The Mind of Wall Street: A Legendary Financier on the Perils of Greed and the Mysteries of the Market

All we can ever do is look at the past to predict the future, but life is dynamic and constantly changing, so the assumptions governing predictions are bound to be wrong.

mistake in launching the Oppenheimer Fund was in not sufficiently appreciating how skepticism about the unfamiliar can obscure the merits of even the best ideas.

Although the Oppenheimer Fund was never number one in any given year, over its first ten years, it had the best performance record of any mutual fund in the country, according to The New York Times.

INVESTORS, we deceive ourselves a thousand different ways, both small and large. We attribute gains to acumen when they are the product of luck, and attribute losses to ill fortune when they are often the product of stupidity or inattention. We believe that the market remembers or cares about the price we paid for a stock, or that our stocks will g

both cases, psychology proved critical. Napoleon’s delusion was to believe in military strategy and underestimate the role of morale; his generals failed to appreciate that Russian citizens battling for their lives on their home soil had far greater incentive to fight than did a poilu from Paris yearning for the Champs Elysées. The LTCM strategists

But if entire nations can be seized by manias—recall Germany in the 1930s—why should we assume that people will always behave rationally when they invest their money?

Although Danny was clearly a master of the game, making money was not an end in itself for him. I think that is true of many successful people in finance. Apart from giving money away, they have passionate outside interests.

(It is interesting to note that any profitable market strategy, no matter how obviously it is driven by greed, always is deemed good for society by those who reap the profits.)

The mid-1970s were not a productive time for the markets, which stagnated between 1964 and 1982; the Dow closed at 874 in 1964 and at 875 in 1981, racking up a magnificent gain of one point in seventeen years. Anybody who began investing in the 1990s, and had the expectation that stocks regularly outperform all other investments, should spend a mom