A Decade of Delusions: From Speculative Contagion to the Great Recession

Foreword

Frank Martin is one of the wise men of American finance. No, he doesn’t have the public profile of the late Benjamin Graham and Peter Bernstein, or Warren Buffett, Paul Volcker, and Henry Kaufman, but he stands firm and tall with them in the pantheon of my heroes and mentors. This book, A Decade of Delusions, will make it clear both why I admire Frank and why I commend his wisdom to you.

The first thing you should know is that Frank Martin is the founder (and remains the intellectual leader) of Martin Capital Management, an investment advisory firm established in 1987 and located in Elkhart, Indiana. Yes, he manages “other people’s money” (OPM). But what differentiates him from most other advisors (and nearly all advisors to mutual funds) is that he manages the wealth entrusted to his care by his clients under substantially the same investment principles and strategies as he manages his own wealth; he takes essentially the same risks with his clients’ money as with his own. Investing under the principle of “my own money” (MOM) makes him more than an advisor to his clients; it makes him their partner in every sense of the word.

Those of us who have been plying the investments trade over the past few decades have been eyewitnesses to one of the most remarkable eras in U.S. financial history. We’ve seen the bubble in the “New Economy” of 1996 to 2000; the (inevitable) stock market crash that followed; the ensuing (likely inevitable) recovery; the ultra-speculative financial ...