I’ve been reading “The Adventures of Huckleberry Finn” recently. Aside from being a great book in general, I stumbled across a great little bit of How Not to Invest, shall we say, in a conversation between Huck and Jim.
They are talking about being rich, and Jim says he was rich once. He had 14 dollars, but lost it all speculating.
“What did you speculate in, Jim?” Huck asks.
“Well, first I tackled stock.”
“What kind of stock?”
“Why, live stock – cattle.”
Jim says he paid 10 dollars for a cow, but that it soon died. He didn’t lose everything, mind you, as he sold the carcass for $1.10.
He still had about 5 dollars left, so he invested it with a “bank”. The bank was actually just a one-legged farm hand who promised 4 dollars interest at the end of the year for every dollar invested. Jim invests 5 dollars and is promised 35 dollars in one year’s time.
Jim figures the 35 dollars is a sure thing, so in order to “keep things moving” he decides to buy a boat for 35 dollars from his friend, Bob, on credit and promises to pay in a year.
It’s unclear if Jim planned to re-sell the boat and invest the proceeds in something else or what, but it is essentially moot, as the boat was stolen that night. The next day the one-legged farm hand announced that his “bank” had gone bust, leaving the investors with nothing.
If you’re keeping track, as Huck was, you will note that Jim still had 10 cents in cash. What did he do with it? He had a dream to give the 10 cents to his friend, Ballum, to invest for him, because Ballum is said to be lucky.
Ballum takes the money and gives it to the poor because he heard a preacher say that whoever gives to the poor is bound to get his money back a hundred times over.
Of course, no money ever came back to Jim, and he was left with zero. In fact, he is 35 dollars in the hole to Bob, but nothing is mentioned about that.
It isn’t surprising that Twain would insert some commentary on investing in his books. He is well-known to be a social commenter, and was a fantastically terrible investor (he apparently lost about the equivalent of 4 million in today’s dollars by investing in a typewriter that never came to market… he had to go on a 9 year speaking tour to regain his fortune).
What is somewhat surprising is how relevant his words still are today. There are, unfortunately, countless Jims in the world making investments in sickly stock and bad banks, countless Jims misusing credit, and countless Jims giving their money to managers based on past performance.
So don’t be like Jim. You never know where you’ll end up.
In Search of Salt 
Interestingly enough I’ve been doing a bit of reading lately about Tom Sawyer. It’s been ages since I’ve last touched these novels and I like hearing about the lessons that one can learn from them. Indeed, too many people today try to chase the hottest thing, and there are always sharks in the water waiting to take a bite.
Thanks for the comment, Kevin.
That is an interesting coincidence that you’ve been doing some Twain reading. Most of Twain’s quotes are devilishly brilliant, and a good one on investing is as follows:
I read Treasure Island last year (fantastic adventure) and I’m sure there are plenty of lessons in there as well.
Speaking of chasing things and lessons from writing, here’s something I wrote last year based on an Aesop tale that you may enjoy.
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I really enjoyed reading Huckleberry Fin, that was years ago! It’s true, Twain did bring up a good point about being ever so careful with your personal finances and learning from past experiences. We need to be especially careful now days with online banking, looking for banks with great security measures over the internet, like Aurora Bank! There will always be Jims out there waiting for gullible people to fall for their traps.
Hi Jessica. Thanks for the comment.
It’s well worth a re-read.
I’m not familiar with the bank you mentioned, but if you feel it has extra security, great. I think most banks are pretty secure as far as online banking goes. It’s in their interest to have virtual fortresses. They would probably be on the hook for any identity theft.
There certainly are plenty of phishers out there. Just for clarification, though, in the book Jim is the one taken for the ride. I am just reading now, however, about the King and the Duke, and how they dupe several townspeople out of cash.