American Sucker

Really enjoyable read:
Let's try not to build great expectations here. Denby is not a financial professional, he's not even a financial journalist. He's a self-described "liberal arts guy". Don't read this expecting to get a lot of insight into the market or as a "how to" guide (or even a "how not to" guide). Read this because it's an enjoyable read. I read it on the train on my commute and was thoroughly entertained. He offers great insight and philosphical introspection into what was going on in his life and how his obsession with the market intertwined with it and coincided with some major events in his life. He also offers first-hand glimpses into some very high profile stories from the bursting of "the bubble". Good stuff.

Full of Insights into the Mind of an Investor:
Basically, American Sucker is an autobiographical look at the experience of an individual stock investor/trader during the period of roughly 1999 to 2002. That, of course, was very challenging time for participants in the equity markets and it is clearly documented in the text. Before I get into talking about the story, though, it's worth taking some time to consider the author. Denby is a writer used to addressing a fairly sophisticated audience. His primary vocation was as film critic for the New Yorker and he had previously authored a book discussing the classics thinking of Western civilization. As such, his language is not that of one writing for the masses. I consider myself pretty well read and with a decent vocabulary, but there were several words Denby used in American Sucker I'd never heard before. That said, I didn't find the book to be pretentious or anything like that. From a writing style perspective it was a pretty smooth read. Getting to the subject matter, I found it a really interesting perspective on the thought process of the individual investor during a time span which ran from euphoria over the prospects of profits from a market rising rapidly to the depths of despair in the face of not just falling prices, but also destroyed confidence in the whole system. As such, Denby caught the tone of that whole period of time during which the stock market peaked and then fell in the most dramatic of fashions. In fact, I couldn't help but draw comparisons to what's going on in the markets and the economy right now. I think the first real benefit of reading this book for someone involved in the markets is the psychology of investing which plays out in the author's thinking and actions. He starts off not wanting to miss out, wanting to get his fair share out of the booming stock market of the late 1990s. The euphoria of the time combined with personal developments in his life to lead to toss all his usual caution to the wind and jump into things with both feet. Later, as the markets start to unravel and his portfolio value is dramatically reduced, Denby talks through the waves of hope and fear that are so often found in times of strain. Basically, anything you have ever read about in trading psychology texts regarding the way most people's mental process works while watching their account values rise and fall are clearly seen through Denby. It's all there. As a reader, you can actually see the thoughts and actions which create the price patterns so prevalent in bear markets. Along the way, Denby documents his evolving beliefs as events in the markets and the performance of his portfolio combine with events in his life. There's an important lesson to be had there. Your trading and investing cannot be entirely separated from the rest of your life. They are inter-related and that's something you need to realize can impact on what you do and how you perceive things. What makes the book even more interesting is the author's relationship with some of the major controversial figures of the time period. One of them was Henry Blodget, the disgraced Merrill Lynch technology analyst. Another was Sam Waksal of ImClone. Denby's interaction with both men feature prominently. Overall, I found American Sucker a very good read. Denby does spend quite a bit of time ruminating on the subject of greed and related topics, as well as some other philosophical ideas - his own and that of others. Some readers might find this stuff uninteresting and I will admit that at certain points I skimmed along when the narrative stopped and the deep thinking started. It's an autobiography by a well read, sophisticated, and mature individual, though. You can't expect it to be without introspection. In short, I definitely recommend this book for traders and investors and for anyone else with an interest in the markets.

Fails as a narrative:
The premise of this book intrigued me greatly. The effects of the 2000 crash as told through the eyes of an average Joe who was swept up in the hysteria? Fascinating. I looked forward to reading and feeling the effects of that great decline in the stock market as told by an ordinary man who had experienced it first hand. I've read plenty about the bursting of the tech bubble-now, I thought, I could feel the human element behind it. Unfortunately there is no human element in American Sucker. Denby himself is a hollow character, flat and one-sided, puffing himself up with intellectual and philosophical musings while failing spectacularly at creating himself as a character. It is the sort of narrative one would expect from a medieval morality tale-as the market spirals downward (though there is little actual commentary on this-it's more of an incidental) and the technology bubble collapses, Denby receives just the right revelation and insight at just the right time. Mere days before the March 2000 meltdown he ponders the seven deadly sins and decides that, in fact, greed is the most deadly of them. How convenient that such an epiphany should come at the exact perfect moment And it does not stop there-without fail an impending crisis is prefixed with an ironically well-placed musing on that exact subject just days or hours before the event actually happens. Yet for all these discussions on moral and philosophical discussions, for all the flashes of light the muse of intellectual snobbery generously gives our "hero," Denby proves his incompetence at seeing that which is right in front of his face and does absolutely nothing, contenting himself with metaphysical revelations of wealth, greed, and envy as his capital vaporizes before his glazed over eyes. To call it missing the forest for the trees would be an understatement. The NASDAQ crashes, but it goes unnoticed among romantic idealizations of festive holiday celebrations and epiphanies that come, conveniently, at just the right time and as fully developed ideas. Denby is shown the writing on the wall repeatedly but cannot recognize it-for all his attempts at flaunting his intellect he is remarkably slow. When someone tells him something he does not want to hear he conveniently dismisses that person as a fool, regardless of any amount of reverence or respect held for that person before his or her naysaying. There are redemptive moments. At one point, Christmas, 2000, Denby actually talks about his stocks, and allows the reader the gaze inside his portfolio he has withheld for 200 plus pages. At that point, as in so many others, Denby realizes, with uncanny clarity and amazing insight (hindsight is, however, 20/20) that he's made a mistake. Yet still he does nothing. There are other moments as well-brief respites from the intellectual fluff-where Denby comments on the market, describes how he felt, what the general feeling on the street was, and at times he even elaborates on the hope he and others struggled to keep alive. Unfortunately these moments are few and far between-more often market commentary serves only as a launching point for some snobbish flexing of the intellect. All in all, it seems that Denby had a contract to write a book about the market, and, with the bursting of the tech bubble, this ended up being the best he could come up with. He even alludes to this several times in the text. And so it's possible that this book was thrown together without much regard for actual content, and may have even had a predetermined length which is achieved only through Denby's incessant ramblings. Having read the book, that certainly seems to be the case. Or maybe Denby is just that poor a tale-teller, whatever his talent as film critic may be. Either way, I couldn't help but wonder, as I finished the book if the American Sucker referred to in the title was actually ME, having taken the time to read the book and having been disappointed more or less throughout.

To Be Or Not To Be Angry.:
In many ways, the author is the typical loser; first, his wife and children after the divorce, and then trying to find a way to get on with life -- so what else in new? It happens to the majority of us at one time or another, and we live on to regret marrying that person in the first place. A thing is itself and not another thing. He thinks in riddles sometimes. Instead of accepting the inevitable and moving on to a new place, a better place, David is the typical American male who thinks he's the king of the castle in his own home. Far from it. The woman always rules the roost, or in the new movie I just saw, 'Charlotte's Web,' the rat does). He wants his cake and eat it too; the fancy Upper East Side apartment near Central Park. Holding on to the past, be it an expensive apartment, a woman who loves someone else and not you (perhaps never you), an old clunker (car) for sentimental reasons -- none of that works these days. The coming year, 2007, is the time for freedom -- at last. Freedom to be yourself in your own way and not molded by another. Freedom from the demands and drudgery of a bad marriage. DAvid, a dreamer with a vision, decided he, a novice at the stock market, can make $1,000,000 to buy his former wife's share of the abode. If he'd loved her, he would have given it to her "for the sake of the children," being a greedy man, he wants to live a movie fantasy life creating the same "home" for the kids to visit. Sucker! Kids like variety these days, they get tired of the same old thing, and they grow up and away from the nest before you know it. Don't trust a tech guru. One in Milwaukee had the ability to hack into my computer to destroy it via the Internet. Davidted the wrong people, Martha Stewart's financial group (she spent time in prison for tryiing to bilk the public; I won't watch her ever again). On a show made in Heaven, she pretends that nothing ever happened and she can prance right back into one's living room and be a friend again. No siree, I don't forgive easily. Once a felon, always a felon. It sticks with you. Envy is described as a snake in the garden and, finding nothing vain to attack, would turn back and bite itself in bitterness. No one gets too rich to envy others. I once spent a week in a strange house to dog-sit, and after getting out of that luxury, I said I would never envy those in big houses ever again. Upper New Yorkers ahve the illusion that life's greatest daners can be avoided, that everything will be okay "if only one never makes a mistake." One cannot make a mistake! I have news for him, we all make mistakes all of the time, from the simple silly idiot kind to the sublime. Choosing the wrong people to love and trust is the biggest mistake in anyone's life. Desire, regret, passions, obsession, mistakes are life and we can only strive to recover in one piece the calamity these things cause. Some part of our psyche gets lost along the way. Money is the root of all evil but it does not buy happiness, contentment, real love. Lose it and you're a bum, but homefree to be yourself and enjoy just being alive. He's a freelance writer, the most desperate of all literary occupations -- who says all writers are literary? Not so many I know can even write proper grammar. False successes like Yahoo and AOL (I'd add Google to that category as those boys never grew up -- their tree will fall.) were the investments which failed for him. He quotes Alexander Pope, Dante, Freud, and Theodore Dreiser to show the reader what a well-rounded intellectual he is. Greed dissolves the foundations of character. Along the way, he lost his balance. Greed was, is, a soul-destroying force, a canker wearing away one's innards. Religions, political, and economic moralists consider man's "reason" a destructive madness. God is wrathful in the Old Testament of the Bible; so is Achilles in 'Iliad' the first warrior of the West. Indifference to mass suffering is the most destructive form of sloth. Envy is an unambiguously nasty, a low despicable emotion. Envy ruled the Upper West Side of Manhattan and David Denby, film critic for 'The New Yorker.' He and Betsy Pickle would make a good pair.

A film critic's own story rather than a personal description of the madness of the "Internet" crowd:
I had been attracted by the very smart design of the book cover which resembled the tickers on Bloomberg, and the very positive comment by Justice Little, one of my most favorite reviewer here on Amazon. So bad that I had read only half of it and given up. Perhaps I had too high an expectation of it as the modern day "Extraordinary popular delusions and the madness of the crowds" per description on the back cover, and that it would be filled with plenty of feelings/experience of the author during the whole Internet Bubble catastrophe. In fact, the author had given me much stuff of his personal life that's not investment/trading related at all. If and only if you will be satisfied with the stylish writing of a renowned film critic irrespective of what he wrote, you may give it a try. For those who wanna read not to fall into the same kind of irrational exuberance trap in his/her investment life, "Devil take the hindmost" and "Origins of the Crash" are much better choices.