Capital Games
LEKACHMAN, ROBERT
Capital Games Supermoney By Adam Smith Random House. 301 pp. $7.95. Reviewed by Robert Lekachman By now, anyone at all interested knows that "Adam Smith" in real life is George J. W. Goodman, a...
...Reviewed by Robert Lekachman By now, anyone at all interested knows that "Adam Smith" in real life is George J. W. Goodman, a Harvard- and Oxford-trained economist, former editor of the Institutional Investor, man about Wall Street, sometime mystery novelist, contributor to New York magazine, and most to the point, an exceedingly gifted writer about money, a topic rivaled in popularity only by sex...
...And although Goodman is properly wary about converting possibly random events into theories of permanent shifts in national attitudes, he does suspect that something is happening out there in the heartland of America, far away from the canyons of lower Manhattan...
...For a glorious moment, all Wall Street operated on the premise that the way to select stocks, identify hot conglomerates and manage mutual funds was to hire A Kid...
...The Penn Central debacle, illuminatingly summarized by Goodman, is revealed to have stopped just short of setting off a chain reaction of new bankruptcies akin to the calamities of 1929...
...the board of directors was promptly clapped into the Basel clink by the outraged Swiss police...
...During those enchanted years, the stock exchange soared on wings of faith, trusting in, among other human fauna, anointed wizards like James Ling of LTV (since deposed), Harold Geneen of ITT (since somewhat disarrayed by sundry revelations of odd behavior), and Saul Steinberg of LEASCO (since sadly deflated...
...A collection of essays rather than a connected narrative...
...As part owner...
...The Swiss evidently find nothing humorous in sinister crimes like verdact der ungetreuen geschaftsfuh-rung (suspicion of untrue management) or urkundenfalschung (falsification of documents...
...His The Money Game memorably fixed in print the smell of the great bull market of the mid-1960s...
...Ohio, where a revolt of young and highly-paid assembly line workers set the pattern for similar blue-collar uprisings in Norwood and other installations taken over by the General Motors Assembly Division...
...Super money, focusing upon the mess caused by the collapse of the boom, is as elegantly written as its predecessor, but inevitably more somber in tone...
...Goodman of course took a financial bath...
...The hero of this approach, Benjamin Graham, is here represented by one of his acolytes...
...Good question...
...The Money Game particularly celebrated the young gunslingers, those children of the Harvard Business School who were as thoroughly clued into the mysteries of computers and stock market theory as they were ignorant of the events of the Great Crash and the lesser failures that preceded and followed it...
...As an astute investor and moralist on the theme of human greed, he knew enough to put the loot from his first best seller into something absolutely safe, unlike Four Seasons Nursing Homes (high 91, low zero), Parvin Dohrmann (142 and 14...
...What could possibly be more secure than investing in a Swiss bank...
...Yet the natives are restless and, says the author, not likely to be assuaged by the Nixon landslide...
...There is simply no substitute for reasonable expectations, personal inquiry, library research, and attention to both long-term appreciation and present security...
...The events of the 1969-70 Great Bear market brutally clarified the answer: Readily...
...Indeed, for a little while exceedingly imaginative accounting seemed actually to achieve this implausible result...
...Like its predecessor, Super money is a first-class performance...
...Supermoney has some prudent advice for innocent small investors, above all the news that the amateur has about the same hope of outsmarting the pros as the average chess patzer has of beating Bobby Fischer...
...If these traditionally conservative folk are skeptical of the work ethic, he asks, who, apart from the Nixon family, believes in it anymore...
...How, asked the avaricious, could one possibly lose by following A Kid into ecology, geriatrics, or leisure...
...The final portion of the volume, serious but unstuffy, probes the realities behind the alternation of bull and bear markets...
...back to Texas...
...Presumably it is not Charles Reich's greening of America, Theodore Roszak's triumph of the counter-culture, nor even Jean-Francois Revel's new American revolution...
...A personal irony decorates Goodman's chronicle of bad times downtown...
...or Leasco Data Processing (92 and 8...
...Warren Buffet, who operates out of Omaha, Nebraska, drinks only Coca-Cola, hates to travel, collects no inside information, purchases stocks in companies only when he understands what they are doing, and, quite unlike the whiz kids, has invariably increased the value of his fund's holdings even in the very worst of market years...
...One assumes that the cash brought in this time by a Goodman best seller will not end up in the pockets of ersatz Swiss bankers...
...In a wry chapter, Goodman provides a saga of megalomania, incompetence and plain, old-fashioned fraud the first in the bank's attempt to corner the world cocoa market, the second in the lax management of the bank's visionary promoter, and the third in the assorted frantic efforts to conceal disaster by altering or mislaying vital documents...
...Although even in his earlier volume Goodman made plain that on historical precedent the bubble was certain to burst, it had not yet done so in 1968 when The Money Game was published...
...Goodman tells of visiting Lordstown...
...Goodman, at once fascinated and repelled by the financial markets, in the end suggests that money is not everything, a radical sentiment in the Wall Street milieu...
...For reasons that in 1972 elude comprehension, professionals as well as amateurs convinced themselves that heroes like these, "synergistically" mixing nursing homes, distilleries, periodicals, and steel mills, somehow extracted huge profits from the resulting managerial stew...
...Brokerage firms are shown failing in droves...
...The hipshooters of yesteryear are now seen selling off their wine cellars, scrambling for $15,000 jobs and taking buses (imagine, buses...
Vol. 56 • January 1973 • No. 2
