Where Are the Customers' Yachts?: 8 key ideas
The core ideas of Where Are the Customers' Yachts?, each in under a minute, written in our own words. Want the full depth? Get the book.
- IDEA 1 OF 8
The customers had no yachts
Schwed tells of a visitor to New York who admired the yachts of bankers and brokers, then asked where the customers' yachts were.
The joke captures his point that Wall Street profits more than its clients.
- IDEA 2 OF 8
Nobody can forecast markets
Schwed argues with humour that predictions about markets are mostly guesses dressed up as expertise.
Even confident professionals cannot reliably say what prices will do. He compares forecasters to fortune tellers.
- IDEA 3 OF 8
Many brokers mean well
Schwed suggests that most people on Wall Street are not villains but ordinary people who believe their own theories.
Their sincerity does not make their advice correct. Confidence and accuracy are very different things.
- IDEA 4 OF 8
Investing and speculating differ
Schwed distinguishes careful investment from speculation, which is betting on price movements.
He argues people often call speculation investing to make it sound respectable. Words, he says, can disguise real risks.
- IDEA 5 OF 8
Salesmen earn from activity
Schwed describes customers' men, brokers who earn commissions when clients trade.
This creates an incentive to encourage frequent buying and selling, which helps brokers more than customers. The customer pays either way.
- IDEA 6 OF 8
Complex products hide risks
Schwed pokes fun at complicated financial tricks like options and short selling.
He warns that complexity often benefits sellers and confuses buyers. Simple choices are usually easier for investors to understand and judge.
- IDEA 7 OF 8
The 1929 crash taught humility
Written after the great crash, the book reflects on the losses of that era.
Schwed uses them to show how quickly confidence can turn to disaster. Many fortunes vanished almost overnight.
- IDEA 8 OF 8
Humour reveals hard truths
Schwed's light, witty style makes serious points about greed, hope and human nature.
The book remains popular because its lessons still feel relevant decades later. Its cartoons and jokes are still widely quoted.
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