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The Money Game
"This is a modern classic." —Paul A. Samuelson, First American Nobel Prize Winner in Economics
"The best book there is about the stock market and all that goes with it." — The New York Times Book Review
"Anyone whose orientation is toward where the action is, where the happenings happen, should buy a copy of The Money Game and read it with due diligence." — Book World
" 'Adam Smith' is a veteran observer and commentator on the events and people of Wall Street.... His thorough knowledge of financial affairs gives his observations a great degree of authenticity. But the joy of reading this book comes from his delightful sense of humor. He is a lively and ingeniously witty writer who never stoops to acerbity. None of the solemn, sacred cows of Wall Street escapes debunking." — Library Journal
"The best book there is about the stock market and all that goes with it." — The New York Times Book Review
"Anyone whose orientation is toward where the action is, where the happenings happen, should buy a copy of The Money Game and read it with due diligence." — Book World
" 'Adam Smith' is a veteran observer and commentator on the events and people of Wall Street.... His thorough knowledge of financial affairs gives his observations a great degree of authenticity. But the joy of reading this book comes from his delightful sense of humor. He is a lively and ingeniously witty writer who never stoops to acerbity. None of the solemn, sacred cows of Wall Street escapes debunking." — Library Journal
272 pages, Paperback
First published January 1, 1967
About the author
George Goodman
41 books24 followersGeorge Jerome Waldo Goodman (August 10, 1930 – January 3, 2014) was an American author and economics broadcast commentator, best known by his pseudonym Adam Smith (which was assigned by Clay Felker at New York magazine in order to keep his published articles about Wall Street anonymous). He also wrote fiction under the name "George Goodman".
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Displaying 1 - 30 of 77 reviews
February 15, 2019
The dust jacket proclaims a "modern classic." My proclamation is less grand. In 1968, this was a monumental book. It remained a #1 bestseller for over a year, and that was back when people were reading books. George Goodman pioneered a new way of writing about economics (and later won 5 Emmys for his radio broadcasts). In a cruel twist, many of the essays are so dated that only crusty historians will find this book worth reading in its entirety. The thesis--that high finance is dramaticized to the point that it's kind of silly--perhaps cements this book's reputation as a true classic. I'm refusing to pass such judgment, as it feels inappropriate to criticize a man who spent his entire life trying to break down the barriers between average people and the mysticism of markets.
June 28, 2020
Buffett recommended this book in his 1960s partnership letters. Not sure why. Sure, some common market wisdom here and there but lengthy stories to make simple points (if there were any at all) and ”hooks” were badly missing. Hasn’t aged very well, not a favourite.
July 20, 2008
Professional investing is intolerably boring and over exacting to anyone who lacks the gambling instinct, while anyone who has it must pay to this propensity the appropriate toll. (Lord Keynes)
The world is not the way they tell you it is.
Charts and measures describe an emotional state. A group of men is like a single woman.
The world is not the way they tell you it is.
Charts and measures describe an emotional state. A group of men is like a single woman.
May 16, 2017
One of the few books you'll ever need in life. Never get emotional over a worthless piece of paper with fancy symbols and numbers. Save, invest, keep playing the game. God bless you Mr. Goodman.
-bb
-bb
December 24, 2020
Contrary to other reviews, I think this book is still very relevant. The specifics are out of date. Most of the businesses referenced are not around anymore but those are not the interesting part. The interesting part is the psychology behind the players. The stockbrokers, the investors, the speculators. The book is more an analysis of the psychology of the people in these roles and what drives them. The main take away for me was that while most people thinking investing is about analytical, rational decision making, in reality, most investors do not act in rational ways and psychology explains a lot of it. Markets move in and out of cycles - hope, greed, fear - and depending on where you can see how people's psychology affects how they act. The actions of the investors from the 1960s that this book covers can still be seen up to today. Investing is a game of managing one's emotions and projecting how other people will act.
March 5, 2008
My favorite investment book. Not about who or what, but a book about why. Why do we play the game? It covers the Go-Go years of the 1960s, but the insight into human behavior, the humor, the weird behavior of doing the wrong thing even when you know better still apply. Investors can immediately see pieces of themselves and others in the very human profiles.
April 29, 2011
If you’ve ever watched an awards show, you’ll be familiar with a certain type of humor that only a few people can correctly pull off. Success in this arena is not based on anything related to talent – in fact, it’s usually anything but; rather, it comes from the host’s station as a celebrity. When Chris Rock or Steve Martin teases Justin Timberlake or Richard Gere, it is always from the teaser’s position within the celebrity system. The host, no matter how “controversial” her remarks, is never going to be out of bounds, because the very space in which these remarks are made is always in-bounds. The joke is only made because the butt is so famous – by making fun of someone, the joke is actually inflating his or her position: the system remains intact.
“The Money Game” works the same way, but within the logic of Wall Street. “Yes,” it says, “money is a game, played by the rich and for the rich, and that’s as it should be.” ‘Adam Smith,’ the pseudonymous author, does a likeable job of pointing out the silliness of certain financial types (the amateur investor, the idiot expert, etc.) and teasing the financial powers that be, but this is all coming from a man who makes his money on Wall Street, who is inherently of the system he’s commenting on. His newspaper column, on which the book was based, apparently made a grand stir among financiers when it was published in the 1960’s – but it only made that stir because the financiers read it, because it stayed inside their world.
‘Smith’s’ observations can be funny, and his curmudgeonliness is fun to read. And for a book written as long ago as this one was, it’s surprisingly relevant – aside from an amusingly archaic diatribe about computers, the same arguments then are the ones we’re having today.
Still – if you were to extend the logic of an awards show’s joke too far, take it to its limit, the ultimate question would raise its head: why on earth are we paying attention to this? The same holds true here: take the logic of ‘Smith’s’ thought too far, and you wonder why so much of human existence –people being able to eat, to house themselves, to buy necessities – relies on the results of a game. The book never challenges this – nor does it want to. But it’s hard not to do so while reading it.
“The Money Game” works the same way, but within the logic of Wall Street. “Yes,” it says, “money is a game, played by the rich and for the rich, and that’s as it should be.” ‘Adam Smith,’ the pseudonymous author, does a likeable job of pointing out the silliness of certain financial types (the amateur investor, the idiot expert, etc.) and teasing the financial powers that be, but this is all coming from a man who makes his money on Wall Street, who is inherently of the system he’s commenting on. His newspaper column, on which the book was based, apparently made a grand stir among financiers when it was published in the 1960’s – but it only made that stir because the financiers read it, because it stayed inside their world.
‘Smith’s’ observations can be funny, and his curmudgeonliness is fun to read. And for a book written as long ago as this one was, it’s surprisingly relevant – aside from an amusingly archaic diatribe about computers, the same arguments then are the ones we’re having today.
Still – if you were to extend the logic of an awards show’s joke too far, take it to its limit, the ultimate question would raise its head: why on earth are we paying attention to this? The same holds true here: take the logic of ‘Smith’s’ thought too far, and you wonder why so much of human existence –people being able to eat, to house themselves, to buy necessities – relies on the results of a game. The book never challenges this – nor does it want to. But it’s hard not to do so while reading it.
October 4, 2015
An enjoyable and refreshing read, especially for someone in the investment trade. Unlike the holier than thou value investing books, many of which I’ve had the pleasure of reading, this one does not claim that there is any meaning to the investment activity, other than acquisition of financial wealth, nor does it portray the “pursuit of alpha” as anything meaningful, an end in itself.
The author is rather personable and observant, yet another player on Wall Street, successful, but no one that will be remembered. He starts of rather light-heartedly, describing all the follies and personalities.
Towards the middle of the book, the author-narrator grows a bit more restless and perhaps a bit bored with the trade. Call it a midlife crisis, but instead of buying a motorcycle or a Porche, he makes an attempt to first seek a more lively thrill of trading cocoa futures and then tries to seek the truth, first through a conversation with a semi-mythological entity, called the Gnome of Zurich, and later through pursuit of redeeming the pure silver out of the national treasury of the United States of America, and then starts to muse only halfway lightheartedly about what is wealth all for and how base it all really is. Yet, I am sure, this musing does not prevent him from enjoying a fine dinner and a home in the Hamptons.
I did like the mysticism of the end of the book. If read like a novel, and not as a finance book, character development can be well traced here. First, entertainment of the game, trade. After he’s been at it for a while, he starts to muse on the subject of what money actually is, and what is it all for. A logical development for an observant man. None of the questions are resolved at the end, so you will not get much other than entertainment from the book, and perhaps some motivation to read about the Godfather of it all, Lord Keynes.
To the young bucks of the trade, it will be a sensible reminder that whatever we through to be new and fresh, has all been done many times before. Only technology and decorations change, and perhaps multiple more layers of complexity are layered one on top of another through invention of derivatives, but the emotions not at all changed. Also, make note: money in the 60s was a lot easier to make.
The author is rather personable and observant, yet another player on Wall Street, successful, but no one that will be remembered. He starts of rather light-heartedly, describing all the follies and personalities.
Towards the middle of the book, the author-narrator grows a bit more restless and perhaps a bit bored with the trade. Call it a midlife crisis, but instead of buying a motorcycle or a Porche, he makes an attempt to first seek a more lively thrill of trading cocoa futures and then tries to seek the truth, first through a conversation with a semi-mythological entity, called the Gnome of Zurich, and later through pursuit of redeeming the pure silver out of the national treasury of the United States of America, and then starts to muse only halfway lightheartedly about what is wealth all for and how base it all really is. Yet, I am sure, this musing does not prevent him from enjoying a fine dinner and a home in the Hamptons.
I did like the mysticism of the end of the book. If read like a novel, and not as a finance book, character development can be well traced here. First, entertainment of the game, trade. After he’s been at it for a while, he starts to muse on the subject of what money actually is, and what is it all for. A logical development for an observant man. None of the questions are resolved at the end, so you will not get much other than entertainment from the book, and perhaps some motivation to read about the Godfather of it all, Lord Keynes.
To the young bucks of the trade, it will be a sensible reminder that whatever we through to be new and fresh, has all been done many times before. Only technology and decorations change, and perhaps multiple more layers of complexity are layered one on top of another through invention of derivatives, but the emotions not at all changed. Also, make note: money in the 60s was a lot easier to make.
July 31, 2020
The book is 52 years old, so much of the details are outdated.the author is worried that at some point in the future, computers will be deciding which stocks to buy, and actually executing the trades. That ship is now long since sailed, but the trepidations the author had in 1968 has been shown to be more than valid.
However, some of the basic rules of stock market investing haven't changed since 1968. Indeed, they haven't changed since brokers met to buy and sell shares in stock holding companies under the Buttonwood tree in lower Manhattan near what would become Wall Street. That's what this book deals with in an informative and moderately humorous way.
However, some of the basic rules of stock market investing haven't changed since 1968. Indeed, they haven't changed since brokers met to buy and sell shares in stock holding companies under the Buttonwood tree in lower Manhattan near what would become Wall Street. That's what this book deals with in an informative and moderately humorous way.
February 1, 2020
“Stocks Don’t Know that you Own Them”
The Money Game is a satirical look at Wall Street. It brings to light in a humorous manner the psychological aspect of Wall Street.
I found a number of the narratives amusing. There is certainly truth in sarcasm particularly the need to separate your identity from money. If you look at the markets as a game, especially since these markets take on a mob mentality, then you are more likely to be able to remove yourself and very importantly your self worth from it.
I would recommend the book as a light read.
The Money Game is a satirical look at Wall Street. It brings to light in a humorous manner the psychological aspect of Wall Street.
I found a number of the narratives amusing. There is certainly truth in sarcasm particularly the need to separate your identity from money. If you look at the markets as a game, especially since these markets take on a mob mentality, then you are more likely to be able to remove yourself and very importantly your self worth from it.
I would recommend the book as a light read.
March 20, 2020
Before the One Up on Wall Street, there was The Money Game original Idea by Adam Smith.
May 3, 2021
Great book which is still relevant today regarding speculators and the psychology of mass.
May 19, 2021
This was apparently the handbook for white collar criminals and cheesy suburban guys who fancied themselves investment mavericks around 50 years ago. I have no idea if the advice was solid back then or not. Perhaps it helped a lot of people really leverage their pensions from Ford or GE, blah blah blah. My impression of this book in 2021 (ordered via Amazon Prime's lending library, because even I know not to spend money on books about money) is that it is a smarmy and overly precious handbook bogged down by hotshot anecdotes and references to historical figures of greater import than some asshole broker in the 1970s. Why on Earth is Amazon making this ashen turd available today, even if for free? Maybe it's too expensive to license any of the books by Warren Buffet. Anyway, here's all the practical money advice you will ever need: 1) Buy low and sell high 2) put 99.6 % of your income into a Roth IRA 3) Save even more money by eating canned tuna and Ramen noodles until you retire. Just kidding! Just don't flush your income down the toilet by leasing cars and you should be fine. Also, be born rich, and don't read personal finance books designed to establish the author as a guru, like this one.
May 6, 2016
Did not feel this was worth my time and did not live up to the hype. some chuckle moments and some good history lesson and general market advice, but I have heard it all said much better in other texts about investing and the market.
July 3, 2019
This is an interesting book about the different kinds of "players" that you can find in the markets.
PS: Adam Smith is a pseudonym.
PS: Adam Smith is a pseudonym.
November 7, 2019
This would have been a nice book to read in 1980s or 90s - not so relevant now.
April 3, 2024
Audio Review here
Raw Notes here
A Visual Look Below
Overview
What if I told you that the whole point of the stock market is not to make money? What if I told you that the stock market itself is just a Game, and the real object of this Game is not money; it’s the playing of the Game itself?
In The Money Game Adam Smith (also known as George J. W. Goodman) sets out to explain how the stock market is a Game to be played with objectives that oftentimes do not make sense. While money preoccupies so much of our consciousness, The Money Game is adamant that making money is not the real objective of playing the stock market Game. The sooner we realize that the stock market Game is an irrational one, the better we will play it.
Through a series of chapters asking questions and describing real events and real characters (real but masked), George J. W. Goodman sets out to explore the unexplored area of the markets … the emotional area. As he states very eloquently in Chapter 2, “There are fundamentals in the marketplace, but the unexplored area is the emotional area. All charts and breadth indicators and technical palaver are the statistician’s attempts to describe an emotional state.
In the end, the one requirement to win The Money Game is to remember the Irregular Rule: If you don’t know who you are, this is an expensive place to find out. Emotional maturity must be displayed over the long run if you are going to survive the game called the stock market.
Why I Like This Book
I consider myself a highly rational person that likes to analyze situations before, during, and after. In my younger years, I could have been accused of analysis paralysis but as I have aged, I have learned to take calculated risks without overthinking. Interestingly enough though, this overly analytical approach does not transfer over to the stock market for me. When it comes to investing in the stock market, I tend to prefer a passive investment approach. But like with most things in my life, there are no sacred cows, as I am always open to learning new approaches.
I think I first heard about The Money Game on the Animal Spirits Podcast, and was intrigued once I heard it described as “the best book there is about the stock market and all that goes with it.” To be completely honest, having finished this book I am kicking myself for not reading it sooner. It confirms a ton for me regarding what my internal philosophy of money. But more importantly, it confirms that I have ZERO BUSINESS actively trading stocks in the game called the stock market.
As the book alludes to, I am the small investor who is the loveable fool that can’t beat the market. And as the lovable fool, I bow down to all the smart professional money managers that “know what they are doing.” What I can hope to immolate with my passive investment approach is the Prudent Man who over the long time horizon proves that the first rule of making money is not to lose it!
You should pick this book up if you are interested in learning a bit more “behind the scenes” about what goes on on Wall Street. The market is a Game. Pick this book up to learn more about how to play that Game.
Final Thoughts
This book was published in the spring of 1968 but so much of what was written then is still so unbelievably relevant. Regardless of what we sometimes want to admit, it’s hard to fight the fact that 80% of the market is psychology. And because this is an utter fact, we have to admit to ourselves that the Game, called the stock market is a game we created that is irrational. The sooner we realize this fact the better off we will be.
Most of what has been written about the market tell you the way it ought to be rather than the way it is. The Money Game is George J. W. Goodman’s attempt at portraying the realities. Successful investors don’t hold to the way the stock market out to be. They simply go with what is.
This becomes especially important when you consider that for the investors who follow the market, the ones who call up all the time, ninety percent of them don’t care whether they make money or not. This hypothesis put forward by Mr. Goodman is counter to that of Adam Smith who posited that man was a rational man that always went in the direction of the maximization of profit or production.
As a rational thinker myself, I can’t help but believe that the Game of the stock market should match the principles of maximization of profit and production. I mean isn’t that the heart of capitalism? In the end, when you finish reading The Money Game you realize that it is ultimately a philosophical book about you and your relationship with money, anxiety, and identity.
When George J. W. Goodman puts forth his Irregular Rule , what he is ultimately asking you the reader is to know yourself before you show up to the Game. Know the type of investing strategy that works for you and your level of anxiety. Know your reasons, your whys, and your how’s. Because if you do not, you will be swept up one way or another by the Game.
My Summary Conclusions from Each Chapter
Part I. YOU: Identity, Anxiety, Money: Chapter 1-9
• Preface: The game we create with it is an irrational one, and we play it better when we realize that, even as we try to bring rationality to it.
• Chapter 1: The word game was deliberately chosen to describe the stock market and the sooner that all of us small investors understand that this is a game, the better off we may be.
• Chapter 2: Do not forget the Irregular Rule: If you don’t know who you are, this is an expensive place to find out!
• Chapter 3: It all comes back to the Irregular Rule that you must know yourself for the stock market is an expensive place to find that out. The requirement to win this game is emotional maturity.
• Chapter 4: Since 80% of the market is psychology or deeper still human emotionality, the market can really be seen as a crowd. Because of this tendency, there is no substitute for good information, good research, and good ideas.
• Chapter 5: On one hand you have Adam Smith the father of modern economics stating definitely that money is about the maximization of profit and in some sense the accumulation of wealth (i,e. The Wealth of Nations). On the other hand, you have Norman Brown who sees money as a noose around our necks that ultimately makes our human nature impoverished. You must decide for yourself!
• Chapter 6: There are countless reasons people get into the Game. Some people love to gamble and lose. Others just want to make money over the long term by owning stocks forever. Regardless of your reason, you need to know yourself and stick to your plans.
• Chapter 7: The only real protection against all the ups and downs of the market (the anxiety) is to have an identity so firm it is not influenced by all the brouhaha in the marketplace. And remember, the stock doesn’t know you own it!
• Chapter 8: So if we are talking about real big money, forget the stock market. Build a company and have the market capitalize on your earnings.
• Chapter 9: The “simple equation of wealth”: To get rich, you find a stock whose ______ has been compounding at a very fat _____ and then the stock zooms and there you are.
Part II. IT: Systems: Chapter 10-14
• Chapter 10: Charting assumes that what was true yesterday will also be true tomorrow. But you and I know that past patterns/performance are not predictive of future patterns/performance.
• Chapter 11: To quote Professor Fama, “the history of the series of stock price changes cannot be used to predict the future in any meaningful way. The future path of the price level of security is no more predictable than the path of a series of cumulated random numbers. If the random walk is indeed Truth, then all charts and most investment advice have the value of zero, and that is going to affect the rules of the Game.
• Chapter 12: The Game is such that computers take away any long-term advantages individuals find. Our only chance is to rely on luck (random walk thesis).
• Chapter 13: The numbers created by “independent auditors” should be looked at with a grain of salt given that the accountants are paid and hired by the companies themselves.
• Chapter 14: Someone has to be on the losing end of the transaction and that is usually the little investor.
Part III. THEY: The Pros: Chapter 15-18
• Chapter 15: Professional investors are “performance” managers who are focused on driving results in the short term. Very few “performance” managers think in the long term. It’s all about driving big capital gains!
• Chapter 16: Like everything in life, those that are really in the know!
• Chapter 17: The market does not follow logic, it follows some mysterious tide of mass psychology.
• Chapter 18: If you are in the right thing at the wrong time, you may be right but have a long wait; at least you are better off than coming late to the party.
Part IV. VISIONS OF THE APOCALYPSE: Can it All Come Tumbling Down? Chapter 19-20
• Chapter 19: Sooner or later you have to come to reality, and stop being a father to the world. Lead it, yes. Buy it. No.
• Chapter 20: Sure, it can all come tumbling down. All it takes is for belief to go away!
Part V. VISIONS OF THE MILLENNIUM: Do You Really Want to Be Rich? Chapter 21
• Chapter 21: You need to create your own money philosophy to answer the question do you really want to be rich?
Final Book Score
Easy to Read: (5/5) Excellent
Deep Content: (5/5) Excellent
Overall Rating: (5/5) Excellent
Connect with me:
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Book Notes
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Raw Notes here
A Visual Look Below
Overview
What if I told you that the whole point of the stock market is not to make money? What if I told you that the stock market itself is just a Game, and the real object of this Game is not money; it’s the playing of the Game itself?
In The Money Game Adam Smith (also known as George J. W. Goodman) sets out to explain how the stock market is a Game to be played with objectives that oftentimes do not make sense. While money preoccupies so much of our consciousness, The Money Game is adamant that making money is not the real objective of playing the stock market Game. The sooner we realize that the stock market Game is an irrational one, the better we will play it.
Through a series of chapters asking questions and describing real events and real characters (real but masked), George J. W. Goodman sets out to explore the unexplored area of the markets … the emotional area. As he states very eloquently in Chapter 2, “There are fundamentals in the marketplace, but the unexplored area is the emotional area. All charts and breadth indicators and technical palaver are the statistician’s attempts to describe an emotional state.
In the end, the one requirement to win The Money Game is to remember the Irregular Rule: If you don’t know who you are, this is an expensive place to find out. Emotional maturity must be displayed over the long run if you are going to survive the game called the stock market.
Why I Like This Book
I consider myself a highly rational person that likes to analyze situations before, during, and after. In my younger years, I could have been accused of analysis paralysis but as I have aged, I have learned to take calculated risks without overthinking. Interestingly enough though, this overly analytical approach does not transfer over to the stock market for me. When it comes to investing in the stock market, I tend to prefer a passive investment approach. But like with most things in my life, there are no sacred cows, as I am always open to learning new approaches.
I think I first heard about The Money Game on the Animal Spirits Podcast, and was intrigued once I heard it described as “the best book there is about the stock market and all that goes with it.” To be completely honest, having finished this book I am kicking myself for not reading it sooner. It confirms a ton for me regarding what my internal philosophy of money. But more importantly, it confirms that I have ZERO BUSINESS actively trading stocks in the game called the stock market.
As the book alludes to, I am the small investor who is the loveable fool that can’t beat the market. And as the lovable fool, I bow down to all the smart professional money managers that “know what they are doing.” What I can hope to immolate with my passive investment approach is the Prudent Man who over the long time horizon proves that the first rule of making money is not to lose it!
You should pick this book up if you are interested in learning a bit more “behind the scenes” about what goes on on Wall Street. The market is a Game. Pick this book up to learn more about how to play that Game.
Final Thoughts
This book was published in the spring of 1968 but so much of what was written then is still so unbelievably relevant. Regardless of what we sometimes want to admit, it’s hard to fight the fact that 80% of the market is psychology. And because this is an utter fact, we have to admit to ourselves that the Game, called the stock market is a game we created that is irrational. The sooner we realize this fact the better off we will be.
Most of what has been written about the market tell you the way it ought to be rather than the way it is. The Money Game is George J. W. Goodman’s attempt at portraying the realities. Successful investors don’t hold to the way the stock market out to be. They simply go with what is.
This becomes especially important when you consider that for the investors who follow the market, the ones who call up all the time, ninety percent of them don’t care whether they make money or not. This hypothesis put forward by Mr. Goodman is counter to that of Adam Smith who posited that man was a rational man that always went in the direction of the maximization of profit or production.
As a rational thinker myself, I can’t help but believe that the Game of the stock market should match the principles of maximization of profit and production. I mean isn’t that the heart of capitalism? In the end, when you finish reading The Money Game you realize that it is ultimately a philosophical book about you and your relationship with money, anxiety, and identity.
When George J. W. Goodman puts forth his Irregular Rule , what he is ultimately asking you the reader is to know yourself before you show up to the Game. Know the type of investing strategy that works for you and your level of anxiety. Know your reasons, your whys, and your how’s. Because if you do not, you will be swept up one way or another by the Game.
My Summary Conclusions from Each Chapter
Part I. YOU: Identity, Anxiety, Money: Chapter 1-9
• Preface: The game we create with it is an irrational one, and we play it better when we realize that, even as we try to bring rationality to it.
• Chapter 1: The word game was deliberately chosen to describe the stock market and the sooner that all of us small investors understand that this is a game, the better off we may be.
• Chapter 2: Do not forget the Irregular Rule: If you don’t know who you are, this is an expensive place to find out!
• Chapter 3: It all comes back to the Irregular Rule that you must know yourself for the stock market is an expensive place to find that out. The requirement to win this game is emotional maturity.
• Chapter 4: Since 80% of the market is psychology or deeper still human emotionality, the market can really be seen as a crowd. Because of this tendency, there is no substitute for good information, good research, and good ideas.
• Chapter 5: On one hand you have Adam Smith the father of modern economics stating definitely that money is about the maximization of profit and in some sense the accumulation of wealth (i,e. The Wealth of Nations). On the other hand, you have Norman Brown who sees money as a noose around our necks that ultimately makes our human nature impoverished. You must decide for yourself!
• Chapter 6: There are countless reasons people get into the Game. Some people love to gamble and lose. Others just want to make money over the long term by owning stocks forever. Regardless of your reason, you need to know yourself and stick to your plans.
• Chapter 7: The only real protection against all the ups and downs of the market (the anxiety) is to have an identity so firm it is not influenced by all the brouhaha in the marketplace. And remember, the stock doesn’t know you own it!
• Chapter 8: So if we are talking about real big money, forget the stock market. Build a company and have the market capitalize on your earnings.
• Chapter 9: The “simple equation of wealth”: To get rich, you find a stock whose ______ has been compounding at a very fat _____ and then the stock zooms and there you are.
Part II. IT: Systems: Chapter 10-14
• Chapter 10: Charting assumes that what was true yesterday will also be true tomorrow. But you and I know that past patterns/performance are not predictive of future patterns/performance.
• Chapter 11: To quote Professor Fama, “the history of the series of stock price changes cannot be used to predict the future in any meaningful way. The future path of the price level of security is no more predictable than the path of a series of cumulated random numbers. If the random walk is indeed Truth, then all charts and most investment advice have the value of zero, and that is going to affect the rules of the Game.
• Chapter 12: The Game is such that computers take away any long-term advantages individuals find. Our only chance is to rely on luck (random walk thesis).
• Chapter 13: The numbers created by “independent auditors” should be looked at with a grain of salt given that the accountants are paid and hired by the companies themselves.
• Chapter 14: Someone has to be on the losing end of the transaction and that is usually the little investor.
Part III. THEY: The Pros: Chapter 15-18
• Chapter 15: Professional investors are “performance” managers who are focused on driving results in the short term. Very few “performance” managers think in the long term. It’s all about driving big capital gains!
• Chapter 16: Like everything in life, those that are really in the know!
• Chapter 17: The market does not follow logic, it follows some mysterious tide of mass psychology.
• Chapter 18: If you are in the right thing at the wrong time, you may be right but have a long wait; at least you are better off than coming late to the party.
Part IV. VISIONS OF THE APOCALYPSE: Can it All Come Tumbling Down? Chapter 19-20
• Chapter 19: Sooner or later you have to come to reality, and stop being a father to the world. Lead it, yes. Buy it. No.
• Chapter 20: Sure, it can all come tumbling down. All it takes is for belief to go away!
Part V. VISIONS OF THE MILLENNIUM: Do You Really Want to Be Rich? Chapter 21
• Chapter 21: You need to create your own money philosophy to answer the question do you really want to be rich?
Final Book Score
Easy to Read: (5/5) Excellent
Deep Content: (5/5) Excellent
Overall Rating: (5/5) Excellent
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Book Notes
August 21, 2018
Long before the term behavioural finance there was someone writing about the significance of identity. Long before the witty Buffett-isms, someone wrote those same words as part of his Irregular Rules. And long before Michael Lewis carved out his own position as the Wall Street storyteller du jour, someone else did so with similar eloquent finesse. Today, nearly three months have passed since George J.W. Goodman died on January 3, 2014 - or, as the financial after world knew him by, Adam Smith. A name created for him by the publisher of New York Magazine so as to keep his weekly Wall Street columns anonymous.
Rarely have the need to quote from a book been greater, and a good way to start is with Paul Samuelson ́s front-cover phrase “a modern classic”, as it embraces the book beautifully. On one hand the book is eons ahead of its time, crafting the mindset-house that practitioners like Warren Buffett, Peter Lynch and the behavioural finance entourage would furnish. But on the other hand it has a clear scent of the past. Every book is in some way a reflection of its time. The principles and aura of Benjamin Graham’s Security Analysis (published 1936) would for example likely have been vastly different without the experiences of The Great Depression and so would The Money Game, first written in 1967. The ebullient 1960s are ever present in the book’s dense 250 pages.
Which brings us back to what The Money Game is about – image, reality, identity, anxiety and money in that order. “If you don’t know who you are, this is an expensive place to find out. That has to do with people who want to lose”. But do not be mistaken, despite the personal writing style (later described as that of “a witty urban dinner guest”) the book is full of substance, just very elegantly served. It is a clear heir to the Jesse Livermore crowd – people who view the markets as a top-down organism. But it has also proved to be a treasure trove for Grahamites in pointing out the opportunities that abound for people with a bottom-up mentality. Value and The Game must and will co-exist and jointly move about in a Yin-Yang relationship.
Re-reading the book cover, to cover the brilliance of the chapter What Are They In It For? strikes me again. “Ninety percent of the people in the market don ́t care about making money”. The term “people” might also have been exchanged from meaning individuals investing own money to civil servants within mutual fund houses. But the importance of being part of what’s going on, being there and knowing things, supersedes the making money part, at least correctly defined.
One is reminded of Lord John Maynard Keynes: “The Game of professional investing is intolerably boring and overexacting to anyone who is entirely exempt from the gambling instinct; whilst he who has it must pay to this propensity the appropriate toll”. The size of the appropriate toll via lower returns on high friction- cost trading and being sucked into what’s hot at the moment are at the same time detrimental to the overall return of the pool of savings, yet opportunity for the value investing community. But the irony is that money is the way we keep score in this game, but “for the true players you could take all the trophies away...as long as there is a way to keep score they will play”.
The simple brilliance of the author’s Irregular Rules (the name itself breathes genius) speaks for itself. But allowing myself to single one out, it has to be Rule#2: “The identity of the investor and that of the investing action must be separate”. As displayed by the different Rules, part of the quality of the book is the author’s impeccable ability to dance to the right as well as to the left; his bias is hard to detect, leaving the reader with the task of being subjective. On a closing note, being so ahead of its time, what did Adam Smith have to say about high frequency trading, topic of the day via his modern-day heir Michael Lewis? Worry not, he devoted an entire chapter to this: “-Irwin, tell the truth now, if all these computers go on the air, as you say, does individual investors stand any chance? -Well, there is always luck.”
Rarely have the need to quote from a book been greater, and a good way to start is with Paul Samuelson ́s front-cover phrase “a modern classic”, as it embraces the book beautifully. On one hand the book is eons ahead of its time, crafting the mindset-house that practitioners like Warren Buffett, Peter Lynch and the behavioural finance entourage would furnish. But on the other hand it has a clear scent of the past. Every book is in some way a reflection of its time. The principles and aura of Benjamin Graham’s Security Analysis (published 1936) would for example likely have been vastly different without the experiences of The Great Depression and so would The Money Game, first written in 1967. The ebullient 1960s are ever present in the book’s dense 250 pages.
Which brings us back to what The Money Game is about – image, reality, identity, anxiety and money in that order. “If you don’t know who you are, this is an expensive place to find out. That has to do with people who want to lose”. But do not be mistaken, despite the personal writing style (later described as that of “a witty urban dinner guest”) the book is full of substance, just very elegantly served. It is a clear heir to the Jesse Livermore crowd – people who view the markets as a top-down organism. But it has also proved to be a treasure trove for Grahamites in pointing out the opportunities that abound for people with a bottom-up mentality. Value and The Game must and will co-exist and jointly move about in a Yin-Yang relationship.
Re-reading the book cover, to cover the brilliance of the chapter What Are They In It For? strikes me again. “Ninety percent of the people in the market don ́t care about making money”. The term “people” might also have been exchanged from meaning individuals investing own money to civil servants within mutual fund houses. But the importance of being part of what’s going on, being there and knowing things, supersedes the making money part, at least correctly defined.
One is reminded of Lord John Maynard Keynes: “The Game of professional investing is intolerably boring and overexacting to anyone who is entirely exempt from the gambling instinct; whilst he who has it must pay to this propensity the appropriate toll”. The size of the appropriate toll via lower returns on high friction- cost trading and being sucked into what’s hot at the moment are at the same time detrimental to the overall return of the pool of savings, yet opportunity for the value investing community. But the irony is that money is the way we keep score in this game, but “for the true players you could take all the trophies away...as long as there is a way to keep score they will play”.
The simple brilliance of the author’s Irregular Rules (the name itself breathes genius) speaks for itself. But allowing myself to single one out, it has to be Rule#2: “The identity of the investor and that of the investing action must be separate”. As displayed by the different Rules, part of the quality of the book is the author’s impeccable ability to dance to the right as well as to the left; his bias is hard to detect, leaving the reader with the task of being subjective. On a closing note, being so ahead of its time, what did Adam Smith have to say about high frequency trading, topic of the day via his modern-day heir Michael Lewis? Worry not, he devoted an entire chapter to this: “-Irwin, tell the truth now, if all these computers go on the air, as you say, does individual investors stand any chance? -Well, there is always luck.”
June 26, 2023
I finished this. I think. But it ain’t easy to read. Written by George Goodman using as the pseudo name Adam Smith – the father of economic thought. I wish this had been written by Smith.
Last half of the book wanders across the investment landscape with varying types of investors are explored.
But, mostly the book hammers home the point that investing is more a random walk than a logical progression. The people making big money are starting companies that they take public, the next big chunk is made by the investment advisors, bankers, and brokers. Last on the list is us – the individual investor.
This book was written in the 1960s so brokers are mostly a dying breed but the overall concept hasn’t changed. By the time an individual investor knows of that hot tip it has been sold by those professionals and we’re left holding the proverbial bag.
I can’t really recommend this to anyone. While the concepts may still be valid the companies used as examples either don’t exist anymore or are irrelevant today. An updated version might be better. Emphasis on might!
Last half of the book wanders across the investment landscape with varying types of investors are explored.
But, mostly the book hammers home the point that investing is more a random walk than a logical progression. The people making big money are starting companies that they take public, the next big chunk is made by the investment advisors, bankers, and brokers. Last on the list is us – the individual investor.
This book was written in the 1960s so brokers are mostly a dying breed but the overall concept hasn’t changed. By the time an individual investor knows of that hot tip it has been sold by those professionals and we’re left holding the proverbial bag.
I can’t really recommend this to anyone. While the concepts may still be valid the companies used as examples either don’t exist anymore or are irrelevant today. An updated version might be better. Emphasis on might!
December 24, 2023
An entertaining look at investing
As a long time investor, old enough to remember the market, society and events taking place at the time this book was first written, I can relate to impact it was originally meant to have. It is witty and clever and skillfully keeps the reader engaged. The author's premise that participating in the investment world for the aficionado is a game, win or lose, rings true with my observations. (Note: I was introduced to the market at age 6 by my father who was a long time investor. I later became a registered investment professional for time.)
The mechanics of the market have changed due internet, direct access to trading and account management, crypto currencies, etc., but the types of investors, motives, personality traits and approaches to the market remain much the same as described herein. I thoroughly enjoyed this book and recommend it to those finding their way into the investment world or veterans of the game desiring a fresh perspective.
As a long time investor, old enough to remember the market, society and events taking place at the time this book was first written, I can relate to impact it was originally meant to have. It is witty and clever and skillfully keeps the reader engaged. The author's premise that participating in the investment world for the aficionado is a game, win or lose, rings true with my observations. (Note: I was introduced to the market at age 6 by my father who was a long time investor. I later became a registered investment professional for time.)
The mechanics of the market have changed due internet, direct access to trading and account management, crypto currencies, etc., but the types of investors, motives, personality traits and approaches to the market remain much the same as described herein. I thoroughly enjoyed this book and recommend it to those finding their way into the investment world or veterans of the game desiring a fresh perspective.
November 7, 2017
MARKETS ONLY WORK WHEN PEOPLE BELIEVE.
The first thing you have to know is yourself. A man who knows himself can step outside himself and watch his own reactions like an observer.
Identities are supposed to come from occupations. If the occupation is money-making then anxiety must always be present, because there is always a threat the money which represents the achievement can be taken away.
Sometimes markets go on growth binges, especially when bonds and the more traditional securities dont seem to offer intriguing alternatives.
The first thing you have to know is yourself. A man who knows himself can step outside himself and watch his own reactions like an observer.
Identities are supposed to come from occupations. If the occupation is money-making then anxiety must always be present, because there is always a threat the money which represents the achievement can be taken away.
Sometimes markets go on growth binges, especially when bonds and the more traditional securities dont seem to offer intriguing alternatives.
November 26, 2019
I don't know how much relevance this book has to "the Game", as it is today in the new millenia, but this is a great account of history anyway - you get a deepdive into economic situation of the 60 and early 70s in US.
"Adam Smith" as a keen participant in The Money Game, explains it, the highs and lows - all the action, the joy and horror. And he is hilarious while doing it. I read the "Cocoa" part in Tom Wolfe's book about "The New Journalism", and I laught just as hard this time. This style of writing is art!
"Adam Smith" as a keen participant in The Money Game, explains it, the highs and lows - all the action, the joy and horror. And he is hilarious while doing it. I read the "Cocoa" part in Tom Wolfe's book about "The New Journalism", and I laught just as hard this time. This style of writing is art!
July 18, 2020
If I would have to say just one word, it would be "CLASSIC". It was written long time ago and people might think markets have changed a lot. Yes markets do have chnaged a lot with different instruments etc, but the market participants and the psychology remains the same. This book is not just about markets but mostly about people and how they behave/react to money/markets. People need to play the mind game to win the money game.
October 23, 2020
I liked the first part (You) more than the 2nd and 3rd parts (It & They) and I found it also more interesting from a investing point of view,
The concepts are clear although the uotdated prose sometimes make it harder to understand fully what the underlying meaning is.
I would probably read the book again some time in the future to review the concepts, but I personally do not understand the hype.
Just my opinion.
The concepts are clear although the uotdated prose sometimes make it harder to understand fully what the underlying meaning is.
I would probably read the book again some time in the future to review the concepts, but I personally do not understand the hype.
Just my opinion.
February 1, 2018
Interesting Read
Writer has gone beyond the theoretical financial frameworks to explain how the financial markets work. He used psychological and social aspects to explain 'The Great Game' of financial markets and diverse motivations of the players involved. It is a light and good read for people interested in a different perspective on markets.
Writer has gone beyond the theoretical financial frameworks to explain how the financial markets work. He used psychological and social aspects to explain 'The Great Game' of financial markets and diverse motivations of the players involved. It is a light and good read for people interested in a different perspective on markets.
January 3, 2021
Just okay
The book sought mostly to dispel what the reader thought they knew about the market. Cannot say I learned anything new and exciting. The book is also old so some of the companies highlighted were unknown to me. I did go back and look up what happened to those companies, which was kind of fun...
The book sought mostly to dispel what the reader thought they knew about the market. Cannot say I learned anything new and exciting. The book is also old so some of the companies highlighted were unknown to me. I did go back and look up what happened to those companies, which was kind of fun...
October 31, 2017
Great book to start off with to understand the stock market. The setting of the book in 1960-1970 is interesting as context to how the market is now.
All the major views are included and explored: the fundamentalists, the chartists (technical analysis) and the random walkers.
All the major views are included and explored: the fundamentalists, the chartists (technical analysis) and the random walkers.
February 26, 2019
Its a classic read that reveals several events of the US Stock Market history and enables you to develop your own perspective on whether to play the 'Game' or not. The Humorous take of the author on several market concepts is what makes the book stand out.
May 8, 2019
Первая половина книги очень расплывчата и я даже было решил забросить книгу...так она была скучна и банальна. Во винду половине книге появились размышления и истории, позволившие задуматься о аспектах рынка.
December 22, 2019
This is truly a readable classic with surprising outcomes which are as applicable to us today as they were back in 1967-8. Hint: Think human nature (or what we might refer to today as behavioural finance). Excellent. Truly 5-star material!!
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