Some months ago in this space, I commented favorably if not downright lovingly about John Brooks’ Once in Golconda: A True Drama of Wall Street 1920-1938, which I devoured when it was first published in 1969, and which remains my sentimental favorite book about the stock market mania of the 1920s. (My intellectual favorite is Maury Klein’s Rainbow’s End, which I’ll have to get to in this series of essays one day soon.)
I received quite a number of emails in the days after writing about Golconda, commending to my attention Brooks’ second most widely-read book, The Go-Go Years, which is his take on the next great stock market mania, that of the 1960s. I’ve actually read it a couple of times, once when it first came out, and again at these suggestions. The second reading confirmed my initial impression: yes, Go-Go Years is an elegant and drily humorous survey of that era. But it was and remains totally overshadowed by that great, rollicking classic – far and away the funniest book ever written about Wall Street – The Money Game, by “Adam Smith,” which was the nom de plume of an astute and acerbic observer of the mania named George J. W. Goodman.
The 1960s, it must be remembered, saw the first great outbreak of that invariably fatal disease, performance mania, among hitherto staid institutional investors. The Ford Foundation, under one or the other of the Bundy brothers (those wonderful folks who brought you Vietnam), had recently decreed that institutions were doing their beneficiaries a near-criminal disservice by sticking to bonds, utilities and other fuddy-duddy investments. Trustees were adjured to get out there and capture “performance” in those roiling, boiling years – which, of course, turned out to be the great blowoff top of the post-World War II bull market, at a level – Dow 1,000 – which would not be permanently surmounted until 1982.
But no one knew that then, or perhaps it was just that no one cared. It was a kids’ market – and I myself was one of the kids, and got clients just on that fact. A kids’ market, of course, is one in which the only people still capable of functioning are those without even the slightest vestige of an adult memory (viz. dot.com in 1999). It was the age of the “synergy” of conglomerates – and your barber would tout you on his favorite. It was also the age when computer leasing stocks (glorified finance companies taking residual value risk on what would turn out to be the most sophisticated junk in history) sold for 70x earnings.
This is the world in which Jerry Goodman found himself, and about which he wrote as no one ever has before or since in the annals of the market. The Money Game became the greatest stock market best-seller of all time (up to that era), and had us all reading Gustave le Bon, and Extraordinary Popular Delusions and the Madness of Crowds, and even Alan Watts, in an attempt to discover the Zen of the market. I promise you: it isn’t just because I was formed in that market that I love this book so much. I love it because it’s such a dead-on take on the times…and a powerful reminder that, in the cycle of market psychology, nothing ever changes.
© 2015 Nick Murray. All rights reserved. Reprinted by permission. Reprinted by permission. Nick reviews current books, articles and research findings in the “Resources” feature of his monthly newsletter, Nick Murray Interactive. To download the most recent sample issue, visit www.nickmurray.com and click on “Newsletter.”