The Money Game

Dr. Schelling’s phrasing has to be counted as unfortunate, and in no sense is the stock market a great gambling enterprise like a lottery. But it is an exercise in mass psychology, in trying to guess better than the crowd how the crowd will behave.

The learned psychiatrist had picked, out of all the thousands of stocks, the one that permitted him to lose every penny. The happy ending is that we may all learn something, because he is still writing his book. It will be out next year, and I can hardly wait, since he saved his insight for publication.

The irony is that this is a money game and money is the way we keep score. But the real object of the Game is not money, it is the playing of the Game itself. For the true players, you could take all the trophies away and substitute plastic beads or whale’s teeth; as long as there is a way to keep score, they will play.

It has taken me years to unlearn everything I was taught, and I probably haven’t succeeded yet. I cite this only because most of what has been written about the market tells you the way it ought to be, and the successful investors I know do not hold to the way it ought to be, they simply go with what is.

It may be that a hundred years from now, or even less, the money game played in the securities markets may be seen as a passing phase of capitalism. It may even be seen as Keynes saw it, as a game of musical chairs. Great rewards accrue to the successful, and even though, he said, there will be some without chairs when the music stops, all the play

A stock is for all practical purposes, a piece of paper that sits in a bank vault. Most likely you will never see it. It may or may not have an Intrinsic Value; what it is worth on any given day depends on the confluence of buyers and sellers that day. The most important thing to realize is simplistic: The stock doesn’t know you own it. All those m

the market has a way of inducing humility in even its most successful students. It is dangerous because to know what you’re doing, you do have to be able to step outside yourself and see yourself objectively, and this is very tough if you think of Comsat as your baby, or even think “That’s mine, and I bought it a lot lower.”

Only a longer time span reveals the truly Prudent Man, who knows that the first rule of making money is not to lose it.

“The market,” says Mister Johnson, “is like a beautiful woman—endlessly fascinating, endlessly complex, always changing, always mystifying. I have been absorbed and immersed since 1924 and I know this is no science. It is an art. Now we have computers and all sorts of statistics, but the market is still the same and understanding the market is stil