Feb 19 2008
Benjamin Graham on Hot Tips
Here’s a little tale passed down from Guru Benjamin Graham.
“Let me tell you the story of the oil prospector who met St. Peter at the Pearly Gates. When told his occupation, St. Peter said, “Oh, I’m really sorry. You seem to meet all the tests to get into heaven. But we’ve got a terrible problem. See that pen over there? That’s where we keep the oil prospectors waiting to get into heaven. And it’s filled—we haven’t got room for even one more.” The oil prospector thought for a minute and said, “Would you mind if I just said four words to those folks?” “I can’t see any harm in that,” said St. Pete. So the old-timer cupped his hands and yelled out, “Oil discovered in hell!” Immediately, the oil prospectors wrenched the lock off the door of the pen and out they flew, flapping their wings as hard as they could for the lower regions. “You know, that’s a pretty good trick,” St. Pete said. “Move in. The place is yours. You’ve got plenty of room.” The old fellow scratched his head and said, “No. If you don’t mind, I think I’ll go along with the rest of ’em. There may be some truth to that rumor after all.”
Every age has its hot money herd whose obsession with the latest fad is their own downfall. Reading this I was reminded of the radio interview we did with the infamous Casey Serin of the now closed Iamfacingforeclosure.com website, who since went on to his 15 minutes in USA Today, on various news stories, and investment shows such as Rich Dad Poor Dad. Casey, no matter what we told him in October 2006, that the fundamentals of credit bubble finance would bring down housing, he remained convinced that if he just did it a little different, he’d be rich
