Todd Capital Book Club: Irrational Exuberance, the worst investment book I have ever read


I just finished the book Irrational Exuberance.  It came highly recommended by one of the trolls on twitter who told me that I don’t know anything because I read Cramer but have never read Irrational Exuberance. Now, this genius also put me up on Random Walk Down Wall Street, which was great, so he wasn’t 100% in the wrong.  But this quick post will discuss why nobody should read Irrational Exuberance.

The book has no actionable theme

The first problem with this book is that although he preaches about the concept of this idea of irrational exuberance which is effectively people who are so bullish that they create crashes by investing in companies that are over valued in hopes that it will continue to rise, he doesn’t talk about how someone can profit from these trends.  Most of the book is really him scaring you away from the stock market.  This book to me is the equivalent of scaring people off the freeway because there are people who speed and cause accidents.  In that sense I think this book is irresponsible.

Stock market history book 

What it does well is he shows trends and patterns in history that can help people invest smarter during times of optimism.  I just don’t think he closed that gap.  The data and information he provided is helpful.  He analyzes a lot of historical events that we can take lessons from I just don’t feel like he was willing to step out there and make a prediction or projections. But he just leaves it there.  He shows how things ran up and then crashed.  It is effectively a book of Monday morning QB for the stock market. This is how a lot of people invest but you cant invest in the rear view mirror. You don’t get rich in the rear view mirror.

A lot of speculation

Most of his ideas where based on could, should, would and might.  This might be safe but it is not helpful to the reader.  You are left with no realistic call to action.  He just kind of leaves it at that.  He shares a bunch of information a lot of data and tells you that the sky is falling and then the book is over.  I was not impressed.

I was not impressed because I think that this further indicates his aversion to risk.  He is so small and scared that he isn’t even willing to make an prediction even though he has done all of the research to justify one.  Its like someone who researches stocks and never pulls the trigger because they are afraid to lose.  The author here effectively preaches that we should in fact do that and avoid the stock market altogether.  In that regard this book become useless.


Boring reader

Lastly, this is one of the only times I have not been impressed when the author reads the book.  Usually the author knows the book so well that he reads with more passion and enthusiasm and expands on the ideas therein.  Maybe I am spoiled by Grant Cardone and Gary V who are great communicators but this guy will put you to sleep.  He is probably a great mind but it gets lost in the monotone.

Overall I would only recommend this book just so you can check it off and say you read it when internet trolls pop up in your mentions.  However, if you want to learn about investing or how to invest there are a lot of better books.  This book gives you no practical actions steps it just spends 6 hours reading to you all the reasons why a crash is coming and why the market is risky.  I think you would be better off reading Random Walk Down Wall St.  Let me know what you think.

Be great,

Todd Millionaire

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