Where are the customers' yachts?, or, A good hard look at Wall Street?(Schwed, Fred)

The book recommended by Warren Buffett in his book 'The Warren Buffett Bible' served as an opportunity for me to look back on my own investment methods, and I think I personally found the book of my life on investment methods.

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Although the book was published about 100 years ago, books and people from the past always give me a lot of inspiration and opportunities to think, and they seem to provide enlightenment and guidance on how to move forward.

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I feel good after reading a book that I am very satisfied with, and I would like to summarize three things I personally felt.

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1. Let’s go against human nature

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We want to buy stocks when the stock price is ‘rising’ and sell stocks when the stock price is ‘falling.’

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mobile e-book: 100 pages

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It is human nature to try to imitate the actions of others and agree with their opinions in order to become a stable member of society.

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For example, there is something called Asch's tuning experiment.

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As is commonly known, the content is simple.

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Among the five confederates and one experimenter, when five people claimed that the length of a line that was different from the reference line (a lie that did not actually match the length) was the same length, the experimenter who had to make the final response followed the opinions of all participants and said that it was not the same length. Even though you know it, you lie and say that it is the same length.

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The reason for conformity is, firstly, empirically, the majority was right, and secondly, to avoid being ostracized by the group.

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But that shouldn't be the case in investing.

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When you buy it like that, you get it at the highest price.

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Due to the mask crisis that occurred in Korea during the Corona period, the price of a single mask once exceeded 7,000 won.

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That's why you should buy stocks after thinking and analyzing them yourself, rather than following others.

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2. Let’s invest

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Speculation is an effort to make a lot of money with little money, and is an activity that has a high probability of failure.

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Investment is an effort to prevent large amounts of money from becoming small amounts of money, and is an action that has a high probability of success.

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mobile e-book: 291 pages

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I think this book provides the exact meaning of investment and speculation.

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If this is true, I also did speculation when I first started trading stocks.

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I hoped that I would have a lot of money right away and that it would bring me great joy.

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But when I actually started trading stocks, I didn't have those dreams and hopes.

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Looking at the sight of everyone speculating while dreaming of the same dream, there was no separate gambling table.

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I decided to change my mind and started reading.

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And after thinking about a stable investment method, I changed the meaning of stocks to retirement.

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After changing my mind to investing for my retirement rather than becoming rich tomorrow, I felt much more at ease.

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I no longer feel impatience, I do not make unreasonable investments, I am looking into the future, I have plans, and I am living each day with satisfaction.

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3. Have your own investment method

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When the stock market is booming and everyone is flocking to buy stocks, sell all your stocks (common stocks).

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So buy conservative bonds after making a profit.

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I can assure you that the stocks you sold will rise further.

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Never mind though.

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Wait for the stock market downturn that will come soon.

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When a recession (or panic) reaches the level of a national disaster, sell all your bonds (even at a slight loss) and buy back stocks.

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Obviously, the stock price will fall further even after you buy it.

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But again, don't worry about it and wait until the next boom comes.

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Repeat this process over and over again as long as you live.

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Then you will experience the joy of dying rich.

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mobile e-book: 302 pages

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This is the phrase that I consider most important in this book.

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The investment method I was thinking of was dividend stocks instead of conservative bonds in that sentence.

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When the stock market boom is at its peak, dividend stocks lose steam and their prices don't rise much, but they are still attractive.

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Conversely, when the stock market is not doing well, the price of dividend stocks rises, so people try to purchase common stocks.

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If I repeat this while I am alive, I think I too will be able to experience the joy of dying rich.

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Of course, this investment method must be right for you.

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I believe that you must think about yourself and find an investment method that suits you.

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◎Korean review

고객의 요트는 어디에 있는가(저자 : 프레드쉐드, 출판사 : 부크온)

 

 

Where Are the Customers' Yachts?

"Once I picked it up I did not put it down until I finished. . . . What Schwed has done is capture fully-in deceptively clean language-the lunacy at the heart of the investment business." -- From the Foreword by Michael Lewis, Bestselling author of Liar's Poker ". . . one of the funniest books ever written about Wall Street." -- Jane Bryant Quinn, The Washington Post "How great to have a reissue of a hilarious classic that proves the more things change the more they stay the same. Only the names have been changed to protect the innocent." -- Michael Bloomberg "It's amazing how well Schwed's book is holding up after fifty-five years. About the only thing that's changed on Wall Street is that computers have replaced pencils and graph paper. Otherwise, the basics are the same. The investor's need to believe somebody is matched by the financial advisor's need to make a nice living. If one of them has to be disappointed, it's bound to be the former." -- John Rothchild, Author, A Fool and His Money, Financial Columnist, Time magazine Humorous and entertaining, this book exposes the folly and hypocrisy of Wall Street. The title refers to a story about a visitor to New York who admired the yachts of the bankers and brokers. Naively, he asked where all the customers' yachts were? Of course, none of the customers could afford yachts, even though they dutifully followed the advice of their bankers and brokers. Full of wise contrarian advice and offering a true look at the world of investing, in which brokers get rich while their customers go broke, this book continues to open the eyes of investors to the reality of Wall Street.

저자

Schwed Fred/ Arno Peter (ILT)/ Zweig Jason (INT

출판

Wiley

출판일

2005.12.01