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The Money Game and Supermoney
 
The chief strength of these two highly readable books, published in 1968 and 1972, is the sense they provide of the personality of Wall Street in its bull-market glory and in its subsequent fall from grace. Throughout, Adam Smith's insights are funny and cynical and fair. For example, during the buying panic of April 1, 1968, the author found himself with a major portfolio manager who was desperate to throw $42 million at the market:
   
"I never bought any Carbide," Poor Grenville said. "I would never buy a tired old mother like Carbide."
"Well, I didn't buy it either," I said. We stared at each other, and then at a smudged, penciled slip.
"It followed us home," Poor Grenville said. "What the hell. Just go out and get it some warm milk and a blanket."
The next day a New York Times reporter called Poor Grenville to check on the block. Poor Grenville learns fast, and he was ready. "Our fund," he said, "did not follow the mass panic into such highfliers as Burroughs and Control Data. In these times of turmoil, we are seeking value. Union Carbide, for example, whose additions to net plant make it attractive. We believe, after exhaustive research, that the chemicals are ready to turn." Next thing you know, Newsweek was about to quote Poor Grenville on value in these troubled times. Four more funds bought Carbide. Grenville the Statesman.
 
Adam Smith's personal investment preference is for a limited portfolio of small companies with unique characteristics that will permit them above-average compounded earnings growth. Not surprisingly, his approach is based on the advice of Phil Fisher (and on that of Winthrop Knowlton, author of Growth Opportunities in Common Stocks).

Suggestion: Go to Alchemy of Finance