With the caveat that there's as much art as science to picking issues with upside potential, Lynch commends legwork and observation. In breezy, anecdotal fashion, the author also encourages individuals to go it alone in the market rather than to bank on money managers whose performance seldom justifies their generous compensation. Drawing on his experience at Fidelity's Magellan Fund, a high- profile vehicle he quit at age 46 in 1990 after a spectacularly successful 13-year tenure as managing director, Lynch (One Up on Wall Street, 1988) makes a strong case for common stocks over bonds, CDs, or other forms of debt. More uncommonly sensible investment guidance from a master of the game. But then, at least in a way, it does, so that, as Harford explains, it becomes apparent why Detroit is a third-rate city and New York a first-rate one, why New Orleans should not be rebuilt and why agribusiness contributes to political campaigns while real-estate agents do not.Ĭhock-full of numbers and money talk, but oddly entertaining-of a piece with Dan Ariely’s superior Predictably Irrational (2007) and other recent popularizing works in behavioral economics. Because he knows that your bets are sometimes very weak, he can’t afford to fold too easily.” Would that the rest of life operated so predictably.

The reader learns here, for instance, why he or she should damn the torpedoes and bet with a handful of bad cards: “Your opponent will have to call you a little more often. Harford occasionally gets caught up in the inevitable abstractions of economics, but for the most part his narrative is refreshingly down-to-earth and even useful. “Even a coward like me will risk his life for money,” writes the author, and risk is omnipresent, in various degrees, whenever money enters the discussion. That calculus comes into play when Mexican prostitutes (Harford picks many examples from the demimonde) determine whether or not the john must use a condom, charging more if not and when soldiers decide whether to risk their lives by re-enlisting in exchange for the healthcare and other benefits offered by the military. Criminals, for instance, “can be brutal and remorseless, but many of them are far from indifferent to the ‘pains of imprisonment,’ ” because they know that in the calculus of life crime literally doesn’t pay. Or, the things people will do for money-and for good reason.Ĭontrary to pop economists who have examined the stranger moments of human behavior vis-à-vis the benjamins ( Freakonomics, etc.), Financial Times and Slate columnist Harford ( The Undercover Economist: Exposing Why the Rich Are Rich, Why the Poor Are Poor-And Why You Can Never Buy a Decent Used Car!, 2005) centers on the predictability of much of it.

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