Jane Bryant Quinn, a highly regarded and nationally syndicated columnist, once called much of the output of Wall Street and the trade publications that cover financial markets “investment porn.” She summed it up this way: “Americans are indulging themselves in investment porn. Shameless stories about performance tickle our prurient financial interest.”
The roller-coaster swing of opinion that comes from Wall Street, the media and trade publications covering the industry reflects the attempt to do just that. Pornography is also exploitative; the investment community exploits the individual investor’s lack of knowledge. That’s why I find “investment porn” an accurate, as well as a descriptive, term for much of what passes as expert advice.
Getting Past the Porn
Fortunately, the financial media does have a few exceptions. One of them is Jason Zweig, who writes the Intelligent Investor column for The Wall Street Journal. He is also the author of “Your Money and Your Brain,” a book that I believe is required reading for all serious investors (and there should be no other kind) and “The Little Book of Safe Money.”
In fact, if Zweig has written it, I think it should be mandatory reading. So it should be no surprise he has produced another winner with “The Devil’s Financial Dictionary.”
I could not sum up the book any better than Nobel Prize-winner Robert Shiller, who said: “This is the most amusing presentation of the principles of finance that I have ever seen.”
Not only is the book wickedly humorous, irreverent and wise, it contains a wealth of knowledge regarding the historical derivation of many terms in common use today.
While narrowing down the list was a difficult task, I’ve selected a few of Zweig’s best gems for you:
Before closing, I’ll add one of my personal favorite definitions, provided by Woody Allen. “A stockbroker is someone who invests other people’s money until it is all gone.” Here’s another definition of a stockbroker; unfortunately, the author is anonymous: Someone whose objective it is to transfer assets from your account to their account.
And author William Bernstein added this insight: “The stockbroker services his clients in the same way that Bonnie and Clyde serviced banks.” Finally, my own contribution: If you begin your investment journey dealing with a stockbroker, there’s a good chance you’ll end it dealing with another kind of broker, the pawn kind.
Zweig’s new book is just a sheer delight—and it’s now in place right next to my thesaurus. And you can be certain I’ll be referring to it often.
This commentary originally appeared November 9 on ETF.com
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