For almost a decade, Bill Gates has been writing about his favourite books, and the title “Business Adventures: Twelve Classic Tales from the World of Wall Street.” by John Brooks is the one he likes most.
Just this weekend, Gates repeated his New York Times suggestion, naming his favorite book “Business Adventures.” In a sharing with the Times, he said that his friend Warren Buffett lent him his copy version years ago and also admitted to Gates that it was his favorite business book too. And that paperwork is still his preference currently.
Buffett had actually given his copy to Gates as a present at their first meeting in 1991. Two celebs have over time called it “the best business book” ever.
The book, published first time 52 years ago, is a series of business papers that Brooks penned while serving at The New Yorker in the 1960s. It discusses several of the most critical milestones in American industry in the 20th century, and, according to Gates, most of those values remained unchanged. Even though in the past of over half of a century with the non-stopped changes of the world, Brooks’ observations still keep its values and real-time lessons.
The event Piggly Wiggly long ago before the current GameStop
A narrative that shows a remarkable similarity to the latest GameStop saga, which had seen Reddit users buy up shares from the bankrupt video game retailer to foil experienced short sellers, is outlined inside one of the book’s chapters. The tactical retail investors employed, referred to as a short-squeeze, sent GameStop shares soaring. The share price of the company used to reach a number of $483 per share, before descending more than 90% of its value. The stock is priced about $46 per share at the moment.
Brooks describes in “Business Adventures,” the attempts of a Tennessee grocer who wanted to take on Wall Street over a century ago. Clarence Saunders established the first advanced grocery store in America, named Piggly Wiggly, in 1916. The idea was incredibly popular, spreading into more than 1,200 shops around the nation.
By 1922, on the New York Stock Exchange, Piggly Wiggly began trading, bringing Saunders much prosperity. Yet this firm became the focus of short-sellers when Wall Street learned a few Piggly Wiggly stores were facing bankruptcy, or Wall Street traders who were hoping the share price of the company would collapse.
Brooks noted in the book that Saunders had to loaned $10 million to prevent the short-sellers, acquired huge volumes of his company’s shares, and persuaded other buyers to buy-in, more than tripling the share price. Saunders made a statement saying that he was able to immediately beat the players within their own game on Wall Street.
The New York Stock Exchange, sadly for Saunders, stopped and terminated trading in Piggly Wiggly, which provided Wall Street traders with more time to manage their stock bets. Piggly Wiggly’s shares ended up taking a hit and Saunders had to declare bankruptcy.
The lessons from short squeezes in the history
It’s possible to take related lessons from Piggly Wiggly and GameStop. Saunders personally took the bets of short-sellers against Piggly Wiggly, Brooks recounts. Yet analysts agree that when it comes to investments, feelings won’t help you, and you’re better off evaluating an investment on the fundamentals instead of investor enthusiasm.
Brad Klontz, licensed financial planner, also a professor of financial psychology at Creighton University told Grow that it was necessary for him to understand when you had to deal with money or investment problems, He added that in case the fear of losing could be the reason driving you to speculative stock trading, and the way you did that is actually an unwise approach, even it took time, and eventually end up with failure.
The two short squeezes even demonstrate why more and more analysts agree that trading individual stocks should not be part of your long-term strategy, and specifically, engaging in potentially risky steps such as short selling.
Carolyn McClanahan, a licensed financial planner and the director of financial planning at Life Planning Partners in Jacksonville, Florida, recently told Grow that if you were just a regular investor intending to deal with problems and reverse the situation, you should not waste your time with an effort of beating other participants when the situation did not incline to you and the chance of winning is minor.
For the general public, Ben Carlson, a CFA and the director of institutional asset management at Ritholtz Wealth Management, advised Grow, the slow approach to become wealthy is definitely the right one. Individuals who engage in messing around their savings, working and moving around, finally catch up with you in trading and potentially overtrading. For certain individuals, that isn’t a long-term approach.
“Business Adventures” on Bill Gates’s Blog
The billionaire Gill Gates have GateNotes – his personal blog – discussed about the business book Business Adventures.
He talked about his first meeting with Warren Buffett back in 1991, he asked his friend about his favorite book about business and expressed the desire for any recommendation from him. Immediately, he mentioned Business Adventures, by John Brooks. He possesses a copy of that book, and he lent me after that without any hesitation. Gates admitted that he was so fascinated to know how the book was and who is John Brooks. He had heard neither of those two names.
Currently, he said that Business Adventures probably is the best business book in his life, more than two decades since Warren literally gifted that book to Gates, and more than fifty years after first being published. John Brooks is also my favorite writer for business topics. Anh he’s still held that Warren’s copy up to now.
A conspiracy theorist can wonder if this out-of-print series of articles from the 1960s in New York could have something to say at this point about trading or business. After all, since Brooks analyzed Xerox in 1966, the company’s top-of-the-line copier weighed 650 pounds, cost $27,500, demanded a full-time manager, and, for its ability to overload, and accompanied with a fire extinguisher. Since then, it hasn’t kept the same, or we could say it’s significantly changed.
It is definitely accurate that much of the business specifics have evolved. Yet they don’t have the basic principles. The finer perspectives from Brooks about business are as true today as they were back then. In spite of its durability, Business Adventures stands alongside The Intelligent Investor by Benjamin Graham, the 1949 book which Warren said is the best investment book he’s ever read.
