Jason Zweig On Finance And The Devil’s Financial Dictionary by EconTalk

Jason Zweig of the Wall Street Journal and author of The Devil’s Financial Dictionary talks with EconTalk host Russ Roberts about finance, financial journalism and Zweig’s new book. Zweig discusses rationality and the investor’s challenge of self-restraint, the repetitive nature of financial journalism, and the financial crisis of 2008.

Jason Zweig On Finance And The Devil’s Financial Dictionary – Podcast Episode Highlights

Russ: I’m a big fan of Ambrose Bierce. His book is the The The Devil’s Financial Dictionary, and you have written a–it’s really an homage to Bierce, I would say. Is that a good way to describe it?

Jason Zweig: I was trying to channel him. I make no pretense of being either as cynical or as good a writer as he was. But I certainly was trying to write it in his spirit.

Russ: And we’re going to get to your book in a minute. Before we do, I do want to let listeners know that Ambrose Bierce was and amazingly entertaining and clever fellow. Nineteenth century, right?

Jason Zweig: Yeah. Almost an exact contemporary of Mark Twain, I think–he was born in 1842 or 1847, and he is believed to have died in 1914, although, as you know, Russ, nobody is quite sure about that.

Russ: Well, I appreciate the assumption that I know. Before we talk about it, I want to quote Bierce a couple of times, give people the flavor of Bierce. He’s not, I think, well known; or certainly he’s not as well known as he should be. And I encourage listeners to check out his book as well as Jason’s. But he defined–his book, The Devil’s Dictionary, is a set of definitions of common terms. So, here’s his definition of politics:

POLITICS,

  • A strife of interests masquerading as a contest of principles. The conduct of public affairs for private advantage.

I think that’s very deep and true. He also defines egotist as–I love this–

EGOTIST,

  • A person of low taste, more interested in himself than in me.

So, what you have done in your book is taken that spirit and turned it toward the financial sector with great success. And we’ll get to that eventually, but I first want to interview you and ask you some questions about financial journalism and Wall Street generally; and then we’ll turn to the book. You’ve been a journalist writing about finance for a long time.

Jason Zweig: Yeah. It’s coming up on 30 years now. And in human years, that’s really a long time.

Russ: Where have you worked?

Jason Zweig: Well, I did a brief stint at Time Magazine in the mid-1980s. Then I was at Forbes Magazine for about a decade. Then I went back to Time, Inc. in the late 1980s and 1990s, and worked mainly at Money Magazine, and did some things for Fortune and Time as well. And then since 2008 I’ve been at The Wall Street Journal.

Russ: So, what would you say your philosophy of financial journalism is? At one point in a recent article you note that there is a repetitive aspect, when you write about personal finance. What is that aspect, and what’s your philosophy of how to deal with that.

Jason Zweig: Yeah, well, I’ll tell a quick anecdote,

Russ. Some years ago–many years ago, in fact: it was probably in the late 1990s–I was at a financial journalism conference and a question came from the floor. I was on a panel discussion and the questioner asked each of the panelists: ‘Don’t tell us what it says on your resume; don’t tell us what it says on your business card. What do you do for a living?’ And I think the person said, ‘In 30 words or less.’ And I think there were 4 other people on the panel; and 20 minutes later I finally got a chance to give my answer. So, I did have some time to think about it. Aside from the fact that none of the other panelists had honored the last stricture. But–and what I said was, ‘It’s my job to repeat myself 50 to 100 times a year so that neither my editors nor my readers will notice I’m doing it.’ And there’s a reason for that. I mean, I’m in the advice business–much more so than I’m in the news business. Although, obviously, I do both. And there have been any number of times I’ve been fortunate enough to break news in my columns. And that’s very exciting, when I’m able to do it. But, for the most part, I give people advice about what to do with their portfolios. And for people who are saving for retirement or to put their kid through college, the real test is: Can you provide sensible advice that simply improves the probability that people can meet their financial goals? And if that’s what you are trying to do, there just are not that many novel, innovative things you can tell people that are good for them. Almost every exciting, new investment idea sooner or later will turn out to be bad for people. So, really, all I’m trying to do is answer the question: Is this tactic, approach, product, strategy, fund, trading technique good or bad for the people who will use it? I’m not trying to answer the question of whether it’s good for Wall Street or the financial industry. I’m just trying to ask whether investors themselves can benefit from it. And sometimes the answer is Yes. And that’s great. But quite a few times the answer is No. And then people need to hear that.

 

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The Devil's Financial Dictionary by Jason Zweig

The Devil’s Financial Dictionary by Jason Zweig