Sparks Commentary: A review of “Investment Philosophers and Financial Economists” (audiobook)

Sunday, February 27, 2022

A review of “Investment Philosophers and Financial Economists” (audiobook)

This audiobook was my introduction to “Secrets of the Great Investors,” an audio series about investment. This particular installment was called “Investment Philosophers and Financial Economists.” I found out that it was actually two presentations: one about “The Investment Philosophers,” and one about “The Financial Economists.” Both were more historical than I would have thought, which added to the appeal for someone like me.

The Investment Philosophers

The presentation about “The Investment Philosophers” focused on giving timeless financial advice, such as controlling expenses and avoiding debt. Among other things, they covered the Biblical parable of the talents (a classic financial story); with the injunction to return the Master's money with “usury.” They also talked about the financial wisdom of Benjamin Franklin, dispensed in his book “Poor Richard's Almanac.” (For example, “He who lives upon hope will die fasting” – a caution against unwarranted optimism in investment decisions.) It also covered more modern figures from the twentieth century, who updated the advice for modern times. All in all, I thought it was a good presentation; with advice that will always be true.

Benjamin Franklin

The Financial Economists

The other presentation was about “The Financial Economists,” and it covered territory that I was more familiar with. I took an entire class on this subject in college, which went by the name of “Money and Banking.” (Or in the more formal language of the class, “monetary and financial economics.”) Nonetheless, they covered some things that I did not know, like how well some famous economists did in investing their own private money. John Maynard Keynes, for example, was moderately successful as an investor. He had a talent for buying stocks at rock-bottom prices, but did not always know when to unload them. Friedrich von Hayek was a man who predicted the Crash of 1929, and the inevitable coming of the Great Depression. Although Hayek did not specify exactly when this would happen, his predictions proved truer than those of some other financial economists of that time – some of whom lost significant amounts of money when the market crashed. I actually preferred “The Investment Philosophers” to this presentation, but this was nonetheless a good discussion about the role of economists in financial markets.