This book was written in 1976 (my edition) by a guy believed to be Harvard and Oxford trained George J. W. Goodman who went under the pseudonym, Adam Smith.

Here are some of the notes I made from the book:

The book is about image and reality and identity and anxiety and money.

Game theory is an attempt to quantify and work through the actions of players in a game, to measure their options continuously.

Recognize an instinct.

Try to guess better than the crowd how the crowd will behave.

No man is so harmlessly occupied as when he is making money. This is a money game and money is the way we keep score. The real object of the game is not money, it is the playing of the game itself.

If there is a way to keep score, you will play.

You have to know yourself. A man who knows himself can step outside himself and watch his own reactions like an observer.

You are a bunch of emotions, prejudices and twitches.

If you don’t know who you are, this is an expensive place to find out.

All the charts, technical analysis are the statisticians attempts to describe an emotional state.

Study mass psychology and the marketplace.

There is always stock somewhere that is going up more than the one you just bought.

Markets can mean different things to different people. They present a kind of stage on which roles can be played.

The strongest emotions in the market are greed and fear.

The greed itch begins when you see stocks move that you don’t own.

It’s quite amazing how time horizons and money goals can change.

Know who you are and what you’re doing.

The market has a way of inducing humility in even very successful students.

You need to step outside yourself and see yourself objectively.

The stock doesn’t know you own it.

Start out with no preconceived notions. Every day is a new day and a new set of continuously measurable options.

Being in the right place at the right time is part of the game.

Nothing works all the time and in all kinds of markets.

Repeated shocks will give you anxiety, and anxiety is the enemy of identity, and without identity there is no serenity.

If you really love playing the game, any action is better than inaction, and sometimes inaction is the proper course, if it has been taken after measuring all the measurable options.

If a decision is made not to make a decision, that is just as much a decision as a decision which initiates action.

The more you grow, the harder it is to keep the percentage of growth constant or increasing, because the base gets so big.

There are, at any one moment, only a few stocks that have a maximum potential, and you are not smart enough to be able to follow more than a handful of stocks at a time.

Find smart people, because if you can do that, you can forget a lot of the other rules.

Where there is no skepticism, there is almost no one left to sell to.

The market will not go up unless it goes up, nor will it go down unless it goes down, and it will stay the same unless it does either.

Can the footprints of price movements really predict the future? If truly and universally they could, they soon would not.

The long term is a series of short terms and in the long run we are all dead.

When everyone knows something, then no one knows anything.

Prices have no memory, and yesterday has nothing to do with tomorrow. Every day starts out 50-50. Yesterday’s prices discounted everything yesterday.

The past history of the series of stock price changes cannot be used to predict the future in any meaningful way. The future path of the price level or a security is no more predictable than the path of a series of cumulated random numbers.

In the long run future earnings influence present value and in the short run the dominant factor is the temper of the crowd.

There is not a company anywhere whose income statement and profits cannot be changed, by the management and the accountants, by counting things one way instead of another.

Truth will not make it go up, but the crowd’s general feeling about it just might.

The market does not follow logic, it follows mass psychology.

With all the analysists, research, statistics and all the computers, it is still possible to be 51% wrong, and you can do better than that by flipping a coin.

Anxiety builds up when the market drops and especially when people talk about resistance levels and it plunges through them.

When prices go up enough, everybody believes something, even if it is only that everybody else is just about to believe.

Value is not only inherent in the stock; to do you any good, it has to be value that is appreciated by others.

If you are in the right thing at the wrong time, you may be right but have a long wait; at least you are better off than coming late to the party.

When there’s no game, don’t play, but the Propensity is very strong among those who have been playing.

If you want to find truth in the marketplace you must listen to all sides.

Governments are now held responsible for the welfare of the people. The aspirations of the people can outrun their ability to pay for them.

If governments have a choice between attempting full employment and defending their currency’s, they will nearly always pick jobs over the worth of the currency. Currencies do not vote.

Markets are only a tiny facet of society, but being made by mass psychology, they are a good litmus paper for what is going on. Markets only work when they believe, and this confidence is based on the idea that men can manage their affairs rationally.

All purposeful money-making impulses come from the thousands of years of economic scarcity. But wealth is not pursued solely as an answer to scarcity.

The purposive investor seeks purposiveness. It means we are more concerned with the remote future results of our actions than with their own quality or their immediate effects on our own environment. The purposive man is always trying to secure a spurious and delusive immortality for his acts by pushing his interest in them forward into time.

You can’t take it with you.

We shall once more value ends above means and prefer the good to the useful.

Money-motive at its true value: The love of money as a possession - as distinguished from the love of money as a means to the enjoyments and realities of life- will be recognised for what it is, a somewhat disgusting morbidity, one of those semi-criminal, semi-pathological propensities which one hands over with a shudder to the specialists in mental disease.


I found this book hugely important and consider it a must read before you get into this game of money. It is hugely important to figure out the reasons why you want money, how much you feel you need and desire money and how you will play the game of getting money.

This book is a good start and an important foundation in how to go about thinking about money itself and human psychology for the reasons why we want money.

I typically tended to agree with the authors observations and off the top of my head, I cannot think of anything to contend.

As much as we like to believe that things are based on the intrinsic value of something, it’s actually based on the value other individuals place on that something. The net asset value, for example, is very important, but we must realise that many other people are not looking at net asset values. They go with the crowd and how they feel at the time. They follow the narrative and not the arithmetic. However, these volatile swings are very useful to the speculator that wishes to generate the money he or she believes they need to live the life they want. We all have a different amount that we feel we need and want, but we find when we reach that amount and finish the game, a new one turns up in its place.

One thing that this book made me think about was the importance of knowing yourself. If you can’t know yourself, how can you understand others? And if you can’t understand others, you are pretty limited in thinking about ‘The Money Game’.

Hope you enjoyed,

Alan