Acknowledgments

The first person I knew who was interested in investing was my mother. She had little training in it, but read Barron’s, The Wall Street Journal, and Forbes voraciously. When she died, she left my sister and me a pretty darned good portfolio. She also left me with two fine admonitions: “Buy on the rumor and sell on the news,” and, “Bulls make money and bears make money, but hogs get slaughtered.” I am not quite sure what either of these mean in practical terms to the long-term, index-oriented investor, but they must mean something because my mother did leave a good portfolio.

My father, a famous economist, was the least interested in money of any man I have ever met, yet he had some excellent wisdom about money. Almost all of it could have been summed up under the simple heading: “Be prudent.” I rarely have been since he died in 1999, to my great cost.

My sister, far and away the most prudent Stein now living, and her equally prudent husband, Melvin, have often advised prudence upon me and I thank her and him. My first genius investor mentor was my first agent in Hollywood, George Diskant. His predictions about the economy were not always borne out, but he told me about BRK and that was worth plenty.

Other great influences were my spectacularly good money and banking teacher at Columbia, C. Lowell Harriss, and my superb econ teachers at Yale, Henry Wallich and James Tobin, inventor of “the Fed model” and “Tobin’s Q”, both designed to tell when the stock market is overvalued and when it is undervalued. Neither seems to have had much predictive value in recent years, but they are certainly correct in general direction.

It has been my great pleasure in the last 25 years to have had a great broker at Merrill Lynch in Kevin Hanley, and more lately in his brilliant colleague, Jerry Au. I have also been privileged to get a general introduction to the erudition of John Bogle. I keep a lot of my stash at Fidelity. I have also made the acquaintance of Ned Johnson and his lovely daughter, Abigail. The Johnsons and their company have done me much good. The Johnsons and John Bogle truly are the small investor’s best friends.

For about the last 10 years, I have been a pal and frequent dinner and speaking companion of Ray Lucia, a stunningly well-informed and articulate investment advisor (now retired). I have learned a huge amount from Ray and his brother Joe, whom I consider my own brothers.

If there is anyone smarter in speculation that Jim Rogers, and quicker to see what’s happening, I don’t know who that would be (unless it’s Warren Buffett.) I was on a show with him on Fox for many years and always learned from him and still do. The whole gang on that show, especially host Neil Cavuto, always challenge and impress me.

By an extraordinary twist of fate, I have become pals in the last several years with Warren E. Buffett, surely the greatest genius in investing and in life generally. He is light years ahead of where I will ever be, but he has inspired me and years of reading his annual reports have sparked some kindling in my woolly brain.

Finally, my closest friend, Phil DeMuth, has spent countless hours doing research on investing, often on vague lines I have suggested to him, but usually on his own thoughts. We talk of little else but investing, and it is always useful. Few men that I know have as good a friend as Phil and I am grateful.

Well, maybe that wasn’t final. . . . The real acknowledgment is to life its own self. Life has flattened me so many times, lifted me up and laid me down low, given me a wildly false sense of security, then showed me who was boss, taught me so much fear and humility that I felt compelled to offer the lessons in this little book to those younger than I am. “Experience keeps a dear [meaning ‘expensive’] school,” said Ben Franklin, “but a fool will learn in no other.”

I am that fool—but like many a fool at a King’s Court, I have seen plenty and can share it. Maybe it can all be summed up by what my Pop said: “Be prudent.” But what is prudent? Maybe some idea of it can be gleaned from this book.