When the stock market goes up, it usually does so without a murmur.

When it collapses, it does so with a vengeance ... and very noisily, too.

We warned you.

Over the past fifteen years, RALPH has put up a variety of articles, readings, letters, and reviews of books on investing in general and the stock market in particular.

Here are a dozen that we consider prescient.

What Goes Up:
The Uncensored History of
Modern Wall Street as
Told by the Bankers,
Brokers, CEOs, and
Scoundrels Who
Made It Happen

Eric J. Weiner

(Little Brown)
The best chapter in the book, by far, is titled "Black Monday," being a chronology of the week before and the days after Monday, October 20, 1987. On that day, the stock market was down 500 points on the Dow, an astounding drop for a single session, exceeding those of 1929.

As the story is carved out by the author, many of the characters come to tell of living with the second of what Adam Smith labeled the main ingredients of being an heavy investor in the market: Greed on the Upside, Fear on the Downside. Only in this case, Fear was transformed for many on the long side into Naked Terror. Including the fair-haired-wunderkind of the 1980s, Peter Lynch, manager of the Fidelity Magellan Fund.

Lynch happened to be in Ireland, on holiday --- and his fund, in one single trading day, went down in value by two billion. That's 2,000,000,000 rutabagas. What would you do if you woke up of a Tuesday to find that your baggage had been lightened by two billion?

But the drama of Black Monday revealed here, and the messages for the average investor, are:

  1. These things come out of the blue;
  2. The specialists who are supposed to "make the market" simply walk away from their telephones, letting the stocks go into free fall;
  3. Terror becomes universal --- from the most sophisticated to the most innocent young novice.

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A Passion to Win
Sumner Redstone and
Peter Knobler

(Simon & Schuster)
Redstone believes in Redstone. With a vengeance. He also believes his story is worth telling, which it is --- if you are interested in corporate back-stab, the egregious drive to turn millions into more millions, lawsuits cast out willy-nilly to scare the hell out of the competition, the whole astonishing ball-of-wax that makes American corporate culture so soul-destroying.

"I grew up in a tenement in the West End," he tells us. "We didn't have a bathroom in our apartment." Well, maybe. Or maybe it was hidden behind the servant's quarters. Boston Magazine tells us that, during Redstone's youth, his father, Mickey Rothstein, had "a trucking fleet that won lucrative carting contracts with the city." There may have been no flowing water in the apartment, but there was certainly a rich flow of cash.

In fact, Rothstein had the assets, in 1934 --- during the worst of the depression --- to buy land for one of America's first drive-in movie theatres, on Long Island. Thus when Redstone tells us that the dime he spent on carfare to get to Boston Latin High School every day was a strain for his family, we should perhaps dub it as creative whimsy. Hell, I don't know: maybe A Passion to Win is fiction disguised as biography, much like Moll Flanders, or a Horatio Alger novel. The hero grows up poor as a churchmouse, then gets insanely rich because of his untrammeled drive. Only in America could a good middle-class fellow from Boston dwell on an imagined early poverty in order to win our hearts.

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Rainbow's End
The Crash of 1929
Maury Klein
This book takes us (mostly) through the post-WWI years and up to and through the first crash. It explains the Federal Reserve Banking system in a way that even those of us who flunked Samuelson's course can understand. The most interesting fact: that when they set up the Fed, no one knew what they hell they had or what they were supposed to do.

    The new Federal Reserve System started life in November 1914 with more problems than prospects. From the first it was a prisoner of paradox: it was supposed to be firmly under public control yet free of political influence; and it was supposed to be free from dominance by private bankers, yet it was dominated by bankers. Who else, after all, understood banking? But few bankers approved of it at first; some denounced it as "authoritarian" and "socialistic," others merely as unworkable. The act offered only broad hints concerning its mission and was even more vague about the methods to be employed.

In other words, they didn't know what they were doing. I would suggest that they still don't.

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Mother Makes a
Killing on
Mother was a stock nut. Starting when my Dad died, she turned from being a rather distracted Mum and party-goer to a full-time player of the market. Always the teacher, she formed her first investment club in 1955. "When your father passed on, I didn't know boo about stocks," she told us. He left her a small portfolio, which in the next forty years, she turned into a fairly sizable nut.

She studied stocks, and the market, endlessly --- not only in Barrons, and The Wall Street Journal, and Businessweek, and Forbes, but poring through Standard & Poors, reading annual reports --- most especially the all-important footnotes (which, as with Gibbon, often contain the most lurid information).

She was doing what Peter Lynch says to do, only she was doing it when he was still in diapers. Buy and hold, buy and hold. Her portfolio was chock-a-block full of stocks that she culled (counting splits) at bargain prices: Coca-Cola at 7, Philip Morris at 3, Winn-Dixie --- her all time favorite --- at 3-1/2, Florida Power and Light (later FPL) at 8-1/4, Pfizer at 12, American Express --- bought right after the canola oil scandal (remember that one?) at 15, Scott Paper at 6-1/2.

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Sex and the
Single Stock

How I Made $10,000 in
Junk Stocks in
Six Months

Terrence "Buck" Mellon
Because I had been a subscriber for so long, The Wall Street Journal sent me a young lady to do a subscriber survey --- to ask what I liked best and least about the newspaper. I told her it was the layout that got me: it was the most classically designed newspaper in the country at the time. I also told her I didn't like the comics. That shows you where my head was at.

I have read dozens of books specifically concerned with common stocks, bonds, preferreds, convertibles, convertible preferreds, warrants, puts, calls, futures, pasts, and all the other money-suckers that have been set out there to bedevil us poor investors.

After all these years, and all this reading, and all this experience --- I continue to lose my ass, despite the fact that I have committed to memory the two great mots of investing that were uttered a few years ago by the very sage and funny Adam Smith, to wit:

  • A stock does not know that you own it; and
  • The stock market is ruled by greed on the upside and fear on the downside.
(The only editorial change I would make to this last is that the market tends to be "ruled by foolish cheer on the upside, naked terror on the downside.")

Believe me: I've been there.

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Citibank and
The Dead
I placed a call to CitiBank:

Me: "I am calling to tell you that she died in January."

CitiBank: "The account was never closed and the late fees and charges still apply."

Me: "Maybe you should turn it over to collections."

CitiBank: "Since it is two months past due, it already has been."

Me: "So, what will they do when they find out she is dead?"

CitiBank: "Either report her account to the frauds division, or report her to the credit bureau ... maybe both."

Me: "Do you think God will be mad at her?"

CitiBank: "Excuse me?"

Me: "Did you just get what I was telling you ... the part about her being dead?"

CitiBank: "Sir, you'll have to speak to my supervisor!"

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David Richards
Q: Let's segue into the issue you raised of political stability.

Bush is taking the country in a direction that is very different than it had been going in for the last 50 years. The notion of pre-emptive wars and the pre-emptive war that we have in Iraq is a failed strategy. If [Deputy Defense Secretary] Paul Wolfowitz were a money manager, and he made the forecast about weapons of mass destruction and the Iraqis greeting the American forces with flowers, and then declared "mission accomplished," when in fact we were totally unprepared for the uprising we face there, he would have been fired for incompetence. No one responsible for these decisions has been fired. If you had a big money-management company with bad research and bad portfolio managers making bad judgments, that would be the end of that company.

Q: Yes, and I believe there's been a few examples of that.

A: These people are delusional. They are deluded by the apparent military power of the United States. There are three levels of military power, and we have a great advantage in one: the middle level. The top level is the ability to produce atomic weapons and missiles. Now the Chinese can do it. The Russians can do it. The Israelis can do it. The Indians can do it. The Pakistanis can do it. The British can do it. Nobody has an advantage, and these weapons cannot be used without blowing the world to smithereens. In that sense, they are useless. The middle level is about projecting force, and that's what we're good at.

We have airplanes. We have aircraft carriers. We have guided missiles. We have electronics. We have all that in profusion. There we have an advantage. However, at the third level, we have no advantage at all, and that's in guerrilla warfare and in controlling territory. That's the problem in Iraq. We needed a multiple of the number of troops that we have there to control that country. Unlike the Russians and the Chinese and many of the European countries, we don't have a conscript army.

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The Making
Of McPaper

The Inside Story
Of USA Today

Peter Prichard
(Andrews, McMeel and Parker)
The prime thesis of The Making Of McPaper is that Gannett created the second national newspaper after the Wall Street Journal. We aren't too sure. USA Today is rich in graphics, lewd in color, wretched in content, but its closest competitors are not the WSJ but weeklies like The National Enquirer and The Star whose market shares have been dropping since the introduction of USA Today. There are others, too --- English-language newspapers as meretricious as Gannett's, though not yet of these shores: the London dailies like the Daily Express or the Daily Mail --- covering England like the dew with a combination of sex, scandal, and jingoism.

The Making of McPaper is ostensibly the story of the conception, execution, and success of USA Today. But the reader must be forewarned: the author, one Peter Prichard, is scarcely a mole within the Gannett organization. Much has been made of the fact that this is Gannett, warts and all (vide the semiserious title) --- but the biggest of them all, one Al Neuharth, ends up being practically canonized for being so insightful, wise, interesting, foresighted, driven, astute, etc., as to conceive of and gamble his career on USA Today.

Canonization of business leaders is all the rage now, starting with the elevation of Lee Iacocca somewhere out there just to the right of and perhaps a tad above the divine. Neuharth, too, is one of those hard-driven, hardball, hard-ass players, but when all is said and done, according to Prichard, he is warm, kind, loyal, truthful, brave, with a heart as big as all outdoors. Exempli gratia: when it comes to announcing his retirement,

    Neuharth made an announcement that startled many in the room. His voice began to break as he said: "My instincts as an investigative reporter and editorial analyst tell me that the time has come to take another step in the planned and orderly transition of Gannett's leadership to the next generation.
    "I am not going away, " Neuharth said, his voice full of emotion. He seemed to be holding back tears. "I love this company and the business and profession we are in."

Whenever they trundle out the lachrymal discharges of the leading heavy, it's probably time to man the bilges, especially when we know that he is not necessarily riding away into the sunset after a job well done, but more likely tucking his $100,000,000 in options in the trunk of his Lamborghini and driving off into the Poconos.

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How to Think
Like a Millionaire

Mark Fisher and Marc Allen
(New World Library)
Do we really want to think like a millionaire? If so, which one:
  • J. P. Morgan?
  • John D. Rockefeller?
  • Henry Ford?
  • Donald Trump?
  • H. Ross Perot?
  • The nit-wits running Pacific Lumber, chopping down all our redwoods?
  • The guys who just built those repulsive townhouses up on the hill where I used to run and play and lie under the stars in the fields at night?
  • The guys who own Cox Cable and jack up the fees, what the traffic will bear, every two or three months?
  • The guys who own Fox Television, giving our children (and our children's children) between fifty and sixty bloody, graphic, in full-color murders a week?
  • Snoop Doggy Dogg?
Which millionaire do you want to think like?

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"The public thinks we won the war and that it is over. They don't realize we are going to keep more troops in Iraq than we thought. The deficit will grow. We are not going to win the peace. Iraq is so divided internally it makes Afghanistan look like one unified group. Do you think soldiers know how to straighten out a country? They know how to make war. Do you think the State Department has the people and the training to help the country rebuild? Do you think we have anything like that?..."

Since this article went up, we have received several e-mails concerning RALPH's editors' (and Glickenhaus') politics, ancestry, and age --- one of the milder epithets thrown at him was that he was "an old coot."

His second interview appeared on 7 June, 2004. In this, Glickenhaus is a bit more forthright --- if such is possible --- on his thoughts about the current administration in Washington. He also opined that he would much prefer to have been living during the French Revolution (he called it "a fascinating time to have been born.")

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You Too Can Invest
In Foreign Real Estate

(This Being the Version that
Will Never Appear in
Holiday Magazine)
When all were in place, he opened Vol. MCDLVIX to Page 253 and read the entire text of the agreement in the voice of the dead and dying. I barely understood, watched instead a mean little street-dog humping a heavy-dugged bitch who acted as if she had seen and heard it all before. After that show was over, I watched the rooster run down into the arroyo to murder a black leaf beetle.

The baby came to life and squalled. A south wind came through from the nearby ocean and sweetly ruffled my hair. Juana, Julio's plump, round-faced live-in lady, came through on her way to the wood-fired comal to make supper. Throughout all our dealings, there was the unbearably delicious smell of heated tortilla. One of the thin daughters ran out to pick up the wailing child. The afternoon sun cooked the rooftop (and us) and an old woman with a shawl and prune-face and a straw whisk moved the dust from one side of the palapa to the other and then back again.

Julio was recently enlisted by Central Casting to appear in our movie. Formerly, he had played Pancho Villa and various other feckless revolutionarios and he still sported a ratty black moustache, restless tar-pit eyes, and leathern skin. Rather than carrying an ammunition belt over his shoulder and a campesino sombrero and boots with spurs, he wears a grey Yankee baseball cap pulled low over the eyes and a tee-shirt that says "Acapulco Is For Lovers." It is rumored that the reason the ceremony took place here rather than in the notario's office downtown is because Julio has some unnamed felony hanging over his head and he didn't want to get nabbed in the midst of enjoying his new-found prosperity.

There was one other presence here. Since I am a little foggy on local jurisprudence, I bought my lawyer-for-the-day, Ramon. He too had also been sent in from central casting. He had impeccably trimmed fingernails, white shirt casually unbuttoned (two buttons down) over a hairy chest, a tiny gold cross suspended in the veldt, tight black pants, alligator-pointy boots, and an ever-ready, ever-friendly toothy smile.

When the reading dribbled off, el abogado lifts up the backpack, which I had earlier delivered to him, complete with Donald Duck, and dumps the twenty-eight fat packets of smelly pesos on the table. The Notario's face is blank, Julio scarcely lifts an eyebrow, but he and his brother --- both dark, scratchy, shoeless --- smarten up enough to pull up to the table and, without missing a beat, count the money rapidissimo.

When he nods, Don Rogelio turns his big black note-book around. With his field-worker fingers, Julio scrawls his signature, opens one of the packets of pesos, gives 3000 of them to the Notario, shakes hands with everyone and disappears --- complete with loot --- into his dark, hot, spicy house. Presumably to announce that the ceremony is over, he turns the radio up ... way up: Amor sin besos no es amor, sings a trio at top volume, through shattered speakers and windowless windows. Love without kisses just ain't love.

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I told Carlos I could let him have the other plots at rock bottom prices. In that way, I said, he could get in on the ground floor. In the parlance of the stock market, a grave-site would never be "falling out of bed."

He is now beside himself over this new potential bonanza. He immediately suggested that we file an application with the Securities and Exchange Commission to form a REIT --- a real-estate investment trust --- of our own, say, The Gravesend Trust. With the approval of shareholders, we could go full-time into acquiring crypts, mausoleums, overgrown churchyards, moss-bound catacombs, Indian burial mounds, Mesolithic middens, and Egyptian pyramids, whenever and wherever the price is right.

We are just waiting for our magic bird to complete the balance sheet analysis before we make our filing with the SEC. If it pencils out, then, by my chinny chin-chin, we'll corner the market in haunted grottoes. Check with the Financial Times or your fairy godmother to learn about our first IPO.

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Poetry Magazine &
Their New-Found
Ms Helen Lothrom Klaviter
Business and Projects Manager
Poetry Magazine
60 West Walton Street
Chicago, Illinois 60610

Dear Ms. Klaviter:

We understand that Poetry magazine has just been awarded $100,000,000 to better American poetry.

We here at RALPH are delighted at your windfall, and wish you the best of luck as you disperse this largess in a fashion that will not force the poetasters of America into acts of terrorism. We would like to help.

In our ninety issues over the last eight years, we have published almost 500 new and distinctive poems --- plus dozens of reviews of books of poetry coming out of New York, and the university and small presses. However, over the past two years, our offices have become disheveled, our staff sullen, and our hopes are turning wan and troubled.

Our poetry editor has informed us that to work at RALPH may be a tonic to his heart but that it is toxic to his personal life. He cannot continue to support wife, three noisy children, and two noisy mortgage payments on $500 a week.

We've been told that the drop in funding for our non-profit foundation is due to an acute sickness in the Dow Jones Industrial Average.

As you may know, the DJIA has been moving south over many months. Our benefactors who are dependent on its perambulations have apparently gone south, too. Since they don't return our telephone calls anymore, we must presume that they have forgotten that the business of recasting American letters requires a bit of cash flow.

Therefore, we would like to apply to you for a one-time grant of .0001% of that which Ruth Lilly of Eli Lilly Co. donated to your organization.

We promise to be astute and parsimonious with your monies. We will continue to use our woodburning 19th Century computers and the telephones that you actually have to dial. We will not squander your assets on fancy offices with fancy paintings and fancy expresso machines. And the only saunas we'll be offering our staff will be the same old un-air-conditioned offices at Broadway and Third, around the corner from Pacers Theatre ("Just a Kiss Away").

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Be My Guest
Conrad Hilton
(Prentice Hall)
Money is the great liquid force in American life. It is transferable into any other commodity, such as a Vanity Press book. It is also the great savior of The American Way. The ubiquitous message in the newspapers, on television, in the throwaways, every day, in all forms, is anyone (even you) can make a jillion dollars. Those who don't get on the gravy train just aren't persistent nor believing enough. It is a potent subliminal message, powerful counterpoint to the other media messages ---- and it well explains the ghastly fix we're in now.

One of the most persistent messages of the Make-a-Million Scenario is suffering. All these books, whether by Donald Trump, or Lee Iacocca, or Conrad Hilton, are a veritable Dear Abby in the pain department:

    If you climb Mount Everest, no matter how carefully you plan, anything can happen. Your ice axe slips, your oxygen gives out. A concealed crevasse swallows you up. Well, that's about the way it was building my first Hilton Hotel.

Before Conrad ascended to the last and greatest suite, Be My Guest was to be found in every Hilton Hotel room, next to the Gideon Bible. It means that when you woke up alone in your drab room, you'll get to choose between climbing up Golgotha or climbing through Corporate America. The author was not just a gaudy hotelier --- he is also a political commentator with the same general comprehension, wit and vision as Vanna White:

    The old concept of "War" and "Peace" belongs to a world which the Communists have destroyed ... The essence of Communism is the death of the individual and the burial of his remains in a collective mass. And the insidious thing, the frightening thing is this: It can win even when it is losing.

"It can win even when it is losing" Good Lord. How in the hell can you fight an enemy that tricky? Only God and the Hilton Hotel savants could survive in such a dog-eat-dog world.

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