Warren Buffett ＂My Favourite Books＂ #5 Economist John Maynard Keynes

Haynes wrote something about it in something called Essays on Persuasion, he wrote in 1930 about what a more prosperous society would become like. And he actually postulated that in a hundred years, and we're now 87 years old, that there would be four to eight times as much output per capita. Remarkable. But he didn't quite get how it might get distributed. But the idea of more output per capita, which is what the progress is made on productivity, that that should be harmful to society is crazy. I mean, the distribution may be a problem. Haynes wrote about this in 1936, I think it was, in the General Theory or 35, I think it's chapter 12. Great chapter on investing. And he talked about investment and speculation and the propensity of people to speculate and the dangers of it. And worded eloquently, there's always the possibility of — I mean, there's always some speculation, obviously, and there's always some value investors and all of that sort of thing in the market, but there's — when speculation gets rampant and when you're getting what I guess Charlie would call social proof, uh, that it's worked recently, people can get very excited about speculating in markets. And we will have it from time to time in this market. There's nothing more agonizing than to see your neighbor, who you think has an IQ about 30 points below you, getting richer than you are by buying stocks, whether it's internet stocks or whatever, and people succumb to it. And they'll succumb in this economy just as elsewhere. There's also a point which gets to your question. I would say that early on in the development of markets, there's probably a — there's some tendency for them, I think, to be more speculative than markets have been around for a couple hundred years. It has a — markets have a casino characteristic that has a lot of appeal to people, particularly when they see, like I say, people getting rich around them. And those who haven't been through cycles before are probably a little more prone to speculate than people who have experienced the outcome of wild speculation. So I — you know, basically in this country, Ben Graham was — in the book I read in 1949, was preaching investment, and that book continues to sell very well, but if the market gets hot,