. and to simple living”
***
A great personal record of such an unique period in economic history – The great depression of 1929-1939.
What I appreciate most about this book is that it shows clearly how uncertain and unpredictable the market is, that no matter how rational and wise you (think you) are, you always need to leave room for wrongness. That’s why in the long term, not losing your principal is the most important rule of investing.
Also a great reminder of how important asset allocation is, and why with any signal of a major recession one should increase the proportion of liquid capital (preferably government bond)
And finally, never, never use leverage in investing.
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