(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.
You can find the transcript of this episode here. Transcripts of all episodes can be found here.
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.
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The Tim Ferriss Show is one of the most popular podcasts in the world with more than one billion downloads. It has been selected for "Best of Apple Podcasts" three times, it is often the #1 interview podcast across all of Apple Podcasts, and it's been ranked #1 out of 400,000+ podcasts on many occasions. To listen to any of the past episodes for free, check out this page.
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.)
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
http://uncoveringsuperman.quora.com/A-19-Year-old-boys-understanding-of-how-to-cultivate-a-Good-Life
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…
-Ali
Thanks, it’s a definitely must-read for me. I need to prepare to losing my millions when I will actually had them 😉
Cool
Tim, is there anyone in the Boston area you’d like to talk to or hear speak in a long-form interview?
Is anyone else receiving Tim’s emailed update more than once? I get the same email twice within 30 seconds which is a little annoying.
John, thanks for the heads up. Did you also subscribe via RSS on the blog at some point? Are the subject lines and “from” addresses the same?
Thanks for letting me know,
Tim
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?
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?
A physical copy of this book will be in the next Quarterly, along with a personal letter from the author 🙂
This is awesome! Though slightly ruins one of the surprises of the box. What is the theme of the box then? Maybe this is why the book is out of stock on the big book sites 🙂
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?
Thanks!
Hi Zwolski (sorry, not sure of first name!),
No current plans for non-Kindle ebook, as they’re 80%+ of the market and I’m trying to keep my accounting simple, but what ereader did you choose and why?
Cheers,
Tim
Hi Tim,
Thanks for the reply. I choose the Kobo reader because it has more an open platform and felt less bigbrother-ish.
I have found all the other books listed on the kobo store, but did not find this one. Here is an example of the other books.
http://store.kobobooks.com/en-US/ebook/the-art-of-learning
http://store.kobobooks.com/en-US/ebook/the-obstacle-is-the-way
http://store.kobobooks.com/en-US/ebook/daily-rituals
http://store.kobobooks.com/en-US/ebook/vagabonding
It would be nice to also have it in store, but not possible that fine. I would probably get the audio version.
Anyways, thanks.
Ziemek
Hi Ziemek,
Interesting. If those other books are up, then I would suspect this one should go up there, too. I’ll check in, but please also take a look in a few days yourself.
All the best,
Tim
Tim, I also have a Kobo. I, too would be thrilled if you made your material available on that platform. Amazon is evil and creepy and I refuse to give them my money. I’ve been buying paper copies of your books and recommendations. They’re too good to miss.
Try using Calibre Zwolski. It can often convert digital books to a device you are using.
Good point.
Kindle maybe main market but what do tims users use ?
Tim made an assumption as lacked a question in his market research checklist ?
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,
Tim
This is true.
I know a multi millionaire property speculator who keeps a low profile.
Scams are many, due diligence is important.
Very astute Tim……most of the successful hedge fund managers are surprisingly reclusive
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?
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!
Hi Nick,
I do not have an Amazon store created, but I do get credit if you purchase the Kindle version, as the print is already sold out on Amazon 🙂 More physical are on the way, if you’d prefer it, but Kindle is also available.
Best,
Tim
Ooooo kindle never sells out !
Be famous for a day ? No scaling issue ?
The tim ferris tv show ?
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.
*Adds to cart* Thanks for recommendation Tim!
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.
Thanks,
Jon
Hi Tim,
if you could organise a hard copy version of all the books you recommend that would be brilliant.
regards
Micheal
Hey Tim,
When will the show notes from the podcast be up? I want to look into some of the books you discussed.
+1 from me, looking forward to the show notes
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.
Interview george soros ?
Top person knows a secret ?
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.
I recently read this book as well. I found it quite impressive how mass-psychology can be explained that easy and how we even might explain our own behaviour.
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.
Great initiative the book club. Really enjoying it.
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.
Automated trading software does not get emotional.
my twitter is @jasonpalmer1971
am I worth following ?
Eagerly looking forward to reading the book!! Thanks Tim! your contributions are always helpful and wonderful!
What were the other two investment books the author recommended? Thanks for doing these podcasts Tim, I’m really enjoying them,
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.
Karl popper realised you can never predict the future but you can hedge.
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.
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]
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.
Hey Tim! I think you tweeted once about wanting the assassins creed movie to get here sooner. I’m a huge fan too, I saw some fan art of Michael Fassbender as an assassin on reddit so I said I’d share, hopefully ubisoft will get their act together with it soon. 🙂 http://brilcrist.deviantart.com/art/Fassbender-Assassin-concept-483191941
I am looking forward to listen to this book. Seems a great read !
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 🙂 )
Interview Suggestion:
BJ Fogg – http://www.bjfogg.com/
I’m particularly interested in his ideas for forming habits.
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.
thanks for the recomendation. It was a good read. I just finished reading it.
Great article Tim! I just listened to the podcast and picked up the audio book!
Tim – good to hear you sounding perkier. Thank you again for an addictively good interview, and the frequency of your podcasts now. Looking forward to another inbetweeninsode!
P.S. I’m on Josh Waitzkin’s book bought via your click-through, Ryan Holiday next. Did you really have a go at becoming an expert in gaelic hurling (from the picture!)?
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.
Ryan
My friend has a 1st from cambridge and manages a £200 million hedge fund.
He says the trick is to know what your doing.
Back people.
Smart people.
More Tim Tim Talk Talk
Thanks for the recommendation Tim! I’ll definitely look into it. I presume “the Tim Ferriss bookclub is your top 5 “must read” books right?
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!
Best!
Luciano
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?
I love this book club Tim! Keep it up! Just started “What I learned” Unreal! You know how to pick em. I will stay tuned for your next one.
Keep up the smart work!!
Jullian
Really enjoyed the podcast Tim! The book that Brendan mentioned called “The Crowd, Study of a popular mind” is up for free for kindle on Amazon:http://www.amazon.com/Crowd-study-popular-mind-ebook/dp/B004UJNFQI/ref=sr_1_1?ie=UTF8&qid=1411746775&sr=8-1&keywords=the+crowd+a+study+of+the+popular+mind
Just wanted to share for those that would like to check it out for free.
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.
Thanks Max. Did you happen to catch the other two books mentioned? One was The Money Game and the other was Once in ???????
Thanks.
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
Thanks for sharing this Tim. I really need these words of wisdom from your post to move for that so called Success that I’ve been dreaming. Thanks a lot!
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.
Nice read. If only one can learn so quickly
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
Thank you for bringing up this book. Personally, I think this could help anyone, regardless of the amount of money to which it refers.
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!
Did anyone catch the names of the books Moynihan mentioned at the end of the pocast. One was on the history of markets I believe but I couldn’t hear the name.
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.”
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.
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!
Thanks for this, i just shared it on my wall
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!)
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.
Thanks!
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?
The second book is called:
Once in Golconda: A True Drama of Wall Street 1920-1938 by John Brooks.
Thanks so much for the recommendations, Tim! You’re an animal. Kickin’ ass and takin’ names. 🙂
Tim, I’ve read most of your books in hard copy and even have them downloaded on my kindle, I’ve still yet to read your latest book though.
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 !
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.
Thank you for your great post. It’s really very informative and really helpful. Please Keep posting. Thanks again.