Skip to main content
The Analyst

December 2024

FLIP THROUGH The Analyst



Featured Stories

Book Review

Trailblazers, Heroes, and Crooks: Stories to Make You a Smarter Investor by Stephen Foerster

Rossa O’Reilly, CFA

BookReviewThe Prussian statesman and unifier of Germany, Otto von Bismarck, reportedly said, “Any fool can learn from his mistakes. A wise man learns from the mistakes of others.” Stephen Foerster’s book, Trailblazers, Heroes, and Crooks: Stories to Make You a Smarter Investor, is rich in cautionary tales of the mistakes of others, told with thoughtful insights and accurate details. It should make a profound impression on today’s readers and bring back pointed memories to those who lived through the events recounted. 

Thought-provoking and entertaining 

The book aims to show how we can control our emotions and biases to become smarter investors and develop a sounder investment philosophy based on the trials, tribulations, missteps, and victories of the investors who came before us. Its stories cover 2,000 years and take place all over the world, including the Roman Empire in the second century BCE (Dictator Quintus Fabius’ concept of masterly inactivity in the Second Punic War), Venice in 1172 (Doge Vitale Michiel’s clever borrowing scheme to fund the city-state’s investments), the UK in 1720 (the Blank-Cheque Swindle), Switzerland and France in 1759 (novel investment strategies in tontines and annuities), Massachusetts in 1780 (a revolutionary innovation to fight inflation), New York City in 1907, 1987, and 1999 (stock market crashes and bubbles), New Jersey in 1964 (the Great Salad Oil Swindle), Indonesia in 1996 (the Bre-X gold fraud), Budapest in 2021 (footballer Christiano Ronaldo’s press conference involving Coca-Cola bottles) among other times and places. 

Seven trailblazers are featured: Harry Markowitz (developer of the Modern Portfolio Theory), William Sharpe (creator of the capital asset pricing model), Jack Bogle (founder of the Vanguard Group and creator of low-cost index funds), Charley Ellis (dubbed “the Wisest Man on Wall Street” by Money magazine), Jacob Bouthillier Beaumont (exploiter of opportunities in tontines and annuities), Lawrence Sperry (the early 20th century inventor of autopilot functions), Doge Vitale Michiel of twelfth century Venice, and legislators for the Commonwealth of Massachusetts in the eighteenth century. 

Eight heroes are profiled: Quintus Fabius, Muhammad Ali, Bobby Bonilla (former New York Mets player), Dennis Gilbert (Bonilla’s agent), Harry Markopolos (discoverer of the Bernie Madoff fraud), Hetty Green (legendary value investor), the legendary Warren Buffett, and Karsten Mahlmann (chair of the Chicago Board of Trade), along with six crooks: Ponzi-schemer Bernie Madoff, Sam Bankman-Fried (perpetrator of the FTX Trading crypto-exchange fraud), John Blunt (a director of the South Sea Company), Tino De Angelis (of the Great Salad Oil Swindle), and Mike de Guzman (the geologist at the heart of the Bre-X scandal). 

The lessons to be learned are that it pays to be diversified, to have a strong foundation of stocks and bonds, and to emulate the strategies and approaches of those worthy and accomplished investors Stephen Foerster calls heroes. Importantly, investors need to be mindful that unscrupulous participants are trying to play off our emotions and biases. We must beware of false promises. 

Novices and experienced investors alike will find Stephen Foerster’s book both thought-provoking and entertaining. A great stocking-stuffer for the holiday season! 

Trailblazers, Heroes, and Crooks: Stories to Make You a Smarter Investor, by Stephen Foerster, was published in 2024 by John Wiley and Sons Inc., Hoboken, New Jersey, USA. 

Rossa O’Reilly, CFA, is a Past Chair of CFA Institute, Past President of CFA Society Toronto, and former Managing Director of Institutional Equities at CIBC World Markets Inc. 

From the Society

Book Review

Trailblazers, Heroes, and Crooks: Stories to Make You a Smarter Investor by Stephen Foerster

Rossa O’Reilly, CFA

BookReviewThe Prussian statesman and unifier of Germany, Otto von Bismarck, reportedly said, “Any fool can learn from his mistakes. A wise man learns from the mistakes of others.” Stephen Foerster’s book, Trailblazers, Heroes, and Crooks: Stories to Make You a Smarter Investor, is rich in cautionary tales of the mistakes of others, told with thoughtful insights and accurate details. It should make a profound impression on today’s readers and bring back pointed memories to those who lived through the events recounted. 

Thought-provoking and entertaining 

The book aims to show how we can control our emotions and biases to become smarter investors and develop a sounder investment philosophy based on the trials, tribulations, missteps, and victories of the investors who came before us. Its stories cover 2,000 years and take place all over the world, including the Roman Empire in the second century BCE (Dictator Quintus Fabius’ concept of masterly inactivity in the Second Punic War), Venice in 1172 (Doge Vitale Michiel’s clever borrowing scheme to fund the city-state’s investments), the UK in 1720 (the Blank-Cheque Swindle), Switzerland and France in 1759 (novel investment strategies in tontines and annuities), Massachusetts in 1780 (a revolutionary innovation to fight inflation), New York City in 1907, 1987, and 1999 (stock market crashes and bubbles), New Jersey in 1964 (the Great Salad Oil Swindle), Indonesia in 1996 (the Bre-X gold fraud), Budapest in 2021 (footballer Christiano Ronaldo’s press conference involving Coca-Cola bottles) among other times and places. 

Seven trailblazers are featured: Harry Markowitz (developer of the Modern Portfolio Theory), William Sharpe (creator of the capital asset pricing model), Jack Bogle (founder of the Vanguard Group and creator of low-cost index funds), Charley Ellis (dubbed “the Wisest Man on Wall Street” by Money magazine), Jacob Bouthillier Beaumont (exploiter of opportunities in tontines and annuities), Lawrence Sperry (the early 20th century inventor of autopilot functions), Doge Vitale Michiel of twelfth century Venice, and legislators for the Commonwealth of Massachusetts in the eighteenth century. 

Eight heroes are profiled: Quintus Fabius, Muhammad Ali, Bobby Bonilla (former New York Mets player), Dennis Gilbert (Bonilla’s agent), Harry Markopolos (discoverer of the Bernie Madoff fraud), Hetty Green (legendary value investor), the legendary Warren Buffett, and Karsten Mahlmann (chair of the Chicago Board of Trade), along with six crooks: Ponzi-schemer Bernie Madoff, Sam Bankman-Fried (perpetrator of the FTX Trading crypto-exchange fraud), John Blunt (a director of the South Sea Company), Tino De Angelis (of the Great Salad Oil Swindle), and Mike de Guzman (the geologist at the heart of the Bre-X scandal). 

The lessons to be learned are that it pays to be diversified, to have a strong foundation of stocks and bonds, and to emulate the strategies and approaches of those worthy and accomplished investors Stephen Foerster calls heroes. Importantly, investors need to be mindful that unscrupulous participants are trying to play off our emotions and biases. We must beware of false promises. 

Novices and experienced investors alike will find Stephen Foerster’s book both thought-provoking and entertaining. A great stocking-stuffer for the holiday season! 

Trailblazers, Heroes, and Crooks: Stories to Make You a Smarter Investor, by Stephen Foerster, was published in 2024 by John Wiley and Sons Inc., Hoboken, New Jersey, USA. 

Rossa O’Reilly, CFA, is a Past Chair of CFA Institute, Past President of CFA Society Toronto, and former Managing Director of Institutional Equities at CIBC World Markets Inc. 

Credits and Attribution

The Analyst is published quarterly by
 CFA Society Toronto

120 Adelaide Street West, Suite 2205
Toronto Ontario M5H 1T1

Telephone: 416.366.5755
Website: www.cfatoronto.ca

General questions: info@cfatoronto.ca

 

Opinions expressed in The Analyst do not necessarily represent those of the authors’ firms of employment or of CFA Society Toronto and do not constitute a solicitation for the purchase or sale of any financial instruments. Information herein is obtained from various sources and is not guaranteed for accuracy or completeness. The authors’ firms and CFA Society Toronto therefore disclaim any liability arising from the use of information in this publication.

Volunteers

Co-Chairs, Member Communications

Kamran Khan, CFA
Jennifer Vieno, CFA

 

Vice Chair, Member Communications

Walter de Wet, CFA

 

SENIOR ADVISOR, MEMBER COMMUNICATIONS

Rossa O'Reilly, CFA

 

Editorial Committee Members

Jack Bruton, CFA
Moiz Divan, CFA
Joshua Giancola, CFA
Winfred Lam, CFA
Krystyne Manzer, CFA
Jenny Shen, CFA
Mark Timm, CFA
Sean Wang, CFA
Joanna Wolff, CFA
Hisham Yakub, CFA
Jindou Zhang, CFA
Kevin Zhao, CFA 

Editor

Sara Maginn Pacella

 

 

Art Director

Donna Metcalf

 

DIRECTOR, MARKETING AND COMMUNICATIONS

Kenny Chan