The Indomitable Investor: Why a Few Succeed in the Stock Market When Everyone Else Fails

The Illusion of Regulation

The quiet action of Peterffy starkly contrasts with Washington’s histrionics. Congress’ post-crisis rule-making typically morphs into a form of propaganda. Society demands that someone pays a price after so many people lost so much money. The mob of public opinion, which was fixated on market riches, and shattered by the crisis, quickly congeals once more, and mobilizes, behind opportunistic politicians who lead the hunt to find someone to blame. Lehman Brothers’ Dick Fuld was a scapegoat, circa 2009, and so were sub-prime mortgages. Goldman Sachs with its perhaps too perfect sense of timing and market insight is another. Yet, Bernard Madoff, who existed and succeeded with the permission of other people, is not a scapegoat. He is simply a criminal, and a symbol of corrupt conditions, even though it was the greed of investors that allowed him to exist. The 1987 crash was blamed on portfolio insurance, a supposed curative that would keep stocks from declining. A few years before, Ivan Boesky and Michael Milken were arrested as part of an insider trading scandal. Milken invented high-yield junk bonds. Charles “Sunshine Charlie” Mitchell, former president of National City Bank, Citibank’s predecessor, had been prosecuted after the Great Crash of 1929.

The congressional hearings, and selection of scapegoats, are modern iterations of the ancient rite of casting evil from the village. In Sir James George Frazer’s book, The Golden Bough, a study of myth and superstition ...