Subject: Re: Economics (Austrian?) and its relevance to Value Investing
A Reader implores, “One last question. I’ve actually bought all of James Grant’s books but where does his book fit into the framework of Austrian economics?Should I read it first before reading Austrian economics? Afraid I’d get confused.
I’m a bit embarrassed really, but since you’ve already taken the road, I’m hoping not to have to ‘reinvent the wheel’, so to speak… either that or I’m just plan lazy.
Reply: James Grant has said he is a big fan of Ropke http://library.mises.org/books/Misesorg/Who%20is%20Wilhelm%20Roepke.pdf.
The book Grant mentions is Wilhelm Ropke’s Crises and Cycles (1936) in his excellent book, The Trouble with Prosperity: A Contrarian’s Tale of Boom, Bust and Speculation.
Try reading Ropke’s book: http://library.mises.org/books/Wilhelm%20Ropke/Crises%20and%20Cycles.pdf
Flash that tome on your blind date! It didn’t work so well for me: http://www.youtube.com/watch?v=dvB_Ck2zFzs.
I then had to spend a lot of time travelling with my brother to get back home where I belong. http://www.youtube.com/watch?v=RN0DczbPznY&feature=related
Or start here: How to study Austrian Economics: http://www.libertyclassroom.com/learn-austrian-economics/
My suggestion is to start with The Trouble with Prosperity and note your questions, then look at Jim Grant’s notes and bibliography–read some of his sources. But keep learning economics–the proper way.
Good luck and let me know if that helps.
Thanks John. I’ll start with these first then
I’ve read a book on Austrian School economics and always sort of wondered about the conflict between the subjective theory of value it describes and the intrinsic theory of value that value investors believe in.
http://en.wikipedia.org/wiki/Subjective_theory_of_value
http://en.wikipedia.org/wiki/Intrinsic_theory_of_value
Dear Mike: You are not the only one. See Ben Graham meets an Austrian economist http://mises.org/journals/scholar/Leithner.pdf title=”Graham and Austrian Economics” rel=”nofollow”>www.mises.org/journals/scholar/Leithner.pdf
Note how Graham never mentioned a PRECISE intrinsic value in ALL his writings.
Also read a good interview of how a value investor turned to Austrian economics:http://www.dollarvigilante.com/blog/2011/7/11/an-interview-with-chris-leithner-on-austrian-economics-and-a.html
Interesting discussion. Learning a lot of new things here everyday
Hey, just noticed Capital Account interviewed Jim Grant recently here:
Thanks agewisdom. Ben Graham and Austrian economcis:mises.org/journals/scholar/Leithner.pdf