What I Learned Losing a Million Dollars


6153243027_8a5ed7bc0b - poker(Photo: Ariel H.)

“One of the rare noncharlatanic books in finance.”
– Nassim Nicholas Taleb, author of The Black Swan and Antifragile

“There is more to be learned from Jim Paul’s true story of failure than from a stack of books promising to reveal the secret formula for success…this compact volume is filled with a wealth of trading wisdom and insights.”
– Jack Schwager, author of Hedge Fund Market Wizards

The newest book in The Tim Ferriss Book Club (all five books here) is a fast read entitled What I Learned Losing a Million Dollars. It packs a wallop.

This book came into my life through N.N. Taleb, who has made several fortunes by exploiting the hubris of Wall Street. Given how vociferously he attacks most books on investing, it caught my attention that he openly praises this little book.

My first dinner with Nassim was in September of 2008. It was memorable for many reasons. We were introduced by the incredible Seth Roberts (may he rest in peace), and we sat down just as Lehman Brothers was collapsing, which Taleb had — in simple terms — brilliantly shorted. We proceeded to drinking nearly all of the Prosecco in the restaurant, while talking about life, business, and investing. Lehman Brothers would end up the largest bankruptcy filing in US history, involving $600+ billion in assets…

The next day, I had a massive hangover and a hunger to study Nassim. Step one was simple: reading more of what he read.

I grabbed a copy of What I Learned Losing a Million Dollars, and I’ve since read it many, many times. For less than $20, this tool has helped me avoid multiple catastrophes, and I can directly credit its influence to roughly 1/2 of my net worth (!). The ROI has been incredible.

The book — winner of a 2014 Axiom Business Book award gold medal — begins with the unbroken string of successes that helped Jim Paul achieve a jet-setting lifestyle and land a key spot with the Chicago Mercantile Exchange. It then describes the circumstances leading up to 7-figure losses, and the essential lessons he learned from it. The theme that emerges: there are 1,000,000+ ways to make money in the markets (and many of the “experts” contradict one another), but all losses appear to stem from the same few causes.  So why not study these causes to help improve your odds of making and keeping money?

Even if you don’t view yourself as an “investor,” this book can help you make better decisions in life. Also, the stories, similar in flavor to Liar’s Poker, are hilarious and range from high-stakes baccarat to Arabian horse fiascos.  For entertainment value alone, this book is worth the time.

I hope you enjoy — and benefit from — the lessons and laughs as much as I have.

For those who enjoy both audio and Kindle, as I do, the above editions are synced with Whispersync. This means that if you get both the audio and Kindle, you can switch between the two. For instance, I like to read Kindle books on my iPhone on the subway, then pick up and listen to the audio while walking outside.

Would you be interested in interviewing the co-author, Brendan Moynihan? Brendan is a Managing Director at Marketfield Asset Management ($20 billion of assets under management) and the Senior Advisor to the Editor-in-Chief of Bloomberg News, among other things.

If you’re a journalist, blogger, podcaster, etc. interested in the book’s lessons, feel free to reach out to him at bmoynihan [at] bloomberg {dot} net.

I recently interviewed him myself for an hour about investing, how he met Jim Paul, and much more. Click below to listen to the conversation, or (if reading via email) you can click here to stream/download the MP3:

For those who want a short synopsis of the book, here you go:

Jim Paul’s meteoric rise took him from a small town in Northern Kentucky to governor of the Chicago Mercantile Exchange, yet he lost it all — his fortune, his reputation, and his job — in one fatal attack of excessive economic hubris. In this honest, frank analysis, Paul and Brendan Moynihan revisit the events that led to Paul’s disastrous decisions and examine the psychological factors behind bad financial practices in several economic sectors.

Paul and Moynihan’s cautionary tale includes strategies for avoiding loss tied to a simple framework for understanding, accepting, and dodging the dangers of investing, trading, and speculating.


Posted on: September 15, 2014.

The Tim Ferriss Show is generally the #1 business podcast on iTunes, and it was selected for iTunes' "Best of 2015." Each episode deconstructs world-class performers from eclectic areas (investing, sports, business, art, etc.) to extract the tactics, tools, and routines you can use. If you want to 10x your productivity, click here.

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Comment Rules: Remember what Fonzie was like? Cool. That’s how we’re gonna be — cool. Critical is fine, but if you’re rude, we’ll delete your stuff. Please do not put your URL in the comment text and please use your PERSONAL name or initials and not your business name, as the latter comes off like spam. Have fun and thanks for adding to the conversation! (Thanks to Brian Oberkirch for the inspiration)

90 comments on “What I Learned Losing a Million Dollars

  1. Fascinating conversation. Excited to read the book tomorrow. Tim, I wrote an essay merging together similar insights that you led me to and it would be an honor if you took a glance.

    Here’s a quote from the piece,
    “There are “truths” contained within the foundation of all such texts, and viewing one as “true” over another blinds you from seeing deeper connections and establishing harmony; harmony that is preached in all these doctrines, but one that is overlooked for overcompensated higher levels of abstraction. Do not allow arrogant pride to dissolve you of a foundation available by viewing the full spectrum of insights and reason found in each religious direction. Do not reject the notion of God, but do not accept God and the derivations which manifest in your thoughts and actions naively.

    Learn to accept paradox, remain in the tense middle, and take proper action with the full spectrum of human comprehension.”

    The full piece is HERE if you are curious:

    All the best, George Stoitzev


  2. Tim,

    Thanks for the audio version. I’ve never read a book on investing but I’d never read books on philosophy and travelling either, and I totally loved the previous books in the book club on the topics. You’re awesome…



      • I am having the same issue… one says via aweber.com (has better graphics within blog) and one says via google.com. Is there a difference, or should I just subscribe to the aweber.com one?


  3. YAY! I’m glad you finally added another book to the book club! I really enjoyed Vagabonding. Currently listening to The Object is the Way. Any chance a copy of the new book might be in our our next Quarterly delivery?


  4. Hi Tim,

    I recently decided to buy e-reader which is not a Kindle. Is this book exclusive to amazon, or will this ever be available on any other platforms such as Kobo or elsewhere?



  5. Hi tim, re your above comments “The theme that emerges: there are 1,000,000+ ways to make money in the markets (and many of the “experts” contradict one another), but all losses appear to stem from the same few causes. So why not study these causes to help improve your odds of making and keeping money?”

    I couldnt agree more on the contradicting “experts”. Just wondering based on your opinion or perhaps Nassim’s, do those gurus peddling trading courses out there are charlatans as well? Because if you have the golden goose that constantly dole out profitable trades for you, will any one be so generous to share their strategies?

    Curious to hear your thoughts.


    • Alas, I don’t have much expertise related to trading courses that others offer for sale. Therefore, I don’t have any strong opinions about them, but my gut instinct is that most will be big talkers who make their money from selling courses. That said, I could be wrong and have been before.

      Hope that helps,



      • Hi Tim, Love your 4HWW (am a huge fan of your witty remarks and experimentation lifestyle which is indeed rare for someone so young). Am considering my 3rd career switch to trading which I love, to the point of obsession…..Are the principles in 4HChef applicable to trading skills as well?


  6. Hi Tim,

    Do you have an Amazon store created so we may purchase the physical book and have you receive some benefit? Noticed only the audible site is being linked.

    Great work on the podcasts!


  7. Had Moynihan as a professor in my MBA program last spring. The guy is brilliant and he really understands global markets. Also check out Next Time Will Be Different.


  8. Hi Tim,

    The topic of transcripts has been brought up in the comments sections a few times recently, though I have not yet seen you address it (apologies if I missed it).

    – Are you for/against transcripts of your podcast?
    – If ‘for’, I’d be happy to transcribe for free assuming you’d host. I have no formal experience at this but I’m a good typist and it would be nice to give back.




  9. Tim,

    Thanks so much for pointing out the audio version of this! I’m an avid “audio” reader since I spend a lot of time in the car. I think over the past year I’ve read over 50+ books by just listening in the car!

    I’m sure it will be a great listen. It’s now next on my list.


  10. Tim,

    I would recommend the book – Thinking Fast And Slow by Daniel Kahneman. The discussion on mental biases and how they impact our judgement is much more robust in that book. It is not an investing book per se. But, the concepts apply very well to the world of investing.

    NNT likes Daniel Kahneman too. I remember seeing him do an interview together.


  11. TIM: Show notes for episode 29 of the Podcast, with Brendan M. Please!
    His audio is a bit vague. I couldn’t make out his book recommendations.

    Thanks. Another great episode. Now the real challenge is just to implement and practice these techniques until they become second nature.

    Liked by 1 person

  12. There are only two positions in the market, and it’s not the long and the short. It’s too little and too much. When the position is going your way, you don’t have enough on. When it’s going against ya, you’ve got to much on.


  13. I was interested in your comment on Tulip Mania, I though I heard you say there was a book called the Tulip Manual that seemed to be about profiting in the tulip business. I can’t find any reference to this though doing Google searches. Tim, any info would be appreciated.


  14. Thanks man. If Nassim Taleb recommends this as “non-charlatanic” then it’s definitely a must read!

    P.S.: Your podcast is amazing Tim. Please keep up the good work and keep it going. You are to me truly inspiring. This is a supporting message.


  15. Tim this is a question not quite related to the blog post, you seem to do a lot of reading. How do you handle all this reading and do you have any pointers I could use to increase my reading completion? I really enjoy to posts and the podcasts, very informative and helpful, please keep them coming.
    [Moderator: Email address removed]


  16. Great book and from what I could hear good content in the interview, but the recording of the conversation over what sounded like a speakerphone made me turn it off before I could finish it.


  17. Great podcast. Didn’t think you could top the Kevin Kelly interviews but this is just a great story too. Don’t stop!!! (ps: too hard to find your book club to buy stuff, site needs a redesign to make it easier imho. I bought daily rituals, I put it on in the car and then my 12 yo daughter got into it and asks for it now🙂 )


  18. I’m always looking for great investment strategies. Tim, I’ve been following your blog posts for the past fews years and you haven’t steered me wrong so far. Every single hunch I’ve had about investing in the markets would have turned out huge profits, had I invested. I have the means now to start following these hunches and I’m sure this strategy will help. Thanks for your wisdom.


  19. Hi Tim.

    Neat share here.

    As for the market, or playing it, one must be hungry to embrace risk.

    I did small time Forex and stick trading many moons ago. It was a rush, a thrill, but I did little analysis and study, and more of a gambler’s mentality.

    When I developed some discipline in all things trading I was out of the game and into being a blogger.

    So far, so good, as I’m Blogging from Paradise but I gotta say that I’ve used my risk tolerance acquired from my old skool trading days to stay poised during my early day ups and downs online.

    Thanks TF, you’re an inspiration dude!

    Tweeting soon.



  20. Great talk!
    Tim, could you please write down the name of the second book that Mr. Paul recommended. The one thta talks about market and economic cycles.
    Thank you in advance!



  21. I would love to have a transcript, it was difficult to understand. I am interested in how to use checklists.

    Anyone is producing a transcript or notes?


  22. That was quite insightful and complemented in an interesting way what I learn at Berkeley-Haas school of business. Keep the great interviews coming! You did an amazing job with Tracy, challenging her more than you usually do and really drilling into the details.


      • Yeah I would like to know this book too. “Once in… ???” It’s so annoying it’s not clear in the audio book and there are no show notes. I had the same issue figuring out a book from another of Tim’s podcasts


  23. I truly believe that indeed money isn’t everything. It is even the root of all evil. You can be famous, can buy everything, but once you didn’t know how to value your hard-earned money? You’ll be left nothing except for our family.


  24. Can someone help me with the identification of the 3 books mentioned by Brendan?
    1) The Money Game
    2) Once in ?????????
    3) The Crowd

    Thanks Tim


  25. Wow Tim, I am reeling. My world is ROCKED! I just devoured that book.
    I have always wanted to learn more about the markets, but have been intimidated — but now, I understand that is just comes down to contingency planning. I do that in other areas of my life!
    Thank you so much for bringing this book into my life! What a game changer!


  26. Tim, your comments endorsing the book are striking: “For less than $20, this tool has helped me avoid multiple catastrophes, and I can directly credit its influence to roughly 1/2 of my net worth.”

    I’m looking forward to the day when I can say something similar about “The Four Hour Work Week.”

    Liked by 1 person

  27. I remember Nassim Nicholas Taleb from school; we were both enrolled at the Lycée Franco-Libanais in Beirut. Even then he had a marked tendency to cogitate which set him apart.


  28. Great interview indeed!

    Made me look on this website for other interesting interviews.

    Anybody knows which was third book suggested by Brenden, besides “Crowd” and “Money Game”?

    If not, I guess perhaps we could also ask Brenden?

    Really interesting website, congrats!


  29. I just listened to this episode. Near the end, the guest mentions 3 books that were influential to them. The first was “The Money Game.” I could not understand what he said for the second one. Would anyone on here be able to help with figuring out what the 2nd book was? (Thank you!)


  30. Tim-

    What is the name of the second book Brendan recommended, about “the cycles of the market and economy”? I played the audio back a few times, and can’t seem to make it out.



  31. After hearing how great this book was I bought it, I read it and I loved it. If this is the best best book on investing, what would be a strong second? I’m not currently an investor, however I am planning on starting this year. Im accredited and want to focus on investments for tax deferment, ( for short term ) then the markets and perhaps angel investing eventually. Any great book recommendations for a new investor?


  32. Good night tim ! I met your BOOK THROUGH trbalho FOUR HOURS A WEEK Work . I wonder if this book What do you recommend HAS Translation: For a Portuguese ? thank you !


  33. I wish I had seen this before I gave all the money back. I noticed patterns in Black Jack and in slots that paid me over $150,000..I have about 45 1099’s from the casinos I visited in just the last 6 months. (January 2016-June) I gave all the money back trying to make even more.