Identity And Anxiety

(Mr.Market's Lessons From "The Money Game")

“The Money Game” was written when there was a young ebullient generation changing the country, pushing for social change, challenging cultural, political and gender roles, and building new growth tech businesses.

The country was about to usher in a law-and-order presidential administration, powered by a wave of populism based on an appeal to the “forgotten men” of the country.

The previous administration which had focused on the expansion of a social safety-net while it was also mired in an endless war abroad and figuring out what to do about Russia and China. 


The country was undergoing an identity crisis. The Silents were angry, the post-war Veterans were mystified by the changes in the national and global order of things and the youngsters, the Baby Boomers, were discovering themselves. Everybody had their version of "Who Am I?" to ask themselves.

So many of our problems in life are wrapped up in bad answers to this question. Left unanswered, this not only hurts us in life, but also in the markets.

An interesting chapter in “The Money Game” (1968), "Identity and Anxiety", written by “Adam Smith” tackled this question

"Adam Smith" was the pseudonym for Mr. George Goodman. Goodman, who passed away in 2013, was one of two candidates desired by Benjamin Graham to revise “The Intelligent Investor”. The other was a successful little known Graham protege named Warren Buffett. Goodman met and then wrote about Buffett in a follow-up book, “Supermoney” (1972).

Goodman tackled the question about that sense of self like no one else who wrote about the ordinarily a dry subject of investments.

“The strongest emotions in the marketplace are greed and fear. In rising markets, you can almost feel the greed tide begin. Usually it takes from six months to a year after the last market bottom even to get started. The greed itch begins when you see stocks move that you don’t own.

“Then friends of yours have a stock that has doubled; or, if you have one that has doubled, they have one that has tripled. This is what produces bull market tops. Obviously no one rationally would want to buy a the top, and yet enough people do to produce a top. How do they manage it? It must be that element of contagion from Le Bon’s crowd, from the unwillingness to be out of step….

“The same thing happens in reverse. When stocks start down, the tendency is to wait until they come back a little before lightening up. They head down further, and the idea that you have made a mistake, that you have been betrayed by your own judgement, can be so paralyzing that you wait a little longer. Finally faith evaporates completely….

“The only real protection against all the vagaries of identity-playing, and against the final role of being part of the crowd when it stampedes, is to have an identity so firm it is not influenced by all the brouhaha in the marketplace….

“A stock is, for all practical purposes, a piece of paper….Most likely you will never see it…. The most important thing to realize is simplistic: The stock doesn’t know you own it. All those marvelous things, or those terrible things, that you feel about a stock…are unreciprocated by the stock or the group of stocks…unreciprocated love can turn into masochism, narcissism, or even worse, market losses and unreciprocated hate

“If you know that the stock doesn’t know you own it, you are ahead of the game. You are ahead because you can change your mind and your actions without regard to what you did or thought yesterday….”

“Mr. Smith” was right and nothing has changed. Whether it’s 1968, 2018 or 2068, Mr. Market still wrestles with the same truths about the human condition. Introspection and self-knowledge goes hand-in-hand with investment planning and trading strategies.

To know who we are on the inside helps us deal with what’s happening on the outside — and that includes the markets.

Originally published at on January 9, 2017.