How To Really Ruin Your Financial Life and Portfolio

Acknowledgments

The first person I knew who was interested in investing was my mother. She had little training in it, but read Barron’s, The Wall Street Journal, and Forbes voraciously. When she died, she left my sister and me a pretty darned good portfolio. She also left me with two fine admonitions: “Buy on the rumor and sell on the news,” and, “Bulls make money and bears make money, but hogs get slaughtered.” I am not quite sure what either of these means in practical terms to the long-term, index-oriented investor, but they must mean something because my mother did leave a good portfolio.

My father, a famous economist, was the least interested in money of any man I have ever met, yet he had some excellent wisdom about money. Almost all of it could have been summed up under the simple heading: “Be prudent.” I rarely have been since he died in 1999, to my great cost.

My sister, far and away the most prudent Stein now living, and her equally prudent husband, Melvin, have often advised prudence upon me and I thank her and him. My first genius investor mentor was my first agent in Hollywood, George Diskant. His predictions about the economy were not always borne out, but he told me about BRK and that was worth plenty.

Other great influences were my spectacularly good money and banking teacher at Columbia, C. Lowell Harriss, and my superb econ teachers at Yale, Henry Wallich and James Tobin, inventor of “the Fed model” and “Tobin’s Q” respectively, both designed to tell when the ...