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53 of 58 people found the following review helpful:
5.0 out of 5 stars
Absolute Classic!, August 11, 2002
This review is from: Money Game (Paperback)
I studied finance in college and I think I could have just read this book instead of most of the finance classes I took. First of all, "The Money Game" starts out with the thesis that the stock market and all other equity markets are just a game. It is not long-term investing that wins in this game for most. This would be heresy for most finance professors and financial planners out there. One example from the book involves a family that passed IBM stock down from generation to generation, it was only sold to cover estate taxes. Many members in the family became very wealthy. However, they worked just hard as their cohorts with no money, and the buy and hold stretagy profited them almost nothing despite the fact that they were "wealthy." Another example is a man who died in the late 1800s with a portfolio worth over $1,000,000. By the time the inheretence was passed down, the portfolio was worth 0, as the companies had gone out of business. "The Money Game" gives a great explanation of crital issues such as technical analysis, fundamental analysis, mass psychology, mutual funds and their managers, "performance" vs. more conservative funds, accounting practices, random walk theory, "valuation" of equities, and most importantly the money game itself. Ever wonder how a company like Priceline.com could be worth more than the market capitalization of all the airline stocks put together? This book explains how something so out of whack can happen and gives many examples. In this game, money is how you keep score. When someone is making lots of money, they are winning the game. When they are loosing money, they are loosing the game. But the game is there to be played, win, lose, or draw. For the players, it's just too tempting to stay in, it is vital, it is life for many.
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39 of 43 people found the following review helpful:
5.0 out of 5 stars
Catch up on those 60s cocktail parties with fund managers..., February 1, 2002
This review is from: Money Game (Paperback)
This is a great book on many levels, for both investors and non-investors. The setting is Wall Street in the late 1960s. Alcohol flows freely, and smoking is not taboo (don't forget about sex, these were the "Go-Go Years"). It is an almost exclusively male, smaller, whiter, and more white-shoe environment (most women in the book are referred to as "pretty young things"). Nevertheless, don't let the differences fool you; there are many things to be learned in this tale told from the inside. New York has come into its own as a financial center in the 1960s, and the electricity in the air is communicated through the pages. London, which was more of a co-equal in the prior, twenties bull market, is now a shadow, with Wall Street houses decorating their dining rooms with (page 223) "...paneling [that has] been flown over from busted merchant banks in the City of London..." The foundations of the confident World Trade Center are being drawn up. Older Depression-era Wall Street hands are still dominant, but as the Vietnam War hovers in the background, cracks in the establishment are beginning to show as twenty and thirty something "gunslinger" investment managers show up on the scene. Almost every major investment paradox or problem we face today is foreshadowed in miniature in this book. As a work of literature, it combines an engaging text with profound underlying meaning. The chapter "What Do the Numbers Mean?" on aggressive accounting was eerily prescient. The constant presence of John Maynard Keynes and Sigmund Freud as background figures to the culture of the times left an odd taste in my mouth, but the author (George J.W. Goodman, writing under the pen name "Adam Smith") never missed a beat in deftly applying their insights to the world of finance. The book has a strong undercurrent of behavioral finance, but it's about much more than that. There's a lot of humor, but there is also tragedy, when he recounts the tale of burnt-out and broke ex-millionaire Harry (many names are changed in the book to protect anonymity): (p. 93) "Time is getting shorter," Harry said. "I'll be forty soon. You have to do what you're going to do. All professionals use leverage. You have to, or you end up just another face in the crowd, someone who worked on the Street thirty years and saw a lot of markets and retired with a hundred and twenty thousand dollars. That's no reason to be on the Street." (p. 96) "[Goodman comments on Harry's misfortune] We all know what a millionaire is, and when the adding machine says, "$1,000,000," there is a beaming figure facing it. But when the machine says 00.00 there should be no one at all because that identity has been extinguished, and the trouble is that sometimes when the adding-machine tape says 00.00 there is still a man there to read it." Read this book, whether you are an investor, English major or engineer. You'll get a lot out of it.
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21 of 24 people found the following review helpful:
5.0 out of 5 stars
A Classic, December 3, 2000
This review is from: Money Game (Paperback)
I've read hundreds of investing books; skimmed hundreds more; even written one myself. But dare it be said: This beautifully written work may well be the best book on the subject ever written. Not because it covers everything, or promises to make you rich. But because it offers timeless insights into how players, amateur and professional, really do play the game, and thereby gives you rich food for thought on how, or whether, you should play. Sure, you won't find anything on program trading, IRAs, 401k's, the great fund boom, or dot com stocks. However, that just goes to show that you needn't read today's papers to truly learn today's market. A bestseller in its day, there is still something for everyone here. Simply put, The Money Game is a classic, the first book on investing you should read.
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