Financial Winners in Bad Times
Hard times are loaded with opportunities for the Really Rich. That's when they find bargains in the stock market, good but cheap companies to buy, and talented people to hire at reasonable wages. It's also when competitors are pulling the bedclothes over their heads, so they don't even see you as you steal their market share.
It was in the depths of the Depression of the thirties that Joe Kennedy laid the foundations of the fortune that created a political dynasty and elected a president. He is a perfect example of how wealth can be created when the rest of the world is bemoaning hard times.
Joe Kennedy was a big-time stock-market speculator who had a big pile of paper profits in the margin-buying stock mania of the late 1920s. He had liquidated his stock holdings in 1928, lived at the estate he had bought with his profits, and was thinking of getting back into the market in 1929. One day he walked out of the New York Stock Exchange and stopped for a shoeshine, and the shoeshine boy started giving him stock tips and bragging about how much money he had made speculating on 10 percent margin. Joe paid the boy, went back into the exchange, and canceled his buy orders; if even the shoeshine boys had become expert stock pickers, the market had become irrational, and the top was near.
To understand how gutsy this was, you have to understand the times. We had just gone through The Roaring Twenties, and the Crash of 1929 and the Depression of ...