The Money Game By Adam Smith

Key Concepts & Takeaways

• The Market as a Game: Drawing on John Maynard Keynes, Goodman argues that investing is a game where money is simply the way we keep score. For true players, the excitement of the chase is often more seductive than the wealth itself.
• "Know Thyself": Perhaps the book's most famous Irregular Rule: "If you don’t know who you are, this is an expensive place to find out". Success requires understanding your own emotional "twitches" and prejudices before the market exposes them for you.
• The Psychology of Greed and Fear: Goodman highlights these as the two dominant forces in the market. He explains how "bubbles" start with rational ideas but are carried to extremes by a herd mentality that few have the discipline to resist.
• The Stock Doesn't Know You Own It: A vital lesson in emotional detachment. Investors often project their identities onto their holdings, but Goodman reminds readers that a stock is just a piece of paper that lacks any reciprocal feeling for its owner.
• Concentration Over Diversification: Challenging conventional wisdom, the book suggests that if you truly want to "win," you should concentrate on a few stocks you understand deeply rather than spreading yourself thin across a sea of average returns.
• The Illusion of Systems: Goodman is famously skeptical of technical analysis and complex "predictive" formulas. He argues that math is often used to substitute for experience, and no system works in all market cycles because human behavior is inherently unpredictable.