The Book of Investing Wisdom - Peter Krass (4 of 5 Horror Films)

Wisdom is a compilation of short essays by accomplished stock investors.  Each provides interesting ideas about how he or she became successful.  Biographical notes about each character were enlightening.  Two essays were particularly interesting.

The first was about shorting stocks.  Most people think that you can only make money when the market goes up.  This isn't true.  Shorting stocks is the process of making an agreement to buy a stock at a future time when the price is lower.  This difference between the price now and when you'll buy it later is your profit margin.  As this essay points out, in an unstable economic environment it is often much easier to predict a fall in prices than a rise.  The essay outlines the actions of a few of the investing greats during the Great Depression who walked away with millions of dollars on Black Thursday.

The second is about how one can predict the movement of stocks based on cultural shifts.  The author cites such things as the number of horror films in the theater to the length of skirts and hair styles.  The number of horror films reflects the general level of pessimism in the market.  Short skirts and absurd hair styles correlate with more speculative investing activity.