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What I Learned Losing a Million Dollars
A Book Review of the finance book by Jim Paul and Brendan Moynihan
I will start with the tweet version of this book: If you don’t have a plan before investing, you’re gambling.
What I Learned Losing a Million Dollars by Jim Paul and and Brendan Moynihan is about Paul’s experience loosing a million dollars while trading lumber. Most financial books focus on what it takes to make a million dollars, “We’ve all read them, but if the “how-to” books were that beneficial, we’d all be rich. (Preface, i)” Instead, Paul reframes the how-to question, he looks at how-to … not lose a million dollars.
The writing in the beginning of the book is meant to provide context for Paul’s ultimate downfall but it is painful to read; Paul is not likable and doesn’t try to convince the reader otherwise.
Paul always wanted to be rich; his desire for wealth, and to appear wealthy, influenced all decisions in his life. As a teenager he became a knowledgeable gambler because he found it was an easy way to make some money on the side. Paul does not value the status quo and believes rules are arbitrary. For example, instead of rushing his fraternity, he just told the frat that he was joining.
His childhood and his initial success in business after college, made Paul think he was better than everyone else; when actually, he was just luckier than everyone else. Paul’s background story is painfully generic, but what’s really shocking is the bad writing in the first half of the book. This is an example:
“They also all had Bass Weejuns. I didn’t even know what a Bass Weejun was—it’s a style of shoe. Everybody in Lexington wore Bass Weejuns. I had no money, no good clothes, and no Bass Weejuns. (pg 12)”
These are Bass Weejuns for context:
They’re nothing to call home about, in my opinion; unless you like screaming over loafers for some reason. Paul also has an obsession with the word “neat”, as in “cool”. It shows up 8 times in the first 10 pages in the book. It really stands out, along with the large quantity of 5-6 word sentences.
The book is written by both Jim Paul and Brendan Moynihan. It’s my opinion that Jim Paul wrote the first half of the book, as the style is very colloquial and it focuses on Paul’s early life. The second half of the book, when the authors actually give advice and discuss the financial market, is when Moynihan takes over. The tone of the book completely changes; the writing style becomes more precise and the sentences become twice as long. The entire book is written in the first person, which implies a singular voice, but second half has more grandiose statements, general claims, and the more instances of the pronoun “we”. This further emphasizes that the primary writer changes halfway through the book.
Most of the summaries of this book I see online, spend a lot of time discussing Paul’s story instead of the actual advice in the book. At the end of the day, most of the advice can be summarized very concisely and the first half of the book is completely irrelevant except that it provides a human element, which makes the advice seem more useful.
The main points of the book are:
If you don’t have a plan, you are gambling. You should know how much you are willing to lose and when and for how much you will sell for.
Almost all approaches to playing the market can work if you have a plan and stick to it.
Once you have invested money, taken a short, etc. you are now emotionally invested and are no longer a rational actor. All further decisions you make are biased.
If you’re intrigued by this summary, I would say give the book a read. It is only 171 pages! However, I won’t say that the book provides much more information than I summarized above. Even though this book claims it is different from other how-to finance books, it still lacks specificity or actual trade secrets. Details don’t sell books, witticisms and generalizations do — this “neat” book has both in abundance.
The Don’t Call Me Ishmael Official Book Rating, Sponsored by 500 Sperm Whales and Physeteridae (SW&P 500):
3.5/5 Whales. Enjoyable.