Media Spotlight: The Unwritten Laws of Finance & Investment

By Robert Cole

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Following the re-publication and no doubt financial success of James Skakoon’s The Unwritten Laws of Business, reviewed in the March 22 issue of Mortgage Strategy, we now have The Unwritten Laws of Finance & Investment.

Clearly publishers are jumping on a lucrative bandwagon – the book has got prospective stocking filler written all over it.

Written by The Times’ investment journalist Robert Cole, the book hammers home a familiar message of financial education being the key to consumers not ending up in the same boat as some have as a consequence of the recent crisis.

Confusingly, at the beginning he states that while some people may want to learn more about investment and finance, others are more inclined to run a mile and take the attitude of Polonius in Hamlet when he says, “neither a borrower nor a lender be”. Surely the problem has been that consumers en masse have embraced debt and risky gambles.

As Polonius’ next line puts it, “for loan oft loses both itself and friend”.

Regardless, The Unwritten Laws of Finance & Investment aims to be a means of addressing this and essentially is a compilation of sage wisdom on speculation.

The tips of everyone from Sun Tzu, author of the 500BC classic The Art of War, to Anthony Bolton, Warren Buffett and Robert Peston have been raided for this book.

For the most part these are pretty commonplace homilies – don’t lose money, keep costs down, don’t commit fraud, spread your money around and, of course, caveat emptor – buyer beware.

There’s also some good advice that will gladden the hearts of those of you thinking of charging fees – be prepared to pay for knowledge.

And his advice on debt to consumers – in a chapter titled It’s Good, It’s Bad And It Can Get Ugly – is also good, especially when he sets out the difference that even a modest change in mortgage rate can make to the overall cost of a loan over a 25-year term.

If spelt out to borrowers, it would no doubt have a sobering effect on many.

Cole then picks out a range of quotes to demonstrate his point, from the Book of Proverbs – ’The rich ruleth over the poor, and the borrower is servant to the lender’ – to US writer Ogden Nash – ’Some debts are fun when you are acquiring them, but none are fun when you set about retiring them’. Also mentioned are interesting quotes about politicians when they get involved in finance and the damage that can be caused by additional regulation and legislation.

He references US satirist PJ O’Rourke who said that “when buying and selling are controlled by legislation, the first thing to be bought or sold are legislators”.

Now all this is great but unlike it’s sister title, The Unwritten Laws of Business, it lacks cohesion. Obviously the previous title had the advantage of being endorsed by the likes of Buffett rather than directly quoting the man.

But the quotes are the main problem – they’re interesting, but it becomes more a book of witty and pithy sayings about investing rather than a practical investor’s guide.

But as a general digest of financial wisdom, from Hollywood to Adam Smith, it does function as a handy compendium.

Book review by Robert Thickett