The first of May is the fiftieth anniversary of the day I started in E. F. Hutton & Company’s stockbroker training program. Nineteen sixty-seven was also the penultimate year of the greatest stock market mania since the late 1920s. And I have little doubt that the second fact largely accounts for the first; that is, if they weren’t taking just about anybody in those wild days, they probably wouldn’t have taken me.
I couldn’t have known that at the time, of course, and the larger truth is that neither could anyone else, for such is the essential nature of stock market mania. To wit: you can’t have one until the last one isn’t even a memory for the vast preponderance of market participants. And you can’t have the blowoff top that seals the market’s doom for a decade and more until everyone is singing the same four-word death song: “It’s different this time.”
By far the most perceptive chronicle of the swinging Sixties mania and its terrible denouement was and remains the great John Brooks’ The Go-Go Years, first published in 1973. It will seem silly to readers discovering it for the first time – which all advisors should do with alacrity and great dispatch – that anyone could ever have believed in the core illusions of that mania. But that is itself a critical element of all financial mania: that the last one, if you are even aware of it, seems hopelessly quaint and even risible, even as you are being swept up in the next one.
There is always great humor in Brooks, and of course great writing – he is, to me, the best writer about finance who ever lived. But the great value of The Go-Go Years to today’s advisor – as we are warned on every side that the equity market is historically and even horrifically overvalued, and that we are in the last stages of a bubble – is to steep oneself in what a great culture-shaking mania actually looks and feels like. Because to get in touch with that kind of mass speculative psychosis is to understand just how very far we are from it today. (In point of fact, manias don’t and can’t end until everyone becomes convinced that valuation is irrelevant.)
In just that sense, The Go-Go Years is the centerpiece in the great trifecta of the literature of mania, the others being Maury Klein’s Rainbow’s End, about the 1920s, and John Cassidy’s Dot.Con, about the 1990s. Read them or weep.
© 2017 Nick Murray. All rights reserved. Reprinted by permission. New books, articles and research findings are reviewed monthly in the newsletter Nick Murray Interactive. Everything he’s learned in fifty years is contained in the new book Around the Year with Nick Murray.