“The economic system and the inventory market are two various things.”
–Milton Friedman (“Maxims of Wall Road,” p. 157)
After Milton Friedman gained the Nobel Prize in Economics in 1976, he immediately loved fame and fortune. He was continuously in demand and appeared on a number of well-liked TV exhibits, comparable to Phil Donahue.
He as soon as appeared on Dinah Shore’s speak present alongside journalist Shana Alexander and comic Phyllis Diller.
These had been the Jimmy Carter years, and Dinah Shore requested him how a mean investor might shield his cash in a time of rising inflation. Friedman’s recommendation was succinct: “Spend it.”
That TV look introduced him extra mail than he’d ever obtained.
The TV sequence “Free to Select” made Friedman an excellent greater hit in 1980. He instructed the producer, Bob Chitester, “Persons are calling me from all around the world asking me to speculate their cash.” The Friedmans needed to change their cellphone quantity and relist it beneath Rose’s maiden title.
I can see why Milton Friedman was uncomfortable. Being an professional on the economic system will not be the identical as being a monetary advisor. He earned a Ph.D. in economics, not finance — cousins within the tutorial realm, however distant cousins in actual life.
Telling traders to spend their financial savings was poor recommendation, even throughout instances of inflation. Friedman himself didn’t observe his personal counsel. He invested his Nobel Prize funds in actual property. He and his spouse purchased a phenomenal condominium overlooking San Francisco Bay. (See photograph)
Your editor assembly with Rose and Milton Friedman of their San Francisco condominium.
Through the inflationary seventies, there have been loads of non-traditional inflation hedges to put money into, comparable to gold and silver, artwork and collectibles and actual property.
Granted, the normal markets in shares and bonds did poorly throughout the Seventies, together with blue-chip Dow shares, the so-called Nifty Fifty, Treasury and authorities bonds and glued earnings. All failed traders throughout the Seventies.
However small-cap development shares did very effectively after the 1973-74 bear market. The Nasdaq rose 60% from 1974 to 1980.
Don’t get me flawed. I’m an enormous fan of Milton Friedman as an economist, and wrote a glowing chapter known as “Milton’s Paradise,” in my historical past of the good financial thinkers, “The Making of Fashionable Economics.” He endorsed my e book with this intelligent line: “All histories of economics are BS — earlier than Skousen. His e book is vigorous, correct, and a positive bestseller.” (To order, go to www.skousenbooks.com).
We had been good associates, and I used to be in all probability the final particular person to have lunch with Milton at his favourite Italian restaurant earlier than he died in late 2006.
However each man should know his limitations, and Friedman was not snug giving private funding recommendation.
Like Friedman, I’ve a Ph. D. in economics, however I specialise in making use of economics to the true world of excessive finance and basic funding recommendation. Wall Road investing and Foremost Road economics usually are not the identical.
Friedman’s Favourite Poem
Milton Friedman’s favourite poem was written 100 years in the past, in 1920, by Rudyard Kipling. It’s entitled, “Gods of the Copybook Headings.”
The poem refers back to the proverbs or maxims typically drawn from sermons, almanacs and scriptures extolling advantage and knowledge that had been printed on the prime of the pages of notebooks utilized by British college youngsters.
The scholars needed to copy the maxims repeatedly, by hand, down the web page. The train served as a type of ethical training and penmanship.
Kipling’s first stanza reads:
As I cross by means of my incarnations in all ages and race,
I make my correct prostrations to the Gods of the Market Place.
Peering by means of reverent fingers I watch them flourish and fall,
And the Gods of the Copybook Headings, I discover, outlast all of them.
Kipling (and Friedman) bemoaned the truth that we not educate aphorisms to college students or adults.
However Kipling and Friedman could be comfortable to know that the age-old knowledge and timeless truths of the “copybook headings” are alive and effectively on Wall Road.
Stockbrokers, cash managers and old-timers are well-known for quoting monetary adages, historical proverbs and immortal poems comparable to “Promote in Could and go away and don’t come again ’til Labor Day,” or “No one is extra bearish than a sold-out bull.”
Within the early Eighties, I began gathering these timeless sayings, and in 2011, I revealed the primary version in a good-looking quantity in darkish inexperienced leather-based and gold lettering with a ribbon.
“The Maxims of Wall Road” has change into a bestseller, having bought over 35,000 copies by means of seven editions.
Now the Tenth-anniversary version is scorching off the press, prepared for the vacations.
“Maxims” is the Closest Factor to Wall Road Scripture
The “Maxims” incorporates:
Over 800 adages by such notables as Warren Buffett (“The inventory market can go from inexperienced to crimson with out stopping at yellow”)… J. P. Morgan (“Troubled waters make for good fishing”)… Humphrey Neill (“The general public is true throughout the tendencies however flawed at each ends”)… Richard Russell (“In a bear market, the winner is he who loses the least”)… and Steve Forbes (“Everyone seems to be a disciplined, long-term investor… till the market goes down!”).
Outdated Timer’s tales just like the “buying and selling sardines”… the place are the client’s yachts?… the gold bugs… commodity merchants… The origin of “blue sky”…
Well-known strains from Baron Rothschild, Ben Franklin, John D. Rockefeller, Joe Kennedy, J. P. Morgan, Bernard Baruch, John Templeton, Jesse Livermore, John Maynard Keynes and Ben Graham…
All quotations are divided into classes, with sage recommendation on beating the market, diversification vs. focus, worth vs. development, bulls vs. bears… black swan occasions… day merchants… doomsayers and Cassandras… plungers and the peacocks… scorching ideas and insider data… dropping cash and missed alternatives… Wall Road vs. Foremost Road… chartists vs. fundamentalists… leverage and debt… privateness and authorities… taxes and tax havens… inspiring “Wealthy Man’s Pearls of Knowledge.”
Offering A Shortcut to Monetary Knowledge
The e book has been endorsed by Warren Buffett, Jack Bogle, Dennis Gartman, Barron’s and plenty of others.
Alex Inexperienced, chief funding strategist of the Oxford Membership, wrote the next final month:
“Wouldn’t it’s nice if somebody collected the wisest ideas of the world’s best traders, males like Jesse Livermore, Baron Rothschild, J.P. Morgan, Benjamin Graham, Warren Buffett, Peter Lynch John Templeton and others?
“As a matter of reality, somebody has, my good pal and colleague Dr. Mark Skousen. His e book ‘The Maxims of Wall Road’ is a crash course in tips on how to survive and revenue in at present’s risky markets.
“A university economics professor, founding father of FreedomFest and bestselling creator, Mark has spent greater than 4 a long time studying, writing, educating and lecturing about monetary markets. Alongside the best way, he has collected a treasure trove of proverbs, slogans, tales and juicy quotes.
“I discovered myself chuckling (and infrequently sighing) once I first learn this e book. And I nonetheless consult with it often. Over my 35-year profession, I realized a lot of this funding knowledge by trial and error. Happily, you don’t must. ‘The Maxims of Wall Road’ is a pithy and indispensable information.”
New Tenth-Anniversary Version Launched in Time for the Holidays
Final week my grandson, Luke, and I drove to Chicago to select up the brand new Tenth-anniversary version of “The Maxims of Wall Road,” scorching off the press. Then we drove to a suburb of Cleveland and delivered 175 copies to Carver Monetary Companies, whose president, Randy Carver, is an enormous fan. He’s a dealer with Raymond James. Randy plans to offer them to his purchasers as a vacation present.
Kelley Drumm, advertising director at Carver Monetary Companies, and I like the brand new 10th-anniversary version of “Maxims”
I can’t ship each copy in particular person, however I will probably be mailing out copies this week and subsequent, in time for Christmas and the vacations.
Actually, there’s nonetheless time to order your individual copies — for your self and your investor associates, neighbors, purchasers and favourite brokers. Order as many copies as you want to — I supply a particular low cost if you order multiple copy — half off!
The brand new version is particular — it’s 282 pages. I’ve added 200 quotes because the first version got here out in 2011.
Cheaper by the Dozen!
I’ve stored the identical low value. The brand new version retails for $24.95, however when you purchase from Skousen Books, the primary copy is simply $20, and all further copies are solely $10 every. For those who order a complete field of 32 copies, the value is just $300, lower than $10 every.
As Hetty Inexperienced, America’s first feminine millionaire, mentioned, “After I see one thing low cost, I purchase a number of it.”
To order, go to www.skousenbooks.com.
I quantity and autograph each copy and pay the postage if mailed in the US (delivery to Canada or different international locations requires further postage). When you’ve got any particular inscriptions, please electronic mail Ned at email@example.com.
We ship on daily basis. Order your autographed copy at present! Go to www.skousenbooks.com.
And let me know if you’d like a particular inscription as a present to others. I’ll be glad to oblige.
Right here’s to a really merry Christmas and a cheerful affluent New Yr.
Good investing, AEIOU
You Nailed it!
A Tribute to Walter Williams, My Type of Trainer
Walter Williams was my type of economist — witty, clever, a fantastic trainer and spot-on when it got here to most points. He by no means retired. Actually, he died of a coronary heart assault at age 84 proper after educating his class at George Mason College.
He was a professor at George Mason College for 40 years, and the creator of a dozen books, together with “The State Towards Blacks” (1982) and “South Africa’s Struggle Towards Capitalism” (1989), his case in opposition to apartheid.
His exceptional story is instructed in his autobiography, “Up from the Initiatives.” He grew up poor within the housing tasks of Philadelphia, fought racism when he joined the U.S. Military, was as soon as a one-time cab driver and finally earned a doctorate in economics from the College of California, Los Angeles.
Right here’s a brief tribute from Motive journal: https://www.youtube.com/watch?v=GwpNqQn8Lyo.
We tried to get Walter to talk at FreedomFest in Vegas, however after 9/11, he merely refused to fly anyplace. He mentioned getting patted down by the TSA reminded him an excessive amount of of the Jim Crow days when the police would pat down blacks.
We’re planning to dedicate a room in honor of Walter at subsequent 12 months’s FreedomFest.
Listed here are some nice quotes:
“Previous to capitalism, the best way folks amassed nice wealth was by looting, plundering and enslaving their fellow man. Capitalism made it doable to change into rich by serving your fellow man.”
Right here’s Williams’ roadmap out of poverty: “Full highschool; get a job, any type of a job; get married earlier than having youngsters; and be a law-abiding citizen. Amongst each black and white Individuals so described, the poverty charge is within the single digits.”
“The intact black household survived the evils of slavery, segregation, and Jim Crow legal guidelines, however it couldn’t survive the welfare state.”
My solely beef with Walter was his speak on faculty campuses, “I Love Greed,” the place he used the time period “greed,” as an alternative of “self-interest” to advertise free-market economics and commerce. That set again the liberty motion, which turned off younger folks particularly. Sorry, Walter, however greed will not be a advantage. Grasping capitalists benefit from folks in commerce, ensuing typically in a “win-lose” scenario. Grasping traders typically lose cash as a result of they get grasping on the prime of the market. Greed landed Bernie Madoff in jail.
Walter wanted to learn John Mackey’s e book “Aware Capitalism”!