Lessons From America’s Greatest Investment Tragedy
By Morgan Housel at Motley Fool
Benjamin Roth wasn't a professional writer or investor. But he wrote one of the most instructive investment books ever published.
Roth, an Ohio lawyer, kept a diary during the Great Depression, writing several times per week from 1931 through the early 1940s. His son published it in 2010. The entries are rarely more than three sentences, but vividly describe life during America's worst economic tragedy. One entry from April 6, 1932 simply states, "Insanity and suicide among prominent business men is on the increase."
Roth was fascinated with the stock market, and how smart people could be destroyed by it. He repeats, over and over again, a simple investing lesson obvious to everyone who lived through the depression: the incredible value of having ample cash in the bank.
July, 1931: "Magazines and newspapers are full of articles telling people to buy stocks, real estate etc. at present bargain prices. They say that times are sure to get better and that many big fortunes have been built this way. The trouble is that nobody has any money."
