5.0 out of 5 stars Cautionary Tale For The Investor
Excellent, lively well written, American Sucker is a cautionary tale for the individual investor. Denby gives his inside account of the latest investment bubble...the tech craze of the 1990's. Along the way Denby described in sordid detail all the angst and pathos the he experienced in his private life ( his divorce, 9/11 etc.) He wants to buy out his wife for the right...
Published on March 28 2004 by Joe Cool
3.0 out of 5 stars Something's Missing
Although Denby admits his privilege and the folly surrounding his desire to raise $1 million in order to save his apartment from the fall out of his divorce, the reader is still confronted with the question "why?" (why did he risk so much for a piece of real estate, why did it take him so long to realize that "home" is moveable, why could he not see...
Published on April 5 2004 by Marsha Wood Wirtel
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2.0 out of 5 stars Dumb, dumber, and greedy,
Having read a good but cautionary review when the book came out and having an interest in the topic, I waited for a copy at the local library. Good idea. Buying this book to learn something about investing would be like buying the stocks Denby chose to make money. At least the reader's intentions or motives would be a bit more rational. Denby apparently has watched too many movies and read too many great books. What he really needed was some good common sense.
The title is misleading. Denby's entire downfall is not based on his being "American" or a "sucker". Yes, he was greedy and willing to be gullible. He waxes eloquent on greed and envy. But these are besides the point. Yes, he listemed to precisely the wrong people. But his initial, critical, deadly mistake was to assume that he could make a million dollars in one year by not doing anything other than "invest". He was greedy, envious, naive, uninformed and lazy. He wanted so much to make that million that he ignored red flags, warning bells, and first-year business student advice on investing.
He has a cynical view of investing, based on Keynes' observations as to the risks involved. That pretty much explains how he thinks he can make a million in one year just by buying technology stocks in 2000. Denby also decides that taking risks means being irrational, that progress requires irrational behavior. What he fails to do is to listen even to the people who he indirectly accuses of having duped him; even Henry Blodgett told Denby to be more careful. Denby seems convinced that Alan Greenspan's effort to raise interest rates was the market's true undoing, This is a bad case of denial from the recent dot.com bust debacle.
Denby's self-absorption with his attempts to maintain his liberal, upscale, upper West Side lifestyle and apartment in the face of a pending divorce speaks volumes for his willingness to do incredibly foolish, shortsighted and greedy things makes this more of a lesson in how not to dissolve a marriage than any sort of morality play, note of sympathy, or tale of snake oil salesmen swindling a poor, innocent, well-read but naive movie critic. It is hard to feel sympathy, even for such a large, personal loss.
4.0 out of 5 stars Greed and Envy,
It's hard to feel sympathetic for someone who writes for the New Yorker and owns a seven room apartment on Manhattan's Upper West Side. Too bad he became obsessed with the stock market; well, as he admits, lots of ordinary Americans lost more than he did. This is a story of shallow values, false friends, and calculated social climbing. Denby collected people with celebrity, charisma and most important, wealth. No wonder they betrayed him. He wasn't looking for good people, he was looking for glamorous people to use to enhance his social (and financial) standing. Surprise - they used him instead. It's an old story. Can't feel sorry for him, I'm afraid. There are a lot of dissatisfied people out there, people who will never have enough, and whose accomplishments will never give them happiness. Denby is one, his novelist wife who left their marriage for unspecified reasons, is another. I downed this book in one gulp and returned it to the library the next day. Don't buy it. Do read it, and in conjunction with On Paradise Drive by David Brooks. It's the antidote to much happy theorizing about following one's American bliss.
4.0 out of 5 stars Stream of Consciousness,
Stream of Consciousness
This story isn't about losing money investing (speculating?) in the stock market. It isn't about getting caught up in a bubble, despite the writer's constant recognition of that very fact. It is more about a guy struggling to cope with becoming a middle-aged divorcee. As the Epilogue tells us, his financial destruction was his way of throwing a temper tantrum. He was being careless and bold for the first time in his life, and he chose the financial markets as his medium.
Although this is an interesting story, I think the marketing of this book - thanks in large part to the many reviews - paint the wrong story. This is not an interesting book about investing, it more human than that. Perhaps that is one of its greatest strengths.
Do you think Mr. Denby is splitting his royalties with his wife? He wasted away hundreds of thousands of dollars of her wealth. What a grounded person she must be to only respond with "the market will come back." I wish my wife was that understanding.
3.0 out of 5 stars Something's Missing,
Although Denby admits his privilege and the folly surrounding his desire to raise $1 million in order to save his apartment from the fall out of his divorce, the reader is still confronted with the question "why?" (why did he risk so much for a piece of real estate, why did it take him so long to realize that "home" is moveable, why could he not see the truth of the people and organizations he became obsessed with). The answers to these and more questions are hard to come by in the text. Denby is generous with clever text, but stingy with real explanations for his behavior.
Perhaps his story would have worked better, as another reviewer noted, as an article rather than a book length narrative. The text is padded with numerous quotes from Denby's movie reviews (he points out frequently that reviewing movies is how he makes his living) - a "feature" intended to provide insight to his state of mind at the time certain actions or decisions were made, but serves more often as advertising for his bread and butter work. Additionally, Denby sets up the story as a sort of mystery - we know the ultimate outcome of his quest for money, but he wants us to be compelled to turn the pages quicker and quicker to find out the details. Sadly, the device doesn't quite work out - too many of us suffered the same type of economic fall out and it's just not that interesting.
Still, it's not a bad book. Readers who are willing to set aside these, and other, flaws will find it an enjoyable way to spend an afternoon (with liberal page skipping).
5.0 out of 5 stars Cautionary Tale For The Investor,
Excellent, lively well written, American Sucker is a cautionary tale for the individual investor. Denby gives his inside account of the latest investment bubble...the tech craze of the 1990's. Along the way Denby described in sordid detail all the angst and pathos the he experienced in his private life ( his divorce, 9/11 etc.) He wants to buy out his wife for the right to own the family apartment. This is his motivating factor to get rich. Meanwhile, we are introduced to the cast of "charlatans": Sam Waksal and Henry Blodgett. Through his greed and gullibity, Denby "loses" 1 million dollars in paper "losses". But wait, are Waksal and Blodgett really villains, or are they scapegoats vilified and lynched by an angry mob of greedy and gullible investors?
Denby ignored all the basic tenets of investing: he failed to diversify, he bought on emotion, he failed to learn about the companies and the sector before investing, he relied too much on the advise of the insiders. In addition, Denby ignored the advice of the New Yorker's business writer and he ignored the warnings of Alan Greenspan. Denby even admits that he was overtaken by irrational exuberance. Yet he stilled blamed Waksal and Blodgett for his losses. Rather than blame Waksal and Blodgett, Denby should blame the person he sees in the mirror every morning.
Novice investors are warned ad nauseum about previous bubbles in history ( Tulip Craze, the Nifty Fifty). Add to that the tech craze of the '90's. For this reason American Sucker should be part of every investor's library.
3.0 out of 5 stars Want more about his family and less about the stock market.,
In terms of page count, "American Sucker" is about obsessions like money and real estate. But what is going on beneath the surface is something about the loss of family values. [Hey, hang in there with me for a minute--I promise I'm not for Bush.] What we have, at least on the surface, is a happy and successful family, an American success story, if perhaps more New York, upper-west-side literaryish than most. Was there a mid-life crisis? Sure, it happened back before "Great Books," when Denby's wife Cathleen Schine told him "...why don't you take your Columbia courses again?" Why? Because "I no longer knew what I knew." A few years later, "my wife...announced that she no longer wanted to be married to me." So Denby, already vulnerable, is left with "there is no there there;" rudderlessness; oblivion. Porn, suit-in-the-closet affair, foolish investing? He didn't kill himself--he wrote a book! He's a survivor.
I'm not all that up on the New York literary scene or the political correctness of women leaving men, but this strikes me as serious self-indulgence on the part of the wife. Schine's books don't exactly suggest that conventional marriages can endure. In "The Love Letter," the divorced heroine takes up with a younger man (the letter turns out to be from one woman character to another). I haven't read "She Is Me," but isn't it about a wife leaving her husband for a woman? See a pattern?
How does it go? "A woman needs a man like a fish needs a bicycle." Denby should have seen it coming, but who knows what he could have done about it.
Sure, Denby wallows in self-interest and indulgence in this book; but his family is destroyed. Family values meant something to him. Too bad he couldn't figure out how to write about them in "American Sucker." It would have been a lot more interesting to me than the stock market stuff.
5.0 out of 5 stars Thought Provoking,
This is a very important book describing the 90s, a decade of vast growth of wealth in America. But our lifestyles also changed drastically with cell phones (anyone remember large 1989 cell phones), the Internet, and Personal Computing Devices. These technology advances pushed many people into the stock market after watching the vast fortunes made by normal people. It seemed like everyone felt they were a market expert.
So what is a devout liberal to do when he is in the throes of a painful divorce that will significantly change his lifestyle? Put on his capitalist hat and joining the rat race to become a millionaire from stock gains. And for a while it works. But later, he learns the hard lessons of the market and what it can do to the least informed.
In addition to the blind rush to join the stock market craze, other interesting subjects include this liberal's internal conflict with his capitalist adventure, the emotional conflict of his divorce and the effect on his family. Denby also was able to access many of the stock market stars because he was a journalist. The CEO of IMCLONE who is convicted of insider trading is featured as is interviews with Henry Blodgett, the Internet Analyst who was interviewed while the author played the market. This is particularly interesting to hear quotes supporting the market as it becomes clear it has been overvalued.
Ten years from now people can read this book to reconstruct a feel of living in the 90s, stock market gains and harried lifestyles. While I work in the finance business, even if you have NO interest in the stock market, this book will be of interest to explore the mental anguish of divorce and the effect on the family. I strongly recommend this book to stock market enthusiasts, individuals with interest in recent history, people interested in the impact of divorce, and a movie enthusiast as the author is a very well-known movie critic.
5.0 out of 5 stars Worth the read for the issues it raises,
You instinctively know that "The New Yorker" movie critic David Denby ought to be able to tell a good story, and that the author of "The Great Books" ought to be able to weave revelation into the most daunting of experiences. Add all this together and we ought to get a rocking good ride through the rise and fall of NASDAQ 5000 as seen from main street's point of view. And we do.
Needing money to buy his soon-to-be-ex-wife out of their Upper West Side apartment, Denby loaded up on NASDAQ mutual funds in Oct 99 and NASDAQ stocks in Jan 00. The rest is history, as they say. But the process (losing $800,000 from March 2000 to October 2002) is what makes this heart warming tale of decline and fall, and redemption, well worth the read.
Taken from an investor's viewpoint, the book should have been entitled "How to lose money doing everything an investor ought not to do." (1) Don't go into the stock market with a goal of making 1 million dollars in one year - if you want to gamble, go to Vegas. At least you get free drinks. (2) Don't ignore history - every possible danger sign was flashing by the end of 1999, a fact Denby acknowledged. (3) Don't attend high-tech investment dog-and-pony shows and blindly step in the manure spread around by the hosts. (4) Don't be afraid to take responsibility for your own investments. Putting the onus off on somebody else to escape the ultimate decisions is a fool's game. (5) Don't give way to emotionalism, especially when your heart doesn't understand what your head is saying.
All of this is instructive, but the true gems come to light when Denby goes searching for the reasons why. Why did he do what he did, and why did the investment process treat him so shabbily? Up front, Denby admits to being politically liberal with a strong distrust of the business community. After all, he's a movie critic by trade. He goes into deep ruminations on the anti-capitalist, anti-materialistic, anti-consumerism philosophies of luminaries from as far back as Thorstein Veblen and as current as Juliet Schor. Still, he wanted to be part of the Wall Street crowd, the wealthy, as he calls them, and he gladly entered into the dance.
His most revealing, and important, commentary is through his love/hate relationship with ImClone founder and now felon, Sam Waksal. Happy to become one of "Sam's pals" and bask in the light of his dinner parties, Denby's exploration of what made Sam tick is worth the whole book. As he pounds the pavement of Manhattan's sidewalks, searching for meaning, Denby conjures up the 7 deadly sins, and settles on envy leading to greed as the two best fitted for himself and his new cronies on his chosen way to wealth. Near the end of the book, he even tries to offer just how much a "wealthy" person needs to have before becoming "greedy." Yet, as if to argue with himself, he makes the following observation, certainly the most cogent of the work: "The one thing shadowing their (the high-tech entrepreneurs) triumph was aging and its scything climax, death. It was the final victory that capitalism, which had swept all before it, could not achieve - immortality, or at least a long, disease-free ascent into a happy and productive old age. And yet they were arrogant enough to want to lick death. And I believe it was that realization, as much as the drive for efficiency and wealth, that pushed the all-optical network (and tech/biotech revolution) forward." And of Waksal in particular: "He looked to be in superb health, but the threat of a sickened old age was haunting him. This specter ('Every man, if he lives long enough, will get prostate cancer.'), he thought, had to be vanquished, - age postponed, vitality prolonged."
But why does this motivation surprise Denby? Is this not why we have an economy - and capitalism - and progress? To supply the necessities of life for as long as life can be sustained? Continuing, on pages 196 and 197, he sums up the driving force of the George Gilders, Waksals, etc.: "These men were not just fighting off thoughts of death, they literally were not going to accept death, and that made them more ambitious than men of all other generations." That's as heroic a vision as mankind has ever had.
Denby also asks the most important questions for our society today as we sort out what happened. "Does speculation like this...do any permanent damage to an economy? Or is it, despite the ruin it sows among the unwise, a useful and socially benevolent event in the end? And the lesser question is: Must speculation always be accompanied by fraud? Is there something inescapably criminal in the process of quickly raising money for some new enterprise?" Later, he responds: "The answer, of course, is that there's something 'escapably' criminal, and that's why we need regulators, prosecutors, and an ethics that the ambitious and wealthy live by."
In the end, Denby comes to terms with his losses and his failings. It was the breakup of his marriage, the apparent worldwide victory of capitalism (supposedly commercializing all the arts), and the threat that creativity had been siphoned off from the arts into science and technology that had blown a hole in Denby, causing him to question his whole life's purpose. I'm not so sure that Denby didn't secretly rejoice that Wall Street failed him as a God. It freed him to return to his chosen profession, giving two thumbs up to Eminem's "8 Mile" for its "renewal out of economic decline and cultural despair." But as he comes closer to that dreaded "threat of a sickened old age" that drove the Waksals of the world, Denby just might go looking for life's renewal in the companies that the Waksal's of the world built. And then, perhaps Denby will question whether he really was a sucker after all.
4.0 out of 5 stars Fascinating Self-Indictment,
In this memoir of his misadventures in the stock market, movie critic David Denby quotes John Maynard Keynes: Investment "is intolerably boring and over-exacting to anyone who is entirely exempt from the gambling instinct." Denby's rigorous self-examination has made his investment history interesting to those who don't share his gambling instinct. However, I wonder if he has succeeded in truly apprehending the nature of his obsession.
Denby talks about greed a lot, but I question whether greed was so strong a motive in his case. Supposedly, his investment goal was to make a million dollars to enable him to hold onto his apartment after separating from his wife. Despite being frank about his investment income and loss, Denby never tells us how much he earns from his actual work and makes it impossible for the reader to determine how necessary this million dollars was. Also, the object of his greatest desire, the $42,000 Audi A6, was seemingly within the purchasing power of a successful journalist yet Denby refuses to buy it. I would submit that what motivates Denby most is the fear of being left behind a trend. He seems near to recognizing this, with all his talk of time, speed, and the "zipper," the electronic ticker tape visible from his office, and with the urgency he senses in finding popular yet artistic movies to tout. He even condemns Tyco crook Dennis Kozlowski for having conservative tastes in art rather than favoring trendy Rothkos.
Indeed, it is difficult to see how Denby could have been such a "sucker" if mere greed drove him. He has the advantage over most day traders and the like in having formed friendships with a couple of the big players in the 90s bubble, Henry Blodget and Sam Waksal. Instead of gaining wisdom from the two now disgraced operators, Denby is even more enthused by their elusive pronouncements. Incidentally, his portraits of Blodget and Waksal, despite being intermittent and comparatively brief, are unlikely to be improved on.
Unfortunately, Denby often slows down his narrative with efforts to find a deeper meaning to his obsession. Supplemented with references to "Great Books," these discussions can be tedious and unsatisfying. In similar fashion, some of his stories seem to be exaggerated for dramatic effect or to fit a metaphor. Despite these flaws, the book is well worth reading and helps illuminate the mentality of the Bubble 90s.
4.0 out of 5 stars In the Time of the Bursting Bubble,
It is depressing to read Denby's account of the bursting of the bubble. It is even more so when it is framed against the disintegration of his family after his wife leaves him and he tries to take care of their two boys and maintain a home for them. The experience tears him up.
The American Sucker is also about the people (Henry Blodgett, Sam Waiskal, etc) that he met during the boom and how they let him down, as well as his obsession with the rising market in spite of all that he knew and all that he had studied. There are passages of insight but there is nothing funny about any of them.
It became a "necessity " of sorts for him to profit from the boom, as he wanted to collect a goodly sum to buy his wife's share of their West Side apartment. Greed and desire got the better of him and so he hung on when the world around him was collapsing.
He was aware of all that too. He knew what was happening. He knew how to extricate himself. Still he kept making mistakes, kept up the hope for the turnaround that never came.
Denby is well read, of course. He reflects on Aristotle, Veblen, the Greenspan logic, and economic theory, He asks good questions, fundamental ones. He learned from the experience. We all did.
He is cognizant of the danger of dismissing bad news, how easy it is to become blind to evidence contrary to your own views, or ignore the tell-tale signs of corporate malfeasance.
And so the bubble burst. It was amusing to recall those days, those heady days that come, if you are lucky, once in your lifetime.
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American Sucker by David Denby (Paperback - March 24 2005)
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