Our world seems to be gradually slipping into chaos: volatile stock markets, SARS and flus, financial crisis, nuclear threat, population explosion, and the recent Brexit and the United States’ exclusive stance… How should we, as insignificant individuals, face this increasingly restless world? This question is the reason I duly bought the book Wealth, War and Wisdom.
This book is written by Barton Biggs, the legendary Wall Street analyst. Born in the United States during the Great Depression, Biggs came from a New York investment banker family. He debuted at Morgan Stanley and was a partner at the firm for more than three decades. After the turn of the century, Briggs, who was in his seventies by then, established the US$1.5 billion dollar hedge fund, Traxis Partners, with a return rate that was three times above the industry average.
When I started reading this book, I was hoping to find a way to preserve my treasure in this chaotic world. But as I made further progress, I found that it is actually a history book of a kind. The writing of Briggs is very creative. He presents the history the nation and the history of investment before, during and after the Second World War. Rather than describing it as a book of investment tips, I would say this is a history book with financial investment as a reference.
After finishing reading the book, what I realized is that “the wisdom of many” triumphs over that of individual elites. With solid facts and detailed statistics, Briggs proves that the public, which is seen as “irrational” and “mob-like”, can reach a more accurate verdict with its large size and independence, compared to those elites and scholars like strategists, economists and politicians. The collective consciousness of the public can display irrational volatility over a short period of time, however, this collective consciousness (or sentiment) is extremely accurate in the long term when it comes to predicting, judging and responding to global trends.
Of course, although this book is mainly about analyzing history, it also contains quite a few suggestions on how people can preserve their assets and fortune for themselves (and their descendants) in this lawless era. For example, the investments that have the highest return in the long term are stocks, while the most reliable asset is real estate, be it commercial or residential or even agricultural real estate (please beware that we are talking about land here, not houses. Nobody was ever compensated for the loss of housing during wars, but people can always reclaim their land, except in some particular cases). Moreover, if you are a religious or ethnic minority, remember to be vigilant. Regardless of your financial or political status, a contingency plan is crucial.
I fell into deep contemplation after finishing this book. It would be marvellous if China had a book like this. Since the late Qing Dynasty and the Xinhai Revolution, there have been chaotic eras of warlord conflicts, which were followed by the Second Sino-Japanese War, the Chinese Civil War and the split between Mainland China and Taiwan. Then there were the political storms in the mainland, proceded by the Chinese Economic Reform in 1978 until the rise of China today.
In Taiwan, people went through an era of martial law and eventually became one of the four Asian Tigers with its economic boom, later facing economic struggles after democratization.
How many stories are there that from these events that would allow us to understand this history and learn lessons from it?