Fred Schwed's "Where Are the Customers' Yachts?": Taking a Closer Look at Wall Street

Ron Leybovich: A good yarn of how the rich try to hide their money.

United States on Dec 10, 2023

Johnc: Although the book is about 55 years old, this updated version is a delight to read and the feel to the book is excellent. Publisher spared not a dime.

Canada on Sep 03, 2023

Rw Lawson: This book was first published in 1940 and the author had experienced Wall Street at its most extremes. He was a trader but lost a lot of his money in the crash of 1929. It’s a cynical look at the practices and people on Wall Street of which the author clearly had a fine understanding. One might conclude that the financial world has not changed much since.

It’s both witty and educational. As the introduction to the 2006 edition by Jason Sweig spells out: “The names and faces and machinery of Wall Street have changed completely from Schwed’s day, but the game remains the same. The Individual Investor is still situated at the very bottom of the food chain, a speck of plankton in a sea of predators”.

The title of the book refers to the apocryphal story of some out-of-town visitors to New York. On arriving at the Battery their guides indicated some handsome ships riding at anchor and said “Look those are the bankers’ and broker’s yachts”. “Where are the customer’s yachts?” asked the naïve visitor.

Here’s one educational paragraph from the book after he comments that “pitifully few financial experts have ever known for two years (much...

United Kingdom on Dec 22, 2021

Suzy: I loved the idea behind this book and the viewpoint the author had about the industry; very, very interesting. However, I found the author's tone and tangents to be a little challenging to really get into the book. I probably wouldn't recommend reading unless it is a subject of keen interest.

Australia on Jul 31, 2021

loop: Ich sah neulich eine Veranstaltung von Warren Buffett auf der er das Buch empfahl. Er gab diese Empfehlung, mehr oder weniger in einem Nebensatz, da er davon ausging, dass es ohnehin jeder bereits gelesen hätte / haben sollte.

Nach dem ich es gelesen habe, kann ich dem nur wenig hinzufügen: Sollte man gelesen haben, wenn man plant Kapital anzulegen.

Germany on Feb 21, 2019

rzv: Bello bello molto bello, mi ha fatto sbellicare dal ridere. E al tempo stesso è anche molto informativo, ho imparato parecchie cose.

Italy on Jun 09, 2016

Ricardo Mio: So, you want to make money on Wall Street? Good idea, only be wary of investment counselors, stock brokers, or anyone purporting to have all the answers, such as authors of books on investing. Fortunately for us, Fred Schwed is not among them. His is a cautionary tale. He's worked on the Street and knows of its many pitfalls. Yes, his book was originally published in 1955, but as Jason Zweig (Money Magazine) points out in the introduction to the 2006 edition, nothing has changed. "The names and faces and machinery of Wall Street have changed completely from Schwed's day," writes Zweig, "but the game remains the same."

The fact is, says Schwed, no one can predict the future with accuracy, but that is exactly what Wall Street analysts, investment counselors and ambitious stock brokers are claiming to do. It can't be done. The Wall Street game is nothing less than a crap shoot, with lots of losers and few winners, and the winners often end up losers. Who makes the big money on Wall Street? Investment bankers and brokers--from their exorbitant fees. They are the fat cats with the yachts parked out on Long Island, not the clients.

Schwed aims his harshest criticism at...

United States on Jan 28, 2015

John C: Here are the highlights that I found:

- The title of the book was more popular than the book itself because it was sold at a time when the market was down. This edition was left pretty much like the first edition because he wanted it to reflect what he was thinking at the time.
- The author, being a financial writer who treats his subject lightly, sold his stock too frequently. He would have been better off to keep his positions. (My research: this meant a 9.0% annual return from 1940 (1st edition) to 1955 (2nd edition).)
- Financial statistics can be deceiving because they can give a lopsided view. It is human vanity to think the market can be predicted in two+ years. Look at how many on Wall Street were fooled by the crash. Wall Streeters tend to be romantics and dreamers.
- Bankers do the opposite of what is needed - they lend money in prosperous times and retain money in bad times. The economy needs the opposite - curtail spending in good times and encourage it in bad times.
- Customers buy when stocks are high and sell then they are low. Chart reading doesn't work. (I think it does in identifying trends, but of course there is no guarantee the trend will...

United States on Jun 20, 2009

Individual Investor: This funny book is a mild rebuke of Wall Street operators and Wall Street customers alike. In fact, there are many more outright crooks on the street than Schwed lets on, specially if they perceive you as an easy mark, an orphan or a widow. I speak from experience having seen them churn an account to milk it of commissions.

I was delighted to discover how old some of the Wall Street sayings are. It seems that nothing really changes in the human condition. One passage I found very entertaining is about a large group of Wall Street operators competing in a coin tossing game. As soon as you lose a toss, you are out of the game meaning that with each toss half of the players are gone. If you start with 500,000 players, after 15 tosses you have about 16 people left in the game. According to Schwed, these lucky people will soon take on airs of expert coin tossers even if they are winning based on pure luck. What I found amusing was that the author of a recent investment best seller uses this exact scenario to "prove" that most people who make money investing are just lucky. I wonder if this unnamed author read Schwed.

I found one commentary rather unnerving. Schwed say...

United States on Sep 23, 2007