• John Train
  • April 26, 2021
    Read, recorded or researched
17 short, chapter-long exposés of the best investors from the past century.

Common factors across managers

1. They often (but not always) came from poor backgrounds.

2. They all changed their approach during their careers. As the quote at the beginning of the book says, "Times change and we change in them."

3. No-one was immune from big mistakes.

4. They were almost all 'quirky', to be polite.

5. Investing was their life. They thought about businesses, investments, and markets all the time. To the detriment of their 'private life', I'm sure - it was noticeable how many had divorced at least once.

6. They had all created a dense network of connections around them. Sometimes it was brokers, sometimes business execs, sometimes newspapers, sometimes restaurant goers. Who they relied on for information changed, but the fact they sourced bits from a tributary of sources didn't.

7. They all made a lot of money in their own way. For example, some put a lot of emphasis on cash dividends, others couldn't care less. There's no right way to make money. You have to find your own, distinct path and be prepared to leave that trail when it gets popular or the environment changes.

Train's message to readers

In the final pages of the book, John Train lays out some personal thoughts about work and meaning in life, based on his research and knowledge of superstars investors.

Understand the process, the way you should understand medicine and government, but don't try too hard yourself. The people who suffer the worst losses are usually those who overreach. And it's not necessary: Steady, moderate gains will get you where you want to go.

Furthermore, trying to achieve great wealth - far more than you need - is in fact irrational. You have to give up too much getting there, and having done it, you're often worse off than before.

Our nature, says Shakespeare, is subdued to what it works in, like the dyer's hand, and in pursuing great wealth you become a money person. You see the world through dollar-sign binoculars.

The exaggeration of any principle becomes its undoing, as the excess of a stimulant becomes a poison, and changing greed from a sin into a commandment dissolves the soul of a family.

And great wealth spoils human contacts. Everybody wants something. Of the Rothschilds it was said that they had no friends, only clients. The hurly-burly of humanity, from which great wealth fences itself off - its joys and trials, the texture of everyday life - is what we're designed for.

Philanthropy, while meritorious, on a large scale becomes a political act: The tycoon who extracts a fortune from the public to build a museum in one place rather than another has not created new beauty, only imposed his priorities on society.

The rational and virtuous approach is to trust in a sufficiency of wealth as a by-product of a useful life. Happy are those who find fulfilment in their families, their work, and their civic duties, and hope for the best.