Young Research & Publishing Inc.

Investment Research Since 1978

Disclosure

  • About Us
    • Contributors
    • Archives
    • Dick Young’s Safe America
    • The Final Richard C. Young’s Intelligence Report
    • You’ve Read The Last Issue of Intelligence Report, Now What?
    • Dick Young’s Research Key: Anecdotal Evidence Gathering
    • Crisis at Vanguard
  • Investment Analysis
    • Bonds
    • Currencies and Gold
    • Dividend Investing
    • ETFs & Funds
    • Investment Strategy
    • Retirement Investing
    • Stocks
    • The Efficient Frontier
  • Investment Counsel
  • Retirement Compounders®
  • Free Email Signup

The #1 Investment Book

April 22, 2010 By E.J. Smith

You may be surprised to hear that Moneyball by Michael Lewis is my #1 investment book, given that it’s about baseball, not Wall Street or the stock market.

Moneyball is a story about how one of the poorest teams in baseball, the Oakland A’s, and their GM, Billy Beane, built a roster chock full of talent and won 103 games. Beane did it by discovering hidden value through faith in his convictions and obscure stats, like a hitter’s pitches per plate appearance—helpful in tiring out a pitcher and getting on base. He drafted baseball players who were overlooked by other GMs blinded by their herd-like analysis.

You’ll learn from the book that as an investor, hard work and tireless research can help you discover value where others don’t see it. Plus, it’s a better read than your typical investment book.

Michael Lewis also wrote The Blind Side, now a motion picture, which is another story about value. Again, it has nothing to do with stocks or bonds. It’s about football and the rise in value of the second most important player on the field, the left tackle, who protects the highest-paid player, the quarterback, and his blind side. You’ll love the story about Michael Oher, who embodies what it takes to be a good left tackle.

The stories Michael Lewis tells through his books are the closest most readers will ever come to Wall Street, and thankfully so. In the cult classic Liar’s Poker, Lewis, fresh out of Princeton, is employed in the highly sought-after Solomon Brothers training program. When the mortgage-backed security bond is created, he’s there. Led by John Gutfreund, the bond traders rig the odds in their favor like a casino. At a moral crossroads, Lewis leaves the well-paying job and literally writes the book that defines an era of greed.

Ironically, his new book, The Big Short, comes full circle. It is about the demise of the subprime mortgage-backed security bond market Solomon helped to create years ago. The characters alone make it worth reading. What you’ll learn, in addition to the workings of synthetic collateralized debt obligations (CDOs) and credit default swaps (CDSs), is that the market implosion was simply a matter of time.

Of course, now Goldman Sachs is facing civil fraud allegations from the government. Three years too late, I might add.

As Lewis explains in his book, Goldman Sachs was a big player in the CDO market and was eventually a big loser, too, since CDOs lose when subprime mortgages default. According to Lewis, Goldman held $16 billion in CDOs when subprime loans began defaulting and eventually incurred billions in losses, some of which it reduced with shady maneuvering. Hedge fund king John Paulson, among others, profited with CDS positions, which, on the other side of the bet, benefit from a default.

To blame just Goldman Sachs and Wall Street would be wrong. Government led by Republicans and Democrats pushing home ownership for all, easy-money mortgage lenders selling no-documentation loans, and speculative unemployed borrowers all share responsibility for the mess. Unfortunately, risks to investors will remain if toothless reform—and it is toothless—still supports a safety net for Wall Street and business as usual for the bloated Fannie Mae and Freddie Mac.

Until we see real reform, you’ll be wise to follow the lessons learned in Michael Lewis’s books and focus on value.

Share this:

  • Email
  • Twitter
  • Facebook

You Might Also Like:

  • Your Retirement Life: Investment Planning in One Chart
  • Is This a Generational Opportunity in Foreign Stocks?
  • Your Retirement Life: Sweet Home Alabama
  • Author
  • Recent Posts
E.J. Smith
E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zildjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris.

Please get in touch with E.J. at ejsmith@youngresearch.com

Click here to sign up for my free monthly Survive & Thrive letter.
Latest posts by E.J. Smith (see all)
  • “I Need Preservation of Principal and Growth” - March 22, 2023
  • Are You Fairly Wealthy? I’m Listening - March 21, 2023
  • Your Survival Guy’s BEST Insider’s Guide to Key West - March 20, 2023

Search Young Research

Most Popular

  • Are You Fairly Wealthy? I’m Listening
  • “I Need Preservation of Principal and Growth”
  • Were Silicon Valley Bank's Motivations for Taking Losses Pure?
  • Your Survival Guy’s BEST Insider’s Guide to Key West
  • Vanguard Wellesley (VWINX) vs. Wellington (VWELX): Which Fund is Best?
  • The Power of a Compound Interest Table
  • Silicon Valley Bank: What Do Investors Expect?
  • What’s Going On with Banks and Are My Deposits Safe?
  • Treasury Studying How to Increase Deposit Insurance
  • Mortgage Market Not Expected to Settle Down Soon

Don’t Miss

Default Risk Among the Many Concerns with Annuities

Risk and Reward: An Efficient Frontier

How to be a Billionaire: Proven Strategies from the Titans of Wealth

Cryptocosm and Life After Google

Warning: Avoid Mutual Fund Year End Distributions

Is Gold a Good Long-term Investment?

How to Invest in Gold

Vanguard Wellington (VWELX): The Original Balanced Fund

What is the Best Gold ETF for Investing and Trading?

Procter & Gamble (PG) Stock: The Only True Dividend King

The Dividend King of the North

You’ll Love This if You’re Dreaming of an Active Retirement Life

The Importance of a Balanced Portfolio

Invest with Peace of Mind and Comfort

What Kind of Life Are You Investing For?

RSS The Latest at Richardcyoung.com

  • For the Health of the Planet
  • “I Need Preservation of Principal and Growth”
  • V4 Stands Against North African and Middle Eastern Invasion
  • America’s Colleges Have Become Progressive Liberal Rat Holes
  • Carlson: The Media Are Part of the Control Apparatus
  • Fauci’s COVID Lies Called Out to His Face in DC
  • Who’d be Nuts Enough to Have Put Money into SVB?
  • Are You Fairly Wealthy? I’m Listening
  • Get Well Soon Taki
  • A Cashless Society Is A Debacle for Americans

RSS The Latest at Yoursurvivalguy.com

  • “I Need Preservation of Principal and Growth”
  • DEMOCRATIC SENATOR: Biden’s ESG Veto “Absolutely Infuriating”
  • Are You Fairly Wealthy? I’m Listening
  • How Long Is Your Water Supply Chain?
  • Your Survival Guy’s BEST Insider’s Guide to Key West
  • Be Wary of Those Who Wrap Themselves in Capes
  • For Whom Is Your Portfolio Serving?
  • ESG: Are Markets Ready for “A Needed Dose of Reality?”
  • Was Silicon Valley Bank a Victim of ESG?
  • Are You Living Your Best Life?

About Us

  • About Young Research
  • Archives
  • Contributors

Our Partners

  • Richard C. Young & Co.
  • Richardcyoung.com

Copyright © 2023 | Terms & Conditions

loading Cancel
Post was not sent - check your email addresses!
Email check failed, please try again
Sorry, your blog cannot share posts by email.