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Where Are the Customers' Yachts?: or A Good Hard Look at Wall Street
"Once I picked it up I did not put it down until I finished. . . . What Schwed has done is capture fully-in deceptively clean language-the lunacy at the heart of the investment business."
-- From the Foreword by Michael Lewis, Bestselling author of Liar's Poker ". . . one of the funniest books ever written about Wall Street."
-- Jane Bryant Quinn, The Washington Post "How great to have a reissue of a hilarious classic that proves the more things change the more they stay the same. Only the names have been changed to protect the innocent."
-- Michael Bloomberg "It's amazing how well Schwed's book is holding up after fifty-five years. About the only thing that's changed on Wall Street is that computers have replaced pencils and graph paper. Otherwise, the basics are the same. The investor's need to believe somebody is matched by the financial advisor's need to make a nice living. If one of them has to be disappointed, it's bound to be the former."
-- John Rothchild, Author, A Fool and His Money , Financial Columnist, Time magazine Humorous and entertaining, this book exposes the folly and hypocrisy of Wall Street. The title refers to a story about a visitor to New York who admired the yachts of the bankers and brokers. Naively, he asked where all the customers' yachts were? Of course, none of the customers could afford yachts, even though they dutifully followed the advice of their bankers and brokers. Full of wise contrarian advice and offering a true look at the world of investing, in which brokers get rich while their customers go broke, this book continues to open the eyes of investors to the reality of Wall Street.
-- From the Foreword by Michael Lewis, Bestselling author of Liar's Poker ". . . one of the funniest books ever written about Wall Street."
-- Jane Bryant Quinn, The Washington Post "How great to have a reissue of a hilarious classic that proves the more things change the more they stay the same. Only the names have been changed to protect the innocent."
-- Michael Bloomberg "It's amazing how well Schwed's book is holding up after fifty-five years. About the only thing that's changed on Wall Street is that computers have replaced pencils and graph paper. Otherwise, the basics are the same. The investor's need to believe somebody is matched by the financial advisor's need to make a nice living. If one of them has to be disappointed, it's bound to be the former."
-- John Rothchild, Author, A Fool and His Money , Financial Columnist, Time magazine Humorous and entertaining, this book exposes the folly and hypocrisy of Wall Street. The title refers to a story about a visitor to New York who admired the yachts of the bankers and brokers. Naively, he asked where all the customers' yachts were? Of course, none of the customers could afford yachts, even though they dutifully followed the advice of their bankers and brokers. Full of wise contrarian advice and offering a true look at the world of investing, in which brokers get rich while their customers go broke, this book continues to open the eyes of investors to the reality of Wall Street.
208 pages, Paperback
First published January 1, 1940
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7833 people want to read
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Displaying 1 - 30 of 221 reviews
April 7, 2015
A very easy and pleasurable reading, highly recommended to everyone BEFORE starting investing their money ;) as for a former insider of the financial industry, the book proved to be really entertaining for me, with a good portion of irony and satire. I find it especially amusing that almost nothing has changed in the last 75 years (since the book was written in the 1940), however, this is, most likely, due to the fact that a biological machine, aka homo sapiens sapiens, is primarily lead by emotions (such as greed and fear).
April 3, 2012
Schwed covers some important ground in what may be one of the most important books ever written about Wall Street; the craziness of financial predictions, the desperate nature of stock brokers (today known as "financial advisors), the psychotic tendencies of the investing public, and capitalism - that old hag. While the faces behind Wall Street have changed, the lunacy remains. Anyone with more than $1 invested in the stock market should own this book. FULL DISCLOSURE: As a financial author myself, I'm jealous of the way Fred Schwed Jr. writes. His choice of words are simply unmatched.
January 13, 2016
If you want to read one book on investing / stock markets, take this. Although written 75 years ago, applies very well today. One of the few books on subject that is actually funny and entertaining yet still conveys valuable lessons.
January 19, 2015
Every now and then, it happens that some poor financially illiterate soul gets suckered into the world of speculation. Tempted by the wealth and the yachts of the bankers and the brokers, he sets out on his own quest for riches. One man seeing the same thing as this man (it's usually a man) famously asked the question we all ought to have asked:
Where are the customers' yachts?
Sadly, there is a lot of truth in that comment. "Wall Street", or financial services at large, are inventions made for making their customers rich, but what often happens is that all the wealth stays there. Sadly, the signs of this phenomenon are everywhere. This is something worthy of inspection and criticism - or satire, as the title suggests.
So why should you read something satirical on such a serious topic as investing? Maybe because we ought to ask ourselves whether investing really is all that deadly serious at all. Maybe we should treat it like everything else that we are good at - something that captures our interest and doesn't scare us. Maybe that could help us be more objective and analytic, rather than panic-driven and instinctive. Maybe then we would ask more, think more and get fooled less. And since most of us have a really hard time criticizing our own weaknesses, maybe we should look at someone else instead? I think that is one of the purposes with humor and satire - helping improve ourselves.
Schwed's classic book from 1940 has stood the test of time and still raises lots of questions like the one in the title. The book is by no means a manual for prospective investors, but more like an enjoyable account of all the financial folly that goes on around us. All the answers, comments and habits that just don't get questioned. Both from the customers and the people within the industry itself. It is especially funny to see that almost all of this folly, 73 years later, is still all around us (with the addition of some other new ones). That, if anything, is a lesson one might take away from this book.
It is a wonderfully funny, rather cynical read all the way through, something I think anyone can enjoy. The language is a bit old but not so hard to follow. It is a pretty short book, and so shall also this review be. I would recommend this book to anyone being at least a bit cynical about the Wall Street culture. Which should be pretty much anyone (both on the inside and on the outside).
Where are the customers' yachts?
Sadly, there is a lot of truth in that comment. "Wall Street", or financial services at large, are inventions made for making their customers rich, but what often happens is that all the wealth stays there. Sadly, the signs of this phenomenon are everywhere. This is something worthy of inspection and criticism - or satire, as the title suggests.
So why should you read something satirical on such a serious topic as investing? Maybe because we ought to ask ourselves whether investing really is all that deadly serious at all. Maybe we should treat it like everything else that we are good at - something that captures our interest and doesn't scare us. Maybe that could help us be more objective and analytic, rather than panic-driven and instinctive. Maybe then we would ask more, think more and get fooled less. And since most of us have a really hard time criticizing our own weaknesses, maybe we should look at someone else instead? I think that is one of the purposes with humor and satire - helping improve ourselves.
Schwed's classic book from 1940 has stood the test of time and still raises lots of questions like the one in the title. The book is by no means a manual for prospective investors, but more like an enjoyable account of all the financial folly that goes on around us. All the answers, comments and habits that just don't get questioned. Both from the customers and the people within the industry itself. It is especially funny to see that almost all of this folly, 73 years later, is still all around us (with the addition of some other new ones). That, if anything, is a lesson one might take away from this book.
It is a wonderfully funny, rather cynical read all the way through, something I think anyone can enjoy. The language is a bit old but not so hard to follow. It is a pretty short book, and so shall also this review be. I would recommend this book to anyone being at least a bit cynical about the Wall Street culture. Which should be pretty much anyone (both on the inside and on the outside).
May 4, 2016
It's an insightful and witty read as promised.
The probe into the wall street operations forces you to rethink "passion" for the financial markets. On the pessimistic note, the win-loss situation turns to be coin flips. No speculators will beat the market forever. Market is naturally unpredictable as weather appears. Experts such as, statisticians, partners or even thinkers offer ostentatious profundity, sometimes even self-deceiving.
Now you wonder the ever-glowing heat of quants in the financial markets, computer engineers of the trading systems, and the fawning salaries of business analysts across the industries. Sometimes I really hope Schwed's wrong. With this realistic outlook on those career paths, I'd hardly convince myself to enter those golden-cow farms.
"Speculator's actions are prompted by tape reading, chart reading, statistical analysis, inside information, trading instincts" Another gloomy note that most of my acquaintances fall into this category.
The probe into the wall street operations forces you to rethink "passion" for the financial markets. On the pessimistic note, the win-loss situation turns to be coin flips. No speculators will beat the market forever. Market is naturally unpredictable as weather appears. Experts such as, statisticians, partners or even thinkers offer ostentatious profundity, sometimes even self-deceiving.
Now you wonder the ever-glowing heat of quants in the financial markets, computer engineers of the trading systems, and the fawning salaries of business analysts across the industries. Sometimes I really hope Schwed's wrong. With this realistic outlook on those career paths, I'd hardly convince myself to enter those golden-cow farms.
"Speculator's actions are prompted by tape reading, chart reading, statistical analysis, inside information, trading instincts" Another gloomy note that most of my acquaintances fall into this category.
June 28, 2020
Where Are the Customer’s Yachts? by Fred Schwed Jr. is a classic book and an amusing take on investing which exposes the investment industry for what it is and offers some contrarian advice on how to invest money.
A few points worth noting:
• If you are not a skeptic, you are not an investor.
• One can’t say figures lie. But the numbers used in financial statements could be fiction.
• Bankers lack the ability to do nothing. They crave action.
• The individual investor is still located at the very bottom of the food chain.
• The full impact of losing money cannot be conveyed by words. One has to lose money to understand what a loss is.
• The average investor is incapable of handling his own finances and has high chances of getting duped.
• Speculation is an effort, probably unsuccessful, to turn a little money into a lot.
• Investment is an effort, which should be successful, to prevent a lot of money from becoming a little.
• When the market is skyrocketing, and everyone is scrambling for stocks, take all your stocks and sell them. Take the proceeds and buy conservative bonds. When the bears come to the market, sell out the bonds and buy back the stocks.
A few points worth noting:
• If you are not a skeptic, you are not an investor.
• One can’t say figures lie. But the numbers used in financial statements could be fiction.
• Bankers lack the ability to do nothing. They crave action.
• The individual investor is still located at the very bottom of the food chain.
• The full impact of losing money cannot be conveyed by words. One has to lose money to understand what a loss is.
• The average investor is incapable of handling his own finances and has high chances of getting duped.
• Speculation is an effort, probably unsuccessful, to turn a little money into a lot.
• Investment is an effort, which should be successful, to prevent a lot of money from becoming a little.
• When the market is skyrocketing, and everyone is scrambling for stocks, take all your stocks and sell them. Take the proceeds and buy conservative bonds. When the bears come to the market, sell out the bonds and buy back the stocks.
May 9, 2015
Good book. Seems simple at first but by the end you catch onto the subtle truths underneath the dry wit.
December 23, 2018
I have no idea why someone would ever read it. 170pages of crying how evil wall street is.
February 15, 2024
A fun little book on wall Street, mildly humerous and short
April 12, 2025
I write this tongue in check: this is a great book to read in accompaniment to Thorstein Veblen’s ‘The Theory Of The Leisure Class’. It helps make all or most of Veblen’s social theories of wealth and those who benefit from it in today’s economy. And helps those of us who reject today’s ’Prosperity Gospel’ and ‘Meritocracy’ remember why we did so.
August 13, 2015
I heard about this little book in Alice's Schroeder The Snowball: Warren Buffet and the business of life. As many others reviewers have said before me it is indeed funny to think that now in 2015 when I read this book at the age of 32 it is as relevant as it was when it was first written back in 1940. Good reminder that in whatever has to do with money, the lunacy remains and history repeat itself. In the words of Peter Lynch, "if the only reason you can give when buying a stock is that the sucker is going up then probably you are not on the path to investing success" lol. Main takeaways on wall street and investing: avoid speculation, avoid leverage, avoid following the herd. If you don't you'll end up doing nothing but making your broker happy.
July 28, 2014
Very funny. Old-style humor, probably will go over the head of most modern day readers. Some of it is pretty oblique. His insights are as fresh as ever, and now most new "experts" on the matter (e.g. Kahneman or Michael Lewis) don't feel at all original. Nothing has changed on Wall Street, it's still a casino.
August 16, 2017
Not too useful for someone who already doesn't think highly of wall street (and people in general)
March 14, 2016
All time investment classic.
August 27, 2024
Quotes:
Once again, a bull market had roared so far up, so fast, that money had decayed into a “minor convenience”
At the close of the days business they take all the money and throw it up into the air. Everything that sticks to the ceiling belongs to the clients.
Those who do know, don’t tell all they know, or don’t permit themselves to believe all that they know
It is as though someone had invented an Esperanto for saying nothing in a variety of ways
Now if you do someone the signal honour of asking him a difficult question, you may be assured that you will get a detailed answer. Rarely will it be the most difficult and all answers - “I don’t know”.
The average male likes to sit at breakfast and tell his wife and children what Adolf Hitler is going to do month after next. This is a harmless vanity. But from this is an easy step for him to go downtown and start telling people what United States Steel is going to do month after next. That is liable to lose someone’s life savings for him.
The truly conservative banker reminds me a little of what I once heard one doctor say of another: “He doesn’t know enough medicine to do a patient any harm.”
Like most Wall Streeters, bankers suffer from the inability to do nothing.
The type of customer who habitually sits in a board room is frequently just a gent who loves to chat in masculine company but who doesn’t belong to a club
Here is an idea. Why don’t you kids paste a little strip of paper inside the zippers? Then you could find out whether he ever opens those brief cases.
There are certain things that cannot be adequately explained to a virgin either by words or pictures
To a customer suffering from rhinophobia, having a sizeable cash balance in an account for any length of time is unbearable. Suppose stocks should go way up? They would be left high and dry with nothing but some dirty old money.
Before 1929, no one objected to short sellers except their own families. The families objected to going bankrupt.
Watching is apparently more effective on kettles than on securities
So long as they can attune their material needs and their social dignity to that income they can retain that reasonable safety.
But perhaps the time comes when the family feels they can no longer hold their heads up on the block unless little Paula goes to a fashionable finishing school
Once again, a bull market had roared so far up, so fast, that money had decayed into a “minor convenience”
At the close of the days business they take all the money and throw it up into the air. Everything that sticks to the ceiling belongs to the clients.
Those who do know, don’t tell all they know, or don’t permit themselves to believe all that they know
It is as though someone had invented an Esperanto for saying nothing in a variety of ways
Now if you do someone the signal honour of asking him a difficult question, you may be assured that you will get a detailed answer. Rarely will it be the most difficult and all answers - “I don’t know”.
The average male likes to sit at breakfast and tell his wife and children what Adolf Hitler is going to do month after next. This is a harmless vanity. But from this is an easy step for him to go downtown and start telling people what United States Steel is going to do month after next. That is liable to lose someone’s life savings for him.
The truly conservative banker reminds me a little of what I once heard one doctor say of another: “He doesn’t know enough medicine to do a patient any harm.”
Like most Wall Streeters, bankers suffer from the inability to do nothing.
The type of customer who habitually sits in a board room is frequently just a gent who loves to chat in masculine company but who doesn’t belong to a club
Here is an idea. Why don’t you kids paste a little strip of paper inside the zippers? Then you could find out whether he ever opens those brief cases.
There are certain things that cannot be adequately explained to a virgin either by words or pictures
To a customer suffering from rhinophobia, having a sizeable cash balance in an account for any length of time is unbearable. Suppose stocks should go way up? They would be left high and dry with nothing but some dirty old money.
Before 1929, no one objected to short sellers except their own families. The families objected to going bankrupt.
Watching is apparently more effective on kettles than on securities
So long as they can attune their material needs and their social dignity to that income they can retain that reasonable safety.
But perhaps the time comes when the family feels they can no longer hold their heads up on the block unless little Paula goes to a fashionable finishing school
This entire review has been hidden because of spoilers.
October 28, 2019
This is an older book, written in the 40's I think, but is still relevant today. What was enlightening was that many of the things that bother us about Wall Street today are the same things people were worrying about 80 years ago. No better, no worse, people are people after all. I think it's a hard thing to be that close to that much money and maintain a healthy perspective. Time has proven that. Fortunately, instead of stockbrokers cold calling us today we have mutual funds, fiduciaries, 401K's and IRA's, and brokerage houses where you can control your own trading. These are all advancements that have helped a bunch. I enjoyed this book and I'm glad I'm not trying to prepare for retirement in that era. 3.5 stars.
July 18, 2019
Simple ideas and concepts of investing have been summarised very well.
Chapter 44 (STOCK MARKET NEWSLETTERS) which describes about how people are constantly looking for Buy & Sell recommendations and how it keeps going News letter/ Tip service industry - is a must read. The whole Tip service industry has been explained in most hilarious way.
Chapter 47 (SOME IMPORTANT BASICS), emphasises on 3 important basics viz. compounding, rule of 72 and inflation adjusted returns - is a must read as well.
Chapter 44 (STOCK MARKET NEWSLETTERS) which describes about how people are constantly looking for Buy & Sell recommendations and how it keeps going News letter/ Tip service industry - is a must read. The whole Tip service industry has been explained in most hilarious way.
Chapter 47 (SOME IMPORTANT BASICS), emphasises on 3 important basics viz. compounding, rule of 72 and inflation adjusted returns - is a must read as well.
November 14, 2023
I listened to this on audible because Warren Buffet listed this as one of the most important books he ever read which is a good enough recommendation for me.
It's free on audible for members and very good.
Written in 1940 the advice and information is still relevant today which is pretty amazing.
It's free on audible for members and very good.
Written in 1940 the advice and information is still relevant today which is pretty amazing.
May 20, 2021
I was not expecting a book written about the stock market over 80 years ago to be just as funny and relevant today as it was then, but it absolutely is. It probably doesn't say anything good about human nature that it is still so pertinent. I highly recommend this book to anyone, particularly before reading any other books on the subject.
August 17, 2021
A homurous well aged hard look at the stupidity in what gamblers and shortsighted moralless opportunists call the industry of Investing.
June 21, 2024
A real investing classic, worth the read for anyone working in investing or the broader financial services community. Written in 1940 but over 80 years later it hasn’t lost an ounce of relevance.
July 2, 2024
Light and humorous about the inner workings of Wall Street. Laughed out loud several times.
January 8, 2023
The book is full of irony about the Wallstreet buzz and “investors” who seek quick profits without wanting to put any effort fo analyze and think independently. The key take away is that there is nothing new in Wallstreet no mattwr which epoch or decade you take - boom and bust cycle is the same and with it comes emotions fear and greed which usaualy leads “investors” decision making
P.s. The humour somehow reminded me J. Jerome book “Three men in a boat”
P.s. The humour somehow reminded me J. Jerome book “Three men in a boat”
May 25, 2019
A very easy read highlighting some of the absurdities of Wall Street and 'investing' through short examples. A fun in-between read for anyone looking for a nice pick-me-up on investing, finance, and on the allure of Wall Street.
September 6, 2021
A humourous, straightforward, blunt observation of wall street.
June 27, 2025
I’ve always loved the old Wall Street fable that gives Fred Schwed Jr.’s classic its title. A naive visitor, marveling at the yachts of New York’s bankers and brokers, innocently asks: “Where are the customers’ yachts?” It’s a punchline with a stiletto attached – a reminder that in finance, those selling the advice often get rich at the expense of those taking it. Schwed’s Where Are the Customers’ Yachts? was first published in 1940, but rereading it today, I can’t help chuckling at how little the fundamentals of folly have changed. Sure, the ticker tape is gone and trades zip through cyberspace now, but human nature on Wall Street is still driven by greed, fear, and gullibility in equal measure . As one modern commentator noted, the small investor remains “at the very bottom of the food chain, a speck of plankton afloat in a sea of predators”. Eighty-odd years on, Schwed’s wry mockery of financial hucksterism has only grown more relevant – and more prophetic – with time.
What makes this book endure is not just its razor-sharp wit but its core of timeless truth. Warren Buffett, no stranger to market wisdom, says he read Customers’ Yachts when he was just ten years old in 1940, and it became one of his lifelong favorites. It’s easy to see why. Schwed writes with a dry, folksy humor that would make even a hardened trader smirk, yet beneath the jokes he skewers the perennial illusions of investing. He makes you laugh at the carnival of Wall Street – the fortune-tellers, the get-rich-quick schemers, the “experts” whose expertise magically evaporates when you check your shrinking portfolio – but he also makes you think. Every generation of investors gets seduced by the latest “new era” story, and every generation eventually relearns the humbling lesson that there is no easy money. Schwed knew this deeply. His anecdotes from the Roaring Twenties and Great Depression era carry uncannily familiar echoes of recent headlines. Reading him today, you sometimes feel he’s looking over our shoulder in 2025, shaking his head at the same old madness in a fancy new disguise.
One of my favorite illustrative tales comes from Jason Zweig’s introduction to a modern edition of the book. Zweig recounts a surreal scene from the tail end of the 1990s dot-com bubble: late one evening in Manhattan, a group of young Wall Street hotshots tried to hijack his taxi, shoving a $100 bill at the driver and demanding he kick Zweig out so they wouldn’t have to walk a few blocks. In their exuberance, a hundred bucks had become pocket lint – a trivial price for instant gratification. Zweig was furious at the time, but a few days later he remembered Schwed’s story of a 1929 millionaire commuter train that kept a free bowl of nickels by the door for anyone who needed subway fare. Schwed quipped that the Almighty himself must have taken offense at such hubris, kicking over the Wall Street sandcastle in the crash of ’29 so that the free nickels “disappeared forever.” The parallel hit Zweig: once again a bull market had roared so high, so fast, that money had “decayed into a ‘minor convenience’” for those caught up in the frenzy. And sure enough, only weeks after the $100 taxi bribe incident, the dot-com Nasdaq collapsed – wiping out roughly three-quarters of its value in the brutal reckoning that followed. Or as Zweig dryly put it, so much for waving $100 bills around like used Kleenex.
That anecdote might as well serve as an omen for our own era’s excesses. In the past few years, we’ve witnessed speculative manias that make 1929’s nickel bowl or 2000’s taxi bribes seem quaint. Think of the cryptocurrency frenzy, when people were mortgaging their homes to buy digital coins named after dogs and cartoon memes. At the peak of this mania, new tokens would skyrocket in hours purely on hype, and fortunes ballooned on paper. But when the bubble inevitably burst, reality reasserted itself with a vengeance: more than $2 trillion in largely speculative crypto market value evaporated in 2022, and millions of investors (especially latecomers to the party) saw their “safe bet to the moon” come crashing back to Earth. Or consider the meme-stock surges, like GameStop’s rollercoaster ride, where for a brief, heady moment it seemed like anyone could turn a few hundred dollars into a fortune by YOLO-ing into the trend of the week. For a time, the lines outside brokerage offices (or more aptly, the trending tickers on Robinhood) looked like a casino paying out every pull of the lever. Yet, just as Schwed would predict, most of those chasing a quick buck were left holding the bag when the momentum reversed. It’s eerily reminiscent of how Schwed described the popular darlings of his day: in every era “what are thought to be the best [investments] are in truth only the most popular – the most active, the most talked of, the most boosted, and consequently, the highest in price at that time,” he wrote, likening hot stocks to fashionable fads. Replace “radio stocks” or “automobile shares” of 1929 with NFTs, SPACs or crypto tokens of 2021, and the lesson reads the same. The objects of speculation change – today’s electric-vehicle startup that soars to a $150+ billion valuation without a dime of revenue  is yesterday’s railroad stock frenzy – but the pattern of speculative excess is a constant. In Schwed’s words, it’s a “pathetic fallacy” we keep committing, mistaking popularity for true value. Eventually, valuation gravity wins out over the storytelling. As one market strategist commented during the recent tech boom, such runaway prices were “another sign that froth is creeping back into the marketplace” – lots of liquidity sloshing around long after the good sense has left the room. And as every bubble from Holland’s tulips to Silicon Valley’s unicorns has shown, froth can only pile up so high before it blows away, often taking a lot of innocent money with it.
So what is the antidote? Schwed offers it in the same breath as his satire. Amid the anecdotes of brokers and customers dancing their perennial two-step, he slips in a definition of real investing that is as wise as it is witty: “Speculation is an effort, probably unsuccessful, to turn a little money into a lot. Investment is an effort, which should be successful, to prevent a lot of money from becoming a little.”  It’s a line so good that I’ve made it a mantra. Think about that: the true aim of investing is capital preservation and steady growth – protecting your pile from shrinking – not doubling your net worth overnight on some hot tip. Schwed reminds us that people who brag about getting rich quick are usually just lucky gamblers riding a streak, and those inevitably end. The real investors are often the unassuming folks trying to not lose what they worked so hard to save. This humble, cautious approach is the polar opposite of the feverish story-driven speculation that Schwed lampoons. And yet, time and again, we see speculators insist on calling themselves “investors,” as if a euphemism could change the nature of what they’re doing . It doesn’t – chasing “a little money into a lot” is still a wildly different game than the patient, disciplined effort to keep “a lot of money from becoming a little.” Schwed’s humor lightens the hard truth, but he doesn’t let us off the hook: if you’re not skeptical, if you’re not vigilant, you will become the sucker at the table. Or as Jason Zweig distilled it, “If you are not a skeptic, you are not an investor.” 
Reading Where Are the Customers’ Yachts? today feels like hearing a genial but pointed lecture from a very wise (and very funny) old friend. Schwed’s tone is never scolding; it’s empathetic, almost gentle in its satire – the tone of a man who’s seen one too many get-rich-quick fantasies end in tears and would like to save the next generation some pain. Bill Gates has noted how he prefers authors who can be “approachable and reflective,” and Schwed achieves that in spades. You can imagine Schwed – or perhaps a present-day sage like Buffett – chuckling on a stage in Sun Valley, telling these cautionary tales with a twinkle in his eye. The laughter in the room would be real, but so would the uncomfortable shifting in seats as we recognize ourselves in the stories. In the end, Schwed’s message is a profoundly important one: markets may evolve, but human nature doesn’t, and the surest way to lose a fortune is to believe the people who promise you’ll quickly double it. True investing isn’t a thrill ride or a fairy tale – it’s a slow, boring discipline of protecting and steadily growing one’s capital. That may not be a story flashy enough to brag about at a cocktail party, but as Schwed’s timeless book shows, it’s the story that ends with the customer affording a yacht of their own. And if you can internalize even a fraction of Schwed’s wisdom (while enjoying his endless supply of dry one-liners), you’ll be a better investor – or at least a poorer victim – for it. Where Are the Customers’ Yachts? may have been written generations ago, but its insight and humor shine a beacon of common sense through every market mania and myth we face today. It turns out that the smartest voice in the room might just be the one cracking jokes from 1940, reminding us that sound investing is ultimately about not turning a large fortune into a small one. Schwed’s little masterpiece provokes, teaches, and yes, cracks us up – all at once – and that is a combination as valuable now as ever.
What makes this book endure is not just its razor-sharp wit but its core of timeless truth. Warren Buffett, no stranger to market wisdom, says he read Customers’ Yachts when he was just ten years old in 1940, and it became one of his lifelong favorites. It’s easy to see why. Schwed writes with a dry, folksy humor that would make even a hardened trader smirk, yet beneath the jokes he skewers the perennial illusions of investing. He makes you laugh at the carnival of Wall Street – the fortune-tellers, the get-rich-quick schemers, the “experts” whose expertise magically evaporates when you check your shrinking portfolio – but he also makes you think. Every generation of investors gets seduced by the latest “new era” story, and every generation eventually relearns the humbling lesson that there is no easy money. Schwed knew this deeply. His anecdotes from the Roaring Twenties and Great Depression era carry uncannily familiar echoes of recent headlines. Reading him today, you sometimes feel he’s looking over our shoulder in 2025, shaking his head at the same old madness in a fancy new disguise.
One of my favorite illustrative tales comes from Jason Zweig’s introduction to a modern edition of the book. Zweig recounts a surreal scene from the tail end of the 1990s dot-com bubble: late one evening in Manhattan, a group of young Wall Street hotshots tried to hijack his taxi, shoving a $100 bill at the driver and demanding he kick Zweig out so they wouldn’t have to walk a few blocks. In their exuberance, a hundred bucks had become pocket lint – a trivial price for instant gratification. Zweig was furious at the time, but a few days later he remembered Schwed’s story of a 1929 millionaire commuter train that kept a free bowl of nickels by the door for anyone who needed subway fare. Schwed quipped that the Almighty himself must have taken offense at such hubris, kicking over the Wall Street sandcastle in the crash of ’29 so that the free nickels “disappeared forever.” The parallel hit Zweig: once again a bull market had roared so high, so fast, that money had “decayed into a ‘minor convenience’” for those caught up in the frenzy. And sure enough, only weeks after the $100 taxi bribe incident, the dot-com Nasdaq collapsed – wiping out roughly three-quarters of its value in the brutal reckoning that followed. Or as Zweig dryly put it, so much for waving $100 bills around like used Kleenex.
That anecdote might as well serve as an omen for our own era’s excesses. In the past few years, we’ve witnessed speculative manias that make 1929’s nickel bowl or 2000’s taxi bribes seem quaint. Think of the cryptocurrency frenzy, when people were mortgaging their homes to buy digital coins named after dogs and cartoon memes. At the peak of this mania, new tokens would skyrocket in hours purely on hype, and fortunes ballooned on paper. But when the bubble inevitably burst, reality reasserted itself with a vengeance: more than $2 trillion in largely speculative crypto market value evaporated in 2022, and millions of investors (especially latecomers to the party) saw their “safe bet to the moon” come crashing back to Earth. Or consider the meme-stock surges, like GameStop’s rollercoaster ride, where for a brief, heady moment it seemed like anyone could turn a few hundred dollars into a fortune by YOLO-ing into the trend of the week. For a time, the lines outside brokerage offices (or more aptly, the trending tickers on Robinhood) looked like a casino paying out every pull of the lever. Yet, just as Schwed would predict, most of those chasing a quick buck were left holding the bag when the momentum reversed. It’s eerily reminiscent of how Schwed described the popular darlings of his day: in every era “what are thought to be the best [investments] are in truth only the most popular – the most active, the most talked of, the most boosted, and consequently, the highest in price at that time,” he wrote, likening hot stocks to fashionable fads. Replace “radio stocks” or “automobile shares” of 1929 with NFTs, SPACs or crypto tokens of 2021, and the lesson reads the same. The objects of speculation change – today’s electric-vehicle startup that soars to a $150+ billion valuation without a dime of revenue  is yesterday’s railroad stock frenzy – but the pattern of speculative excess is a constant. In Schwed’s words, it’s a “pathetic fallacy” we keep committing, mistaking popularity for true value. Eventually, valuation gravity wins out over the storytelling. As one market strategist commented during the recent tech boom, such runaway prices were “another sign that froth is creeping back into the marketplace” – lots of liquidity sloshing around long after the good sense has left the room. And as every bubble from Holland’s tulips to Silicon Valley’s unicorns has shown, froth can only pile up so high before it blows away, often taking a lot of innocent money with it.
So what is the antidote? Schwed offers it in the same breath as his satire. Amid the anecdotes of brokers and customers dancing their perennial two-step, he slips in a definition of real investing that is as wise as it is witty: “Speculation is an effort, probably unsuccessful, to turn a little money into a lot. Investment is an effort, which should be successful, to prevent a lot of money from becoming a little.”  It’s a line so good that I’ve made it a mantra. Think about that: the true aim of investing is capital preservation and steady growth – protecting your pile from shrinking – not doubling your net worth overnight on some hot tip. Schwed reminds us that people who brag about getting rich quick are usually just lucky gamblers riding a streak, and those inevitably end. The real investors are often the unassuming folks trying to not lose what they worked so hard to save. This humble, cautious approach is the polar opposite of the feverish story-driven speculation that Schwed lampoons. And yet, time and again, we see speculators insist on calling themselves “investors,” as if a euphemism could change the nature of what they’re doing . It doesn’t – chasing “a little money into a lot” is still a wildly different game than the patient, disciplined effort to keep “a lot of money from becoming a little.” Schwed’s humor lightens the hard truth, but he doesn’t let us off the hook: if you’re not skeptical, if you’re not vigilant, you will become the sucker at the table. Or as Jason Zweig distilled it, “If you are not a skeptic, you are not an investor.” 
Reading Where Are the Customers’ Yachts? today feels like hearing a genial but pointed lecture from a very wise (and very funny) old friend. Schwed’s tone is never scolding; it’s empathetic, almost gentle in its satire – the tone of a man who’s seen one too many get-rich-quick fantasies end in tears and would like to save the next generation some pain. Bill Gates has noted how he prefers authors who can be “approachable and reflective,” and Schwed achieves that in spades. You can imagine Schwed – or perhaps a present-day sage like Buffett – chuckling on a stage in Sun Valley, telling these cautionary tales with a twinkle in his eye. The laughter in the room would be real, but so would the uncomfortable shifting in seats as we recognize ourselves in the stories. In the end, Schwed’s message is a profoundly important one: markets may evolve, but human nature doesn’t, and the surest way to lose a fortune is to believe the people who promise you’ll quickly double it. True investing isn’t a thrill ride or a fairy tale – it’s a slow, boring discipline of protecting and steadily growing one’s capital. That may not be a story flashy enough to brag about at a cocktail party, but as Schwed’s timeless book shows, it’s the story that ends with the customer affording a yacht of their own. And if you can internalize even a fraction of Schwed’s wisdom (while enjoying his endless supply of dry one-liners), you’ll be a better investor – or at least a poorer victim – for it. Where Are the Customers’ Yachts? may have been written generations ago, but its insight and humor shine a beacon of common sense through every market mania and myth we face today. It turns out that the smartest voice in the room might just be the one cracking jokes from 1940, reminding us that sound investing is ultimately about not turning a large fortune into a small one. Schwed’s little masterpiece provokes, teaches, and yes, cracks us up – all at once – and that is a combination as valuable now as ever.
This entire review has been hidden because of spoilers.
August 19, 2024
A quick fun read about Wall Street. Most probably you won't learn anything new but will have a good laugh 😀
November 24, 2019
A fine re-issue of a quirky, funny and brutalizing book. First published in 1940, the shadows of both war and the Great Depression darken the text. But the humour - including the sexist humour we would expect of this time - is an effective propulsion for the argument.
What makes it important after all these years is the scale of the irrationality, unpredictability, ignorance and foolishness that Schwed locates in the financial system. He logs a catalogue of silly behaviours and stupid decisions.
The message of the book is a powerful one. Wall Street focuses on the next minute, the next hour, this day. For customers to own yachts, long term decisions are required that are careful and cautious. Also - as Schwed acknowledges - to make money is is necessary to have in the first place, through family wealth, or marrying into it. Making a good living? It was tough when Schwed wrote his book. It is tough now. But Wall Street continues to think about the next minute, the next hour, this day.
What makes it important after all these years is the scale of the irrationality, unpredictability, ignorance and foolishness that Schwed locates in the financial system. He logs a catalogue of silly behaviours and stupid decisions.
The message of the book is a powerful one. Wall Street focuses on the next minute, the next hour, this day. For customers to own yachts, long term decisions are required that are careful and cautious. Also - as Schwed acknowledges - to make money is is necessary to have in the first place, through family wealth, or marrying into it. Making a good living? It was tough when Schwed wrote his book. It is tough now. But Wall Street continues to think about the next minute, the next hour, this day.
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