History has seen many speculative bubbles, economic crises and stock market crashes. Anyone who wants to understand the nature of the financial markets has to look behind the mechanism.

Understand finances & investments: More than money & greed

Just a collection of ideas and notes?

Often friends ask me how I have time to read books and Article to write, to hold seminars and to give lectures to banks when I'm constantly on the go. However, this is not Problem, because what I have to do, which means thinking and reflecting, I can do anywhere, on the plane or on the train, in the bathroom or in the rocking chair, and especially while listening to music. The only important thing is that I write down my ideas immediately before they fly on. The motto could be: "That's good, that's right, no one's master, no one's servant!"

So this text is a collection of notes on dozens of pieces of paper, restaurant bills, paper serviettes, backs of tickets, etc., thoughts, ideas that suddenly came to me through the Head shoot. You often have with you Money to do with economic and political problems because I know the events of Welt constantly analyzing and weighing the pros and cons.

And who is the author? I don't know myself how to introduce myself and where my place is. It's very difficult for me to give an exact answer. I was born in a feudal country. I also studied there, philosophy and art history at the University of Budapest. I had my first practice in finance in the country of capitalism in the 19th century, on the Paris Stock Exchange. I did my higher education on Wall Street, the stronghold of modern capitalism. My Status is also a bit complex. I was born Hungarian, a citizen of the United States, a Knight of the French Legion of Honor and now at home in ten cities.

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I speak different languages: Hungarian with the good Lord, French with my friends, German with my students and readers, English with the bankers and the language of flowers with the ladies. My father was an industrialist in Budapest (would be 120 years old today), mine Mother was very musical, a true esthete: she might have had talent for painting and writing if she hadn't devoted herself exclusively to her children. I have brothers, one sister, cousins ​​scattered all over the world with whom I am in more or less close contact. Where is my seat? For the stock market professionals, I'm a journalist, so I'm just an outsider on the stock exchange, at best a weirdo. Maybe (!), but so far a pretty good spinner. I was already a currency dealer at the age of eleven in the chaotic times after the collapse of the Austro-Hungarian Monarchy, when the successor states continuously stamped, re-stamped and re-stamped their inherited currencies and banknotes. In this confusion I had my first experiences. So my life has been closely linked to the stock market for 60 years.

I've survived earthquakes and deluges on the financial markets and thanks to the stock market I could – if I wanted to – retire comfortably. (But then this book would not be in your hands today.) For my colleagues, however, I remain a journalist and not a stock market professional. And I'm proud of that too; because I think journalism is the most beautiful thing Job. The press establishment, on the other hand, has never accepted me as one of their own, at most as a "guest worker." Although I have millions of readers and I fight with word and pen for the free economic system, against its pests and sharks, I have not received an award for it. Well, at least 25 years ago, General de Gaulle made me a Knight of the Legion of Honor for my "journalistic work". At that time I was a foreign policy commentator for the major daily newspaper Paris Presse.

The bankers, for their part, look at me cross-eyed Eyes I suppose I won't mince my words if I'm convinced that the general interest is being harmed. Nonetheless, they invite me to lectures that Audience comes in droves. The ProfessorThey smile about my statements and theses, but still listen to me I aufmerksam not to mention the thousands of prospects who attended my seminars or the students I lectured to at numerous colleges. I admit that I never studied economics at university, but even more so in the jungle, where I had to pay a lot more tuition. Luckily (!), because I have always remained completely unbiased in objective analyses. Entrepreneurs, businessmen need to take stock once a year. I will take stock of my life for the first time and ask myself: "Kosto, what did you do right, what did you do wrong?"

From stock market professional to traveling preacher

If I had only remained a stock exchange professional, I would be sitting in the elegant today Office of a Wall Street skyscraper, surrounded by a dozen phones and computers, would have to be available for hours more nervous customers stand and watch as prices jump up or down a quarter, and so in such a tumult might not have a clear view of the burning issues. I would be right after Study Having become a journalist, a profession that I value so much and that was actually my wish, I would not have had the experience that is worth tons of pure gold to me today. I would sit in an editorial office and report on topics that only interest me marginally or that I don't understand anything about. Had I chosen college, I might have been pinned to a professorship in a small town instead of rushing around the world and millions of People to meet. My world is New York, London, Paris, Munich, the Riviera and even Budapest. If I were a so-called economic expert, I would have to tremble if a Company makes higher profits thanks to my advice.

No! I'd rather be a hippie, a kind of itinerant preacher, totally independent, who can write and say whatever I think is right, even if it sometimes means stepping on someone's corns. "That's good, that's right, no one's master, no one's servant!" For many I'm a clown because I'm the Courage to tell truths - even with jokes - which the prominent experts do not dare. Only an inner wound hurts me: that I'm not a trained musician, but just a music fanatic, if the passion for music and Art in my thoughts too Economy and even the stock market has also often helped. My notes and remarks are intended to serve as a vademecum for young stock market professionals, money changers and similar "rascals". You should heed the advice of an old colleague, one of the last Mohicans on the international trading floor. And they are intended to amuse all my readers, even if they are not related to the stock market, in a pleasant way and to give them some insights that have accumulated in my notebook over the years.

The portrait of Dorian Gray

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"But let's be very frugal with it" Colleagues often ask me with a smile what I do with the "lots" of money when they find out about my fees for various activities. Strangely, nobody asks me what I can do with the money from lucky speculation when I might win ten times (but not earn). Money earned through work doesn’t seem very safe to them. I can think of an authentic comment from an old friend. He was a wealthy man, kind of old playboy. As a passionate fencer, he met a young man at a sports meeting, whose fencing skills caught his eye. He asked him if he would like to come to his house for a little fencing practice. "On Mondays, for example?" - "No." "Tuesday, Wednesday or Thursday?" "No, not either."

"Why?" was the astonished question. “I work, Herr Hauptmann.” “Work? That can't be very good,' my friend replied. The captain was a clever but oddball. One day, when he offered the "Du" to a young fencer out of sportiness, the young man's reply was: "Thank you, Captain." To which the old man immediately remarked: "But let's be very economical with it." Cogito, ergo sum... »Cogito, ergo sum homo speculator.« I am a speculator. is this a job No, it's fate. I landed by chance with a parachute on a big stock exchange, the Paris BOURSE. Coincidence or destiny? My stock exchange godfather: Monsieur Alexander K. In the early 20s, my father met a former schoolmate from Budapest in Paris, Monsieur Alexander K., who was not only a multi-millionaire, but also a very big mover on the Paris financial market. As they talked about the old days, my father would relate his Family and reported that his youngest, little André, was still studying philosophy at the university in Budapest. "What nonsense," was Alexander's reaction, "does he want to be a poet? Send him to me in Paris, that will be a better school for him.”

The main thing is to get into debt

And with that, Alexander gave my father the second big tip. In fact, the first was of an entirely different nature: speculation on the fall of the French franc. A surefire bet according to all well-informed financial circles. Today I can say with the greatest certainty that the second tip was the good one. But the first tip is also worth a closer explanation; 20 years later, the events surrounding this gigantic franc speculation in the 55s could be a living example for me, my students and my readers of how the speculators imagine things would go and how they actually happen: black clouds rolled over them at that time all over Central Europe, the German Rich and all neighboring states of the Austro-Hungarian Monarchy, which collapsed into chaos after the lost World War.

inflation without production, poverty, unemployment, queues in front of the grocery stores..., the printing press ran day and night, currencies were in the basement, prices rose from hour to hour: a pair of trousers that had cost 50000 marks in the morning was already priced at 100000 in the afternoon. I was on a study trip in Germany, visiting numerous cities and living on a dollar a day because the dollar was king. Everything revolved around the American currency and in Budapest there was only one talk of the day: the exchange rate of the dollar. Some inflation speculators made millions, billions even (in paper money, of course!) buying anything from rows of houses to ten cars of toothbrushes as long as they could be bought on credit. dept Do it was the command for anyone even a little enterprising. What came next is worthy of a pragmatic study of history. One could discuss the reasons and responsibility for hours, the consequences led to the greatest catastrophe in world history: Hitler.

The Castiglioni – Mannheimer tandem

But let's stay in the 20s. After the fall of the currencies of the central powers, speculators smelled a new roast: the collapse of the French franc. As I said, a surefire thing. France had won the war, but was bleeding to death in the process: millions of dead, numerous devastated cities, state finances in total chaos. A daring German speculator, the Stuttgart Dr. Fritz Mannheimer, was the largest banker in Europe at the time, Executive of the house of Mendelsohn and Co. in Amsterdam and partner of the old Berlin patrician company Mendelsohn and Co. He was invited to a big party in Vienna by the king of inflation speculators, Camillo Castiglioni, the "Austrian Stinnes" as he was called.

Castiglioni (son of the Chief Rabbi of Trieste and former Seller at the tire company Semperit) now had the fixed after billions in profits from the Austrian inflation Idea, the French franc, like the mark and the currencies of the Austro-Hungarian monarchy, must also plummet. He managed to convince Fritz Mannheimer of the correctness of his view and to form a syndicate with him and some other bankers and speculators from Vienna and Amsterdam in order to discredit and attack the French franc in all financial centers with the help of the specialist press.

How to survive a stock market crash

The Franc continued to fall... What does it mean to attack a currency? Obtaining huge loans in the currency in question and then offering these amounts in all financial centers such as London, Zurich, Amsterdam etc. - if possible with a lot of fanfare, newspaper articles, word of mouth etc....? The currency slides slowly (at first) downwards, the decline spreads pessimism among the audience. And through a chain reaction it becomes of Anxiety seized and – as in this case – throws his franc balances overboard. The debtors can then use the induced panic to buy the francs owed at a low rate. Exactly the same approach, or one could say the same tactics, as in the late 70's, early 80's under the weak Carter administration regarding the dollar. The Castiglioni-Mannheimer tandem was extremely successful. The franc continued to fall, accompanied by the franc sales of all European speculators, and Castiglioni grew richer and richer. To also say something good about the former Semperit seller, I would like to note that he did a lot for cultural life. For example, he financed Max Reinhardt, the greatest theater man of the time and Founder the Salzburg Festival. (The inflationary wounds of the time are now well healed, but the festival is still thriving.) Well, the franc continued to slide lower, as the French government also did its part to ensure that that Trust was completely lost in their own currency. Government after government fell, and the franc with them. I still remember the atmosphere in France like it was yesterday.

In 1926, the left-wing coalition led by Eduard Herriot, the pro-German politician, mayor and researcher on Lyon, music and Beethoven, won the elections. His finance minister, Anatole de Monzie, quite a brilliant intellectual (whom I later knew personally well), caught his Rede in Parliament with the following words: "Gentlemen, the coffers are empty...!" Great shock in Parliament and throughout the country. The franc fell to a new low and with it the government. Demonstrations against the people's representation, great hatred of foreigners (as so often in French history): "The foreigners come and eat our bread," that's an old song. Stones were thrown at tourist buses and the windows of cinemas showing foreign films were smashed. The panic was there and the franc was dying.

Poincaré, the savior

And suddenly something happened that all foreign exchange dealers, whom I like to call "currency freaks", should always keep in mind. The news came from the Élysée Palace: Raymond Poincaré accepted to become Prime Minister and Minister of Finance at the same time. The trend in the foreign exchange market changed from one minute to the next, because Poincaré had become the symbol of French patriotism and all virtues. He was definitely not an overly clever man, a dry lawyer, but with integrity, puritanical and ardent patriot, incidentally stubborn like any Lorraine. He was the President of the Republic during the World War, a passionate enemy of Germany (that was one of the French virtues at the time), and, more importantly, he immediately got approval for a loan from the New York bank John P. Morgan $ 100 million.

As if under a magic wand, everything changed in the twinkling of an eye. This time the bear market speculators panicked, wanted fast buy back the francs they owe, because everyone owed as many francs as they could. (A friend of mine owed millions to a porcelain factory. Why? Because that factory was on loan.) The franc climbed higher and higher and the foreign ones were traded on the stock exchange shares (gold mines, oil stocks, etc.) no longer list at all due to the massive sell orders. There were only orders to sell, since all speculators - big or small - from all over Europe had bought foreign securities against francs on credit. And now everyone wanted to get rid of her.

Thousands of speculators were broke and even some large French companies (department stores, exporters ...) got into financial difficulties because they owed hundreds of millions of francs. The French franc rose by 100 percent within a year and the French central bank even had to keep the exchange rate artificially "low" for export considerations. In French financial history, this episode was remembered as the "Marne Battle of the French Franc". All of Vienna, half of Prague and Budapest as well as Amsterdam were bankrupt. My father also had to pocket losses, but these were, as I reported, amply compensated for by the second tip. I came to Paris as an apprentice to Alexander and to the stock exchange, where I spent my decisive years of apprenticeship.

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