What I Learned Losing a Million Dollars
Jim Paul and Brendan Moynihan. Foreword by Jack Schwager
Columbia Business School Publishing
Pub Date: April 2013
ISBN: 9780231164689
192 Pages
Format: Hardcover
List Price: $27.95£22.00
Add To Cart
Jim Paul and Brendan Moynihan. Foreword by Jack Schwager
Columbia Business School Publishing
- Main
- Reviews
- Contents
- Excerpt
- Links
- Awards
Jim Paul's meteoric rise took him from a small town in Northern Kentucky to governor of the Chicago Mercantile Exchange, yet he lost it all—his fortune, his reputation, and his job—in one fatal attack of excessive economic hubris. In this honest, frank analysis, Paul and Brendan Moynihan revisit the events that led to Paul's disastrous decision and examine the psychological factors behind bad financial practices in several economic sectors.
This book—winner of a 2014 Axiom Business Book award gold medal—begins with the unbroken string of successes that helped Paul achieve a jet-setting lifestyle and land a key spot with the Chicago Mercantile Exchange. It then describes the circ*mstances leading up to Paul's $1.6 million loss and the essential lessons he learned from it—primarily that, although there are as many ways to make money in the markets as there are people participating in them, all losses come from the same few sources.
Investors lose money in the markets either because of errors in their analysis or because of psychological barriers preventing the application of analysis. While all analytical methods have some validity and make allowances for instances in which they do not work, psychological factors can keep an investor in a losing position, causing him to abandon one method for another in order to rationalize the decisions already made. Paul and Moynihan's cautionary tale includes strategies for avoiding loss tied to a simple framework for understanding, accepting, and dodging the dangers of investing, trading, and speculating.
Worthwhile reading for those who don't believe in the holy grail in the markets; a must-read for those who do. Jack Schwager, author of Hedge Fund Market Wizards
A novel approach aimed at pushing you inside your head and outside the losing habits most folks adopt right after multiple successes. A must-have for traders blessed with a string of hot trades. Ken Fisher, Fisher Investments, FORBES
At Ned Davis Research, we like to say that we are in the business of making mistakes and that the only difference between winners and losers is that winners make small mistakes and losers, big mistakes. This book does an excellent job in explaining in simple English the potential psychological 'flaws' that cause investors to make big mistakes. Ned Davis, Ned Davis Research, Inc.
One of the rare noncharlatanic books in finance. Nassim Nicholas Taleb, from Antifragile: Things That Gain from Disorder
Plenty of books recount past successes or focus on how to make money in the market, but what about keeping the money you already have? This may seem like a high-class problem, but it is a very real challenge for investors with substantial capital. John Mihaljevic, Beyond Proxy
[An] enlightening read. Brenda Jubin, Investing.com
The book points out very early that many successful investors have opposing styles and theories on how to make money, and that they can not all be right at the same time. The most important point to take from the book is how to avoid losing money... Steve Osbiston, Financial Times Advisor
Foreword
Preface to the Columbia Edition
Preface
Part I. Reminiscences of a Trader
1. From Hunger
2. To the Real World
3. Wood That I Would Trade
4. Spectacular Speculator
5. The Quest
Part II. Lessons Learned
6. The Psychological Dynamics of Loss
7. The Psychological Fallacies of Risk
8. The Psychological Crowd
Part III. Tying It All Together
9. Rules
Conclusion
Postscript
Appendix
Notes
Bibliography
Read an excerpt from What I Learned Losing a Million Dollars (to view in full screen, click on icon in bottom right-hand corner)
Winner, 2014 Gold Medal Winner, Axiom Business Book Awards for Business Fable
About the Author
Jim Paul (1943–2001) was first vice president in charge of the Morgan Stanley Dean Witter & Co. International Energy Unit in New York City. During his twenty-five-year career in the futures industry, he was a retail broker, floor trader, and research director and served on the Chicago Mercantile Exchange Board of Governors and the Executive Committee.
Brendan Moynihan is a managing director at Marketfield Asset Management LLC, where his understanding of markets and the media helps shape their macro views and allocations. He is an adjunct professor of finance at Vanderbilt University's Owen Graduate School of Management. He is also the author of Financial Origami: How the Wall Street Model Broke. He lives in Barrington Hills, Illinois, with his wife and two sons.
Jack Schwager is the author of the best-selling Market Wizard series as well as the three-volume Schwager on Futures. His latest work, Market Sense and Nonsense, was published in November 2012. He is currently the portfolio manager for the ADMIS Diversified Strategies Fund. His experience includes twenty-two years as director of futures research for some of Wall Street's leading firms.
The book "What I Learned Losing a Million Dollars" by Jim Paul and Brendan Moynihan provides a gripping account of Jim Paul's rise from a small town in Northern Kentucky to becoming the governor of the Chicago Mercantile Exchange, followed by his catastrophic loss of fortune due to excessive economic hubris. As an expert in finance and investments, I have extensively studied various aspects of investment psychology, risk management, and market behavior.
Jim Paul's journey, chronicled in this book, delves into the psychological factors behind poor financial decisions in diverse economic sectors. It meticulously examines Paul's successes leading up to his substantial loss of $1.6 million and underscores crucial lessons. The central thesis revolves around the understanding that despite numerous ways to profit in the markets, losses typically stem from a few common sources: errors in analysis or psychological barriers hindering the application of sound analysis.
The book emphasizes that while different analytical methods hold validity, it's often psychological factors that impede investors, causing them to cling to losing positions or switch methodologies irrationally to justify prior decisions. Through Paul and Moynihan's cautionary tale, the book offers strategies to evade losses, employing a straightforward framework to comprehend, accept, and avoid the hazards associated with investing, trading, and speculating.
Several renowned figures in the financial world, such as Jack Schwager, Ken Fisher, Nassim Nicholas Taleb, and Ned Davis, have endorsed this book for its insightful exploration of the psychological facets influencing financial decisions and its practical guidance on avoiding substantial losses in investment markets.
The book is structured into three parts:
- Reminiscences of a Trader: Jim Paul's personal journey, from his humble beginnings to his rise in the trading world.
- Lessons Learned: Analyzing the psychological dynamics of loss, fallacies of risk, and the impact of the psychological crowd.
- Tying It All Together: Establishing rules and a conclusive framework to navigate the complexities of investing.
The work is highly acclaimed, winning the 2014 Gold Medal in the Axiom Business Book Awards for its unique narrative and valuable insights. Authored by Jim Paul, a former vice president at Morgan Stanley, and Brendan Moynihan, a managing director at Marketfield Asset Management, the book combines real-world experiences with comprehensive financial expertise.
By examining the complexities of financial markets through the lens of human psychology and decision-making, "What I Learned Losing a Million Dollars" provides indispensable lessons for investors, traders, and speculators alike, making it a valuable resource in the realm of investment and finance literature.
