Where Are the Customers' Yachts?: or A Good Hard Look at Wall Street

A fun book that offers no solutions nor concrete advice, but does it's darndest to illustrate the problems on 1930's Wall Street, most of which are as poignant today as they were then. Schwed is consistently entertaining, self-deprecating and fair minded towards those oft villified wall street bankers and brokers. A key point Schwed makes that's worth remembering (especially these days) is that mistakes are made more often out of well-intentioned idiocy than crookery, but that each are equally damaging. While Schwed spends most of his time explaining and lamenting the situation instead of proferring answers, he manages to get away with it due to the humorous treatment he gives investing and finances in general.

This book is a humorous review of the Stock Market. It was written about 10 years after the 1929 stock market crash by an author who had been working on Wall Street at the time. His definitions of speculation (“an effort, probably unsuccessful, to turn a little money into a lot”) and investment (“an effort, which should it be successful, to prevent a lot of money from becoming a little”) seem to sum up his views on the function or futility of buying and selling stocks. Most of the book serves to convince the reader of the validity of his definition of speculation. He does not provide details for how to achieve the goal investing as he defines the term. However, his biography indicates that he continued to work in the financial show more industry even after his experience of 1929, so it appears that, at the least, he believed successful investing was feasible.
In spite being written more than 50 years ago, the book is probably still relevant. First, because his definition of “speculation” remains accurate in describing a lot of stock trading. And secondly, because the lack of a reliable approach to successful “investing” is still the case. And the book is both informative and witty. show less

It wasn't quite as provocative, insightful or hilarious as i had been hoping. But nevertheless it was interesting to see that things haven't really changed since the book was written in 1940. I particularly liked his comments on the value of short-selling in chapter V and his comments on regulatory reform in chapter IX. My most favourite quote is:
"Speculation is an effort, probably unsuccessful, to turn a little money into a lot. Investment is an effort, which should be successful, to prevent a lot of money becoming a little."

History of Financial Advice Collection. Fred Schwed’s Where Are the Customers' Yachts? is a text that, like Adam Smith’s The Money Game (1968) or Andy Borowitz’s The Trillionaire Next Door (2000), satirizes the genre of financial investment advice by operating from within its terms. Schwed’s work was published in 1940, and has been republished almost consistently since. Its satire is reserved for the “ultimate dream” that Wall Street investors find impossible to relinquish and that is at the very heart of the genre: “that there is a secret, meaningful and predictable, in the rise and fall of financial enterprises” and that a “‘close study’ of this and that will prove something; that it will tell the initiate when show more there will be a rally or give the speculator a better than even chance of making a killing, or guarantee for an estate a safe four percent for a few generations.” However, although the work satirizes the genre it also adheres to some of its most familiar conventions, explaining the difference between technical and fundamental analysis, defining the different types of investment vehicles and exploring the role of the broker. show less

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