This book is a collection of 1-to-2 page anecdotes about investing from a successful stockbroker, John Spooner, who (from what I read) manages over $600 million at Smith Barney. The lessons in the book are essentially fictionalized case studies of investor behavior based on Spooner's relationships with his real clients. I picked up this book and flipped through it at a book store because it has one of the all-time best titles of any investing book. This is because one of the biggest problems that prospective traders and investors have is that they often aren't really serious about learning about markets or making money.
Within the book there were some pieces advice and observations that were really great:
I also disagreed with Spooner in many places. But this was expected given that Spooner is very opinionated. This is also natural whenever someone publishes a "break the rules" investing book. But this book is bothersome, with regard to both content and style, because its great advice is offset by some advice that is plainly irresponsible.
With regard to style, some of Spooner's stories are told with a very self-indulgent tone. For example, he talks about his meeting with someone he referred to as a "so-called financial advisor". I'm not sure why he felt the need to include the undeserving jab of "so-called". In a world full of financially illiterate people, financial advisors provide a legitimate service. This particular financial advisor recommended that Spooner sell some of his American Express stock so he would be more diversified. Spooner then recounts the diatribe that he shot back at this advisor about how the way to get wealthy is to take a bold stake in a company that you really believe in. If Spooner wanted to tell this story in order to teach the reader an investing lesson (such as the downside of over-diversification, or the importance of making independent decisions), then that's fine. But I don't think this was the case. I think his gratuitous re-telling of the whipping that he gave to the financial advisor served no purpose other than to boost his ego.
Another example of his condescending attitude is where he denigrates a day trader who had some brief success and went out and bought a BMW and a condo by the water. It's not a mistake Spooner choose a "poser" to pick on instead of a professional day-trader who treats his trading income as a legitimate income and not a winning lottery ticket. Not to mention, taking cheap shots at failed day traders from 1999 became a cliché a long time ago.
Some of Spooner's other self-indulgent stories have absolutely nothing to do with investing, like the stories that contain nothing more than name-dropping, such as the time where he acted rudely to Alan Greenspan when they were on the same flight together. Spooner clumsily attempts to tack on some wisdom at the end of these stories in order to justify telling them.
As far as the content of the book, here are some examples of his atrocious advice:
One of my biggest pet peeves is when someone claims that it is impossible to time the market, yet goes on to teach you how you can do it. Spooner does this very blatantly. On one page he says: "If you buy something on the bottom I say it's probably dumb-ass luck." It is idiotic to make a statement that gives the impression that market timing is so difficult, and then turn around and give a quick-and-dirty tutorial about how to successfully jump from fad to fad.
Spooner's book is the kind that teaches you how to break the rules of investing. The problem is that you need to know the rules before you can break them - and the kind of investors who this book is targeted to don't already know them. And that's the main problem with this book - that it is highly hypocritical. But it's hypocrisy almost borders on being malicious. He targets the book to amateurs who are prone to just "fool around", but then relays irresponsible stories to his highly-impressionistic readers. In one chapter, he tells the story about how he received bad service from CompUSA when he went there to buy a laptop, so he went home and shorted CompUSA stock and used the profits from the trade to pay for the laptop. This kind of story gives readers the impression that the market is like a carnival game where you just throw some money down and win a prize. He constantly tells investors to buy stocks with solid fundamentals, but then tells them to jump from fad-to-fad and buy internet stocks at any price.
There is no doubt Spooner has tons of stories that the investment world could learn from, but his hypocritical advice makes this book almost dangerous to read.