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Worthwhile Reading: “Keynes’s Way to Wealth”

Many think of John Maynard Keynes as the father of macroeconomics. What may surprise, is Keynes’s success as in investor for himself, family and friends, and institutions.

A new book by journalist and author John F. Wasik, Keynes’s Way to Wealth, Timeless Investment Lessons from the Great Economist, describes the events that led to Keynes the investor.

Keynes’s economic and investment theories have influenced many well-known economists and investors, including: Warren Buffett, George Soros, Yale’s David Swensen, Benjamin Graham, Jeremy Grantham; winner of the 2013 Nobel Prize in Economics Robert Shiller, and Jack Bogle, Founder and former Chair of Vanguard – who penned the book’s forward.

The book is a romp, describing the evolution of Keynes’s work and theories of investing, all playing out in the laboratory of the markets after World War I until his death in 1946.  Keynes “loved to gamble, speculate, try out theories and probabilities in the market,” Wasik told the crowd at a lecture about the book recently. Keynes was a proponent of “open, transparent, regulated markets.” Through decades of investment trial and error, Keynes arrived at theories similar to the theories of Graham & Dodd, valuing companies as enterprises, looking for value. Keynes coined the phrase “Animal Spirits” describing behavior in economics and investing.

Keynes worked hard, but he was definitely not all work and no play — Keynes believed, Wasik said, that “the object of investing is to ensure prosperity, not to become obsessed with making money.” An art collector, Keynes loved music and books, and he was a member of the Bloomsbury Group. Near the end of his life, asked if he had any regrets, Keynes is said to have wished he had enjoyed life more, and drunk more Champagne!

Worthwhile reading. – Kate McBride, 1/23/14