The Wall Street Waltz: 90 Visual Perspectives, Illustrated Lessons From Financial Cycles and Trends, Revised and Updated Edition

Chart 87

Don't Buy Nuttin' What Eats

Early one morning, my wife noticed a man poking a 20-foot-long stick up a tree on the edge of our forest. It turned out to be our neighbor trying to get his $1,000 cat down from an oak tree. He was late for a flight east, but he was worried about his wife's prize feline and wanted to know if I had any suggestions. Scratching the cobwebs from my brain, I murmured the only thing that came to mind, which was a flash from my father's long-deceased Uncle Arthur, an old time investment junky, who babbled, “Don't buy nuttin' what eats.”

Recently, for a hobby, I've raised some chicks and ducks. I like eating the fresh eggs and watching the ducks swim in our pond. It turns out the raccoons and coyotes like my fine feathered friends, too. Only two are left.

Some folks might get misled by this chart into believing that thoroughbred horses are good investments. According to the chart, yearling thoroughbreds increased in value from $7,676 to $30,000 in the decade ending 1980. I can see why. Ten-year-old yearlings are awfully rare critters. Of course, that's silly. But a horse's value does drop drastically with age, so these kinds of prices aren't really attainable over the long term. You certainly can't buy a horse the way Uncle Arthur owned stocks and real estate. When he died 15 years ago, he owned stocks he had bought in the 1930s. Then again, I guess a rare 40-year-old horse might be valuable as a curiosity.

Even worse, horses need care—rent, food, shoes, ...