Product Description

"There is one thing that can be said about A Fool and His Money that cannot be said about any other volume of investment advice: You will never make a penny from the information in this book. No work on the subject of personal finance has even tried to make this claim before. That is because works on the subject of personal finance are all lying. John Rothchild is the only fully honest author in the genre."—from the Foreword by P. J. O'Rourke.

A veritable gold mine of comic insight into the predicament of an average investor's avid pursuit of wealth, A Fool and His Money is John Rothchild's critically acclaimed personal account of a year devoted to investing his money in the markets. The entire investment world—its characters, institutions, customs, and myths—passes under Rothchild's sharp and profoundly humorous scrutiny.

Acclaim for A Fool and His Money

"What makes this book so good is that Rothchild can explain things like naked puts . . . and leave the reader both edified and laughing. . . . Witty, fast-paced, and educational."—The Washington Post

"You'll relish John Rothchild's comic tale. . . . The book nears guaranteed delight."—Newsday

"A Fool and His Money may be the funniest book about investing ever written. It's a reader's capital gain."—New York Post

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Product Details

• Amazon Sales Rank: #97145 in Books
• Published on: 1998-03-30
• Released on: 1998-03-16
• Original language: English
• Number of items: 1
• Binding: Paperback
• 272 pages

From Publishers Weekly
"If you think it's right it's wrong, and vice versa," quips freelance writer Rothchild in this picaresque odyssey of his search for a surefire way to multiply money. With a $14,000 grubstake, he invested in stocks and made the rounds: visiting brokerage houses, interviewing financial advisers, studying market newsletters, appraising mutual funds, penetrating the floor of the New York Stock Exchange, the Federal Reserve purlieus and Chicago's commodity trading pits (where putting one's money is "like holding up bread for the seagulls"). His education complete, Rothchild found that most of his capital evaporated even before the October '87 Crash, which completed the job. The average investor, the author concludes in this rueful, ironic and doggedly humorous tale, is "a born loser." Nevertheless, readers will be vastly entertained while learning investment essentials and idiosyncrasies they never knew they ought to know about.
Copyright 1988 Reed Business Information, Inc.

From Library Journal
This book is an exemplar on how not to invest, but it is not helpful on how to invest intelligently. The author describes his unsuccessful journey investing in stocks, futures, etc.; his use of investment newsletters and attendance at seminars; and his investigation of investment markets. Other than painting a grim picture on how easy it was for him to lose money, the book has little substance. While well written and at times entertaining, it would have been much more valuable if the author had analyzed his judgments and errors and discussed investment alternatives. Instead, the book is darted with "tips" that are more humorous than useful. Arthur J. Lieb, Library of Congress
Copyright 1988 Reed Business Information, Inc.

From the Inside Flap
You set aside some money, quit your job, devote yourself entirely to studying the markets, and start to invest. Then, through hard work and your own magical intuition, you become so wealthy your major concern is finding a fashionable hobby to soak up your abundant leisure time. All in about a year. Now, thanks to this hugely entertaining and informative book, you can live out the fantasy without risking your money, your job—or your sanity. Since its acclaimed debut a decade ago, A Fool and His Money has become a treasured investment classic. It’s the comic, firsthand account of a first-time investor who sets out to make his wildest money dreams come true. In a surge of optimism and enterprise, financial writer John Rothchild drops everything to devote an entire year to learning how to invest a modest sum of money. Motivated by a sincere desire to get rich, he undertakes his mission by systematically studying as much as he can about the markets and how they really operate. He fearlessly asks the most basic questions, observes the professionals at work, studies the newsletters, makes investments, and reports back on everything—including his own highly personal and often hilarious reactions. With Rothchild as your guide through the marketplace, you will:

• Eavesdrop as his broker explains in fluent double-talk why he should buy a certain "hot stock"
• Share in his buyer’s remorse as Rothchild purchases an unknown technology company stock that puts him on an emotional roller coaster
• Be humbled as he enters the almighty Federal Reserve Bank and struggles to understand its omnipotent power over his personal finances
• Witness the excitement and confusion of the Commodities Exchange and find out what pork bellies really are
• Hear firsthand the enigmatic and undoubtedly wise words of various wizards of Wall Street
• Sympathize with Rothchild as he explains his transactions to his loved ones
• Blush as he shamelessly attempts to deceive them

In a gesture of pure magnanimity, Rothchild also includes the hard-won bits of wisdom he calls his "25 Useful Tips"—which include such sage advice as "Never buy anything from a broker at an airport"—and his handy "Fool’s Glossary," which clarifies many of the technical terms used in the book. Clever, funny, and informative, A Fool and His Money will reward investors at all levels of experience with a revelation on every page.

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Customer Reviews

Information Overload Is Costly!
Mr. Rothschild did something in this book that you should never do. He took a year off to learn how to invest, and looked into every financial category available. As a result, he was soon inundated with advice that he often followed. Usually, he didn't understand the risks of what he was doing, and he almost always ended up making costly and unnecessary mistakes. You will find this book a funny cautionary tale about the relevance of keeping it simple and focusing on what's important.

The book is filled with short bits of advice that give you a flavor for its content.

"Never buy the June call nor sell the October put simultaneously, unless you know what they are." This is a reference to a strategy for making money in very volatile stocks. The stock he used was not volatile enough, and he lost on the position.

"'Expert' advice does not agree." So who can you believe?

Mr. Rothchild's downfall was that he is an obviously intelligent, curious person who was too good at finding sources of information. Along the way, he met more different investment brokers, security analysts, professional portfolio managers, market makers, commodity traders, and options experts than you can shake a stick at. Although no one held his hand into a fire, he often tried out an idea that he heard about along the way. The salespeople were all trained to let the investor do whatever he wanted, so he was able to get himself into deep water in the process of trying these things. Someone should have pointed out that he could have learned the same lessons by simply taking a theoretical position on paper, and tracking the results.

One hilarious sequence has him changing hotels during a vacation to avoid the margin calls that came every few hours. He didn't want his wife to find out that he had raided the household funds to float the first margin call. He could not meet the second one.

All the time this is going on, he has been telling his wife and friends how well he is doing. That was technically true for awhile, but did not last long.

Soon, his losses are so large that he was embarrassed to let anyone know. "The larger the sum you've lost, the smaller the sums you'll worry about." So he became incredibly stingy in every other part of his life.

Meanwhile, his wife's account was doing very well with being handled by a stock broker that Mr. Rothchild decided not to use. This made him feel even worse.

Then, the crash in October 1987 happened, and his wife's money was slashed, too. It was a tough year for the Rothchild family, all the way around.

After reading this book, you'll be ready for John Bogle and his Common Sense about Mutual Funds. With this information, you can match the market inexpensively, spend little time on investing, and have limited risk of taking a large, permanent loss. Sleeping well is the best revenge.

After you read this book, consider your own psychology. How good are you at making rational decisions in an area where the value of what you buy can go up and down wildly? Are you likely to be attracted to the overly complicated parts of investing? Are you good at containing risk? Mr. Rothchild's intelligence and access did him more harm than good. How can you apply his experience profitably to your own situation?

Protect your capital against losses for the best results!

Can the Average Investor Still Make Money??
+++++

This easy-to-read book, by former editor, author, and writer, John Rothchild, is a unique and hilarious book that tells us of his adventure as an average investor in the stock market.

Rothchild's original plan for writing this book was as follows:

"In the late summer of 1985, during an extraordinary bull market [rising market], I decided to drop everything and devote an entire year to learning how to invest, especially in stocks. I resolved to begin at the beginning, finding out as much as I could about the business and how it really operates, meanwhile putting my own funds [of $16,500] into whatever would make the biggest profit. After achieving [this] winning strategy, increasing my net worth, and achieving financial independence [or security], I'd return to tell you how I did it."

Rothchild learned how to invest by doing things such as watching late night television programs "on how to get rich;" going to financial planning places with their money managers; reading newsletters, business publications, and historical financial books; talking to successful investors in order to perhaps learn some inside information; and going to stockbrokers for information on hot stocks, making fully-informed investment decisions, and avoiding irrational markets.

During his journey, Rothchild does a good job in explaining the mechanics of investing especially in the stock market and imparting the psychology behind investing. Even though the author does a good job in explaining terms, I feel knowing some basics on investing before reading this book, will help the potential reader appreciate the humor and practical advice of this book even more. (There are over twenty short useful tips in boldface type peppered throughout this book.)

Finally, the title of this book "A Fool and his Money" gives an indication of what happened to Rothchild's investment. As a consequence, at the very end of this book, Rothchild has a short glossary of major investment and stock market terms that he has defined as a result of his experience. He defines the terms found in this review as follows:

(1) Average Investor: born loser
(2) Bull Market: a time when your neighbor's stocks are going up
(3) Successful investor: liar
(4) Inside information: something you wish they'd tell you; what everybody else has heard
(5) Stockbroker: salesperson for stocks, mutual funds, etc.; a person who will never go broke
(6) Money manager: expert who manages your financial affairs; someone to whom you pay a large fee so you'll have less money to manage
(7) Hot stock: stock everybody is buying; what your brokerage firm calls any stock it wants to sell
(8) Irrational market: a market that isn't doing what you want it too; every market
(9) Fully-informed investment decision: wild guess
(10) Financial security: perpetual care enjoyed by insurance companies, brokers, money managers, and others in the financial security industry.

In conclusion, this is a practical and hilarious book that serves as a warning to the average investor!!

(originally published 1988; acknowledgements; 31 chapters; postscript; glossary; main narrative of 250 pages)

+++++

A reality check for the average investor
This book was first published in 1988, after the 1987 crash. The wisdom and essence of the book is still as valuable now in 2002. It is entertaining as well as educational. The author went out of his way to describe his experience or experiments in various areas of investing, giving knowledge and first hand information on how the investment world runs from different perspectives. The author took a year to study investing and invest with his real money, with the assignment of writing this book about it at the end. As a result, his investment decisions and variety and frequency of his investment may be atypical of an average investor. However, his description of the phychology of an average investor is quite accurate.