Motley Fool Hidden Gems Investing - Motley Fool Money: 10.08.2010

Episode Date: October 8, 2010

On this week's Motley Fool Money, we share some of our favorite recent interviews. Michael Lewis talks about The Big Short. Alice Schroeder talks Snowball: Warren Buffett and the Business of Life. Matt Ridley makes the case for rational optimism. And Dave Barry talks about the business of humor writing. Learn more about your ad choices. Visit megaphone.fm/adchoices

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Because we have your number. everybody needs money that's why they call it money from fool global headquarters this is motley fool money welcome to motley fool money i'm chris hill we've got a special edition of motley fool money our team of analysts is on vacation so it gives us the opportunity to share some of our favorite interviews. We've got a quartet of best-selling authors on board, including Alice Schroeder, author of The Snowball, Warren Buffett, and The Business of Life. Matt Ridley, author of The Rational Optimist, makes the case for why things are getting better. And Dave Barry talks about the business of humor. But we

begin with Michael Lewis, the best-selling business author of Liar's Poker, Moneyball, and the Blind Side. His latest, The Big Short, Inside the Doomsday Machine. It's a book that profiles a few investors who got rich off the financial crisis. Now, there are a few key characters that you profile and focus on in the book. One of them, fascinating guy named Dr. Michael Burry. This is a guy who's a medical doctor, starts out as a value investor, who ends up not only placing the right bets, he's the guy who talked the investment banks into creating a whole new market. How does something like that even happen? Well, because they're ready to create it anyway. I mean, you just put your finger on the most interesting thing about his story,

that he came from being a pretty strict value investor. I mean, in a different age, he would have been Warren Buffett or something like that. But this age demanded that he change would he do? And he figured after a while, the stocks he was looking at were going to be driven one way or another by what was going on in the subprime mortgage market. And he started to study it and quickly figured out that while there were instruments available to short other kinds of bonds, they weren't available yet for subprime mortgage bonds, but Wall Street might create them. And the instrument was called a credit default swap. And so he figured out Deutsche Bank and Goldman Sachs were going to be on the edge of this, which they were and remained. And he pushed

product Goldman Sachs and Deutsche Bank to sell him some. And look, this would have happened anyway at some point. It might even have happened right when it happened. But he was the first customer waiting once the contract is standardized. You know, it's an odd story because typically, historically, the last thing you want to be is on the other side of Wall Street's trades. Typically, historically, the Michael Burys of the world would get killed arranging this sort transaction with a big Wall Street bank. But he didn't. I mean, he made a fortune. And it was a long and, for him, miserable saga, because he was very early into this perception that the subprime mortgage market was a disaster waiting to happen. And a lot of people disapproved of what he did.

His investors, his own employees rebelled. But he stuck with it, and now he's a rich man. Well, and that's the thing. I mean, here's a guy who starts out with stocks, And he ends up going into an area which everyone else thinks is really risky, but it really ended up being a safer bet for him, wasn't it? Yeah, well, there's no question. I mean, you know, he kept trying to explain that when he buys a credit default swap, his downside is known and limited to, you know, over the life of the swap, you know, 10% or 12% of the principal amount, and it's a long life.

And he was paying kind of 2% in premium a year. And his investors, I guess they may have basically understood that, but it disturbed them that this fund manager, who they had placed money with because they thought he was a really shrewd picker of undervalued companies, had morphed into a player in the American bond markets, in a particularly abstruse wing of the American bond markets. And he kept trying to explain to them that, look, it's all tied together. You can't invest in stocks without having a view on this explosion of credit creation that's going to go wrong. And in the end, the irony is that in order to keep his position, the short position he had in subprime mortgage bonds, he had to side pocket it. He had to say essentially to his investors, you can't unwind this trade. You can't have your money back. It's an illiquid trade, and I had these provisions in my documents that allowed me to just keep it.

And so he just kept it over the objections of his own investors. Winds up making them all rich, and at the end of the day, they all hate each other. And I can't think of too many stories. There are lots of stories on Wall Street where people lose money and wind up hating each other. But it's hard to think of another story where people get rich and wind up hating each other. In fact, it's the only one I can think of, but that's what happened. How much did he make? Well, by the time in 2007, when he unwound the trade, he puts the trade on in March of

05, unwinds it through 07, and his fund is about, he's got a running a fund of about $550 million, and from the position he made $750 million. So what is he, that's more than doubling the size of his fund. For himself, he made about $100 million, because his wealth was, what wealth he had was tied up in his fund. If he had been allowed to do everything he really wanted to do, which he wasn't, they made him get rid of some insurance, credit default swaps that he'd bought on vulnerable corporates, on subprime mortgage originators and real estate developers and so on and so forth.

I mean, there were billions he left on the table. But he made a fortune. I mean, he'd be more than double his money. He got rich himself and then promptly shut his fund. You're listening to Motley Fool Money. We're talking with bestselling author Michael Lewis about his new book, The Big Short, Inside the Doomsday Machine. You know, we talk about Dr. Michael Burry. There are these characters in your book. Steve Eisman is another one. These people who, of the thousands and thousands of investors out there running hedge funds, working at the big

Wall Street firms, there's only a handful who actually saw this coming. How did they do it? How do people like Steve Eisman and Michael Burry see this opportunity when no one else can? Well, Michael Burry has Asperger's syndrome, and Steve Eisman has some other kind of syndrome that has no kind of name on it. But basically, it keeps him detached from ordinary society. His wife had a great line. She said, my husband is rude. He's rude to everybody. I know it.

I've tried. I've worked on it. There's nothing I can do about it. But Eisman was another kind of person who, I mean, just an independent cuss, I mean, just an independent character who remained detached, I think, from the larger financial world. I mean, there was a theme with these characters mostly who remained detached, who were in this position, that they were all a little obstreperous. They were all outsiders. They were all capable also of imagining a world vastly different than the one we were currently in. So they could imagine great change.

So they all had some imagination. But this was the question, the question you ask, how did they do it? How did they see it? Is the reason I got interested in the story. I mean, it did seem to me that one way of telling the subprime mortgage bonds crisis was one of, but it was forced and false, was just kind of totally self-conscious fraud perpetrated by the entire financial system upon the American people kind of thing. But the problem with that is that all the putative fraudsters, all the big Wall Street firms, ended up owning this stuff.

I mean, they bankrupted themselves in some cases with this stuff. So it wasn't as simple as a self-conscious fraud. It seemed to me that really what had happened was that there were a series of facts out there in the financial world for everybody to observe. And the vast majority of people saw these facts in one way, and a handful of people saw it in another. And the analogy that kept popping into my mind was there's a famous drawing. It's an optical illusion. You look at it one way, and it looks like kind of a beautiful woman in profile. And you look at it another way, and you're staring at the face of an old witch.

And it's like everybody comes to that picture, and most people see the beautiful woman in profile, and few see the old witch. Why do some people see the old witch? And I think that people are predisposed to see the world in certain ways. And in these people's cases, they all had some reason why they saw the world the way they did. So, Burry was totally focused on data, totally focused on reading subprime mortgage bond prospectuses. Eisman was totally focused on the cynicism with which lenders treated borrowers on the ground in the subprime mortgage business, but obsessed with it, like nobody else was. So there were reasons why they were predisposed to see it,

but the main point is that it wasn't that they had inside information or some such thing. They just used the same facts differently. Michael, you worked on Wall Street for a few years. You're not some novice to this whole scene. What surprised you the most when you were working on this book? Well, you know, surprise might be a really strong word because I had kept kind of in touch, loosely in touch with the financial world because of Liar's Poker.

over the years. But I was taken aback by the degree of conformity. I mean, just how like-minded so many people in the financial world had become. It was a kind of global financial monoculture had been created with these big firms filled with similar sort of people all behaving in similar sort of ways in which deviant or variant views were considered rude. And this is one reason why so few people think think are able to see the truth they're all kind of is this kind of group think uh that's that's evolved and this is very different from the wall street i left i left the wall street filled with colorful characters and outrageous behavior and and in which eccentricity if not prized was at least tolerated uh i mean the solomon brothers trading floor was

a wild and woolly place and a lot of those people who were on the solomon brothers trading floor would not be tolerated on the modern trading floor. So that struck me. I guess the other thing, but it's also one of the reasons why I wrote the book, so I was aware of it from the beginning. It's amazing that the big Wall Street firms have become the dumb money at the table because they used to be the smart money. They used to be who you didn't want to bet against.

And somewhere along the way, they became a little stupid. And I think the two things are related, the conformity and the stupidity. Coming up, Alice Schroeder, author of The Snowball, Warren Buffett, and The Business of Life. You're listening to Motley Fool Money. Welcome back to Motley Fool Money. I'm Chris Hill. So what is the secret to Warren Buffett's success? And what is the biggest misconception about the Oracle of Omaha? Alice Schroeder is the best-selling author of The Snowball, Warren Buffett, and The Business of Life.

For the benefit of people who have not yet read the book, where did you come up with The Snowball? The Snowball is from a saying of Warren's about life being like a snowball. And it's really a metaphor for compounding, for the way that things tend to grow at an exponential rate when they're rolling forward over time. So his money has obviously been like a huge snowball. But it also refers to relationships and to knowledge and all the different things that tend to grow and layer upon each other. Well, certainly to get a snowball, you need the right conditions. I think a lot of people think of Warren Buffett as a self-made man. Is that how he views his success?

It is not. He would describe himself as almost entirely a creature of luck because having been born in the United States from a family that valued education and encouraged him in his entrepreneurial investing efforts and also having been born at a time when his investing talents could be put to work in an extremely cheap stock market, those factors just almost overwhelmed anything else that could have happened. Now, I do believe that, you know, in the snowball, you will see how hard he worked. And so I tend to think that, you know, he is a little bit downplaying his own efforts. And I do believe that people succeed based on a balance of their own efforts and their, you know, circumstances. But I do think he's right to emphasize the circumstances here because he was very fortunate in the circumstances. Now, I think most people who know about Warren Buffett know about him through the context of his investments, but you got a chance to spend a lot of time with him. So a couple of questions about Warren Buffett, the person. What is a typical day like for him? He's got a really consistent routine.

He comes in in the morning around 8.30. He reads five newspapers. He reads the Financial Times, the Washington Post, the New York Times, the Wall Street Journal, and the Omaha World-Herald. Then he's got a stack of reports on his desk from the companies Berkshire owns and some trade press like American Banker or Oil and Gas Journal. and through the rest of the day he alternates between flipping through this stuff and then talking on the phone uh to people either who call him or um who he calls he never calls his managers they can call him he's really accessible but he he leaves them alone and then he's got cnbc on all day long with the crawl with the sound muted and if he sees his name cross along the bottom and

that they're talking about him he'll turn the sound on to find out what they're saying and that to this day. He doesn't do meetings. You spent a lot of time with him. What most surprised you about him as you were writing this book? The most surprising thing to me, you know, he chose me to write the book as a financial analyst, and I'm a woman. And I sort of assumed, I knew he preferred women journalists, but I knew that my research and analytical skills played a role. But I also just assumed that he sort of liked raconteuring to women, and I didn't understand the relationship between him and women. The big surprise was to see how he turns the women around him into these maternal figures. And that a man who was 26 years older than me would be sort

of relating to me like a kid. It was really interesting. And this is true with, you know, all the women around him. And I had to really resist it as an author because, you know, A, I'm not his mother, and B, you know, I was there to report and to be objective. But, you know, he didn't have a great childhood, and he didn't have the kind of mother that you'd want. And so he's sort of always looking for that. And he's quite vulnerable. That was a big surprise. Do you think that's the biggest misconception about him? His vulnerability? I, you know, I think in the personal side, yes. On the business side, I think the biggest some misconception about him, is that he's a quote, buy and hold forever investor. And, you

know, he's never said that. But people take little snippets of slices of things that he said, and they sort of turn them into mantras or slogans. And so I think that people have made a mistake a couple of times of pulling like a few words or a sentence or two here and there and treating that as an all-weather investing technique, and it doesn't really work because Warren himself is quite opportunistic, and he does trade, and he does adapt. And so, you know, anybody who thought that you could sort of buy four or five big cap growth stocks at a fair price, and then you could just sit back and just go to sleep, I mean, that's not worked out very well, and, you know, he would be the first to say so. Let's get back to the snowball that Warren Buffett is pushing. Where

do you think he's pushing it next? Where do you think he's going over the next couple of years? Well, one time I went out to dinner with him at Garatz, and a woman, Marge Loring, who was the widow of one of his earliest partners, came by and said hello, and I met her for the first time. And after she left the table, he said to me, that woman is the reason I run Berkshire Hathaway by the way I do, because her entire finances depend on me. Every dime she has is in Berkshire Hathaway stock. He said, I am trying to run Berkshire so that for a generation after I'm gone, it will still be healthy and fundamentally a sound company. He said, I can't,

you know, beyond that, there's really not much I can do, but I can try to set it up so that the businesses that Berkshire buys and the way its capital is structured and the fundamental pieces of Berkshire have enough longevity to carry on. And there's no guarantees, but that's what I'm trying to do. What I believe that he's doing now, you know, his career could last another 10 years, it could last two years, it could last, you know, who knows. But, you know, it's clearly a year closer to the end now than it was a year ago. I believe that he is always looking at the risk profile of Berkshire Hathaway, and trying to take out risk, build in conservatism, make sure that the assets are accounted for in a way that they're not going to end up later being worth less than

they appear to be on the books. And, you know, in effect, create that thing that isn't a perpetual motion machine, but that will keep going. He likes to say that a cardboard cutout should be able to run the company. That's an unattainable ideal, but he really wants people to look at it after he's gone and say, this man created something sustainable. Alice Schroeder is the author of The Snowball, Warren Buffett and the Business of Life. It's now available in paperback. Coming up, Matt Ridley answers questions like, are things really getting better? How close are we to a cure for Alzheimer's? And what does the future hold for robot maids? Stay tuned, you're listening to Motley Fool Money.

I ask the rich man, he'll confess, money can't buy happiness. Welcome back to Motley Fool Money. I'm Chris Hill. Matt Ridley is the author of The Rational Optimist, How Prosperity Evolves, and he joins me in studio now. Matt, welcome. Nice to be here. So, there's a lot of pessimism out there, but you say the world is getting better. I don't want to be Johnny Raincloud, but why do you say that? Well, I take the big view, the long view.

And if you look, in my lifetime, we've trebled income around the world. Per capita income is up threefold. We've cut infant mortality by two-thirds. We've halved poverty. We've increased per capita food availability. We've changed lifespan. We're living five hours longer every day. These are the sort of big trends that are happening as a result of the spread of prosperity to Asia and other countries.

And they're continuing whatever events happen along the way that kind of knock it off course in individual countries. And I don't see any reason why that won't continue. In fact, because of the Internet, which is a forum for people to exchange ideas on second to none, I think it's going to accelerate. I see no reason why it can't. I have to focus on the title of your book, The Rational Optimist. Has it been your experience that optimism is seen as being inherently irrational? that's part of the purpose of the title yes the other purpose is to point out that i'm a rational optimist who's arrived at it by reason rather than a sort of instinctive um uh you know i feel good kind of optimist i'm not telling people to be personally optimistic about their lives necessarily i'm just saying look you know look at the planet look at the situation of the human race and don't tell me it's all going to go wrong um immediately because if you look at what people

say they intellectuals have been saying for 200 years well it's been okay so far but it's about to go horribly wrong every generation says it stands at a turning point in history and that you know they've fallen like the man who fell falls out of the skyscraper and as he goes past the 10th floor he says so far so good and you talk to a lot of people in the intelligentsia particularly and that's the way they feel about the current generation they say well we've had it good, but our children are about to have it bad. I've looked at the data and I don't conclude that. You're right that to say things are about to get worse sounds wise. And John Stuart Mill said, the man who despairs when others hope is regarded as a sage. I don't know why that is,

but it's true. Well, and we also see that in the stock market, just in the basic lexicon where every once in a while there will be a market correction. It's only referred to a correction when the market goes down. The market never corrects upward. I don't know if that's something that you've ever noticed as well. That's a very nice euphemism. I hadn't thought about that. What does the rational optimist make of the recent financial crisis? Well, I think what generally happened across the Western world in the last five or six years was that we overborrowed. I mean, it's as simple as that, isn't it? You can then go into why and who and where. But in the end, I mean, human beings can borrow against the future because the future

is richer and it can afford to pay it off. And if you borrow against the future and invest in the things that are going to make the future richer, then fine. So, you know, in that sense, the Ponzi scheme can work for humanity indefinitely. But it's clear that a lot of us overdid that in the 2000s for, you know, all sorts of reasons that, you know, there was plenty of blame to spread around. And, you know, I take, I'm not especially optimistic about the immediate prospects for my country, the UK, or yours, the United States, because there is, you know, there's a lot of debt around our neck that we have to work out how to pay off. There's a lot of commitments to retired people from future working populations, etc, that are not necessarily sustainable. So all

of these are issues. But the things that make people richer is the progress of technology and innovation, which enables each of us to serve each other with some goods or services. And that's continuing. You know, those processes of innovation haven't stopped just because the recession and the debt crisis has happened. You're listening to Motley Fool Money. We're talking with Matt Ridley, the author of the new book, The Rational Optimist, How Prosperity evolves. One of the things that you write about and some of your optimism is rooted in the ultimatum game. For those who don't know it, could you explain the ultimatum game for us? It's a wonderful game in which two players are playing with real money. And essentially what

they what one has to do is offer the other a share of what he's been given. And the other player can say thank you very much i'll accept the share or he can say i'm going to reject that share and in that case neither of them get anything okay the money's taken off the table if that happens so the question is should how much should the first guy offer well rationally you should offer if you're given ten dollars you should offer less than one because the guy can't he's still going to be a dollar better off he's not going to make himself better off by refusing but of course most people if they're in the second player's shoes find that pretty insulting And so what this game does is it enables you to see the degree to which people have sort of rational, enlightened self-interest that enable them to realize that generosity pays dividends here and that people are going to punish selfishness and so on.

And they've taken this game out, people like Joe Henrich and colleagues have taken this game out to small-scale societies all around the world, hunter-gatherers and early agriculturalists who are not embedded in market economies, to try and work out whether they play by the same rules. And the interesting conclusion is that the more exposed to commercial markets people are, the more generous they are in this game. Exposure to the ordinary process of commerce tends to lead you to realize that actually you have to put something on the table for other guys if they're going to come back and do deals with you. One of the things you also write about is that on balance, people are good at deciding who to trust. That was surprising for me to learn, again, in the wake of the financial crisis that we had. And you mentioned the Ponzi scheme earlier, obviously with the Bernie Madoff Ponzi scheme. It seems like there's certainly anecdotal evidence that people aren't that good at deciding who to trust. Yeah, that's a very good point.

And, you know, maybe the difference is whether you get face-to-face with people, because the experiments I'm talking about are ones in which people go into a room and mingle for 30 minutes not really knowing why they're doing and talk to each other and then they are asked if you're going to play a Prisoner's Dilemma game

with these guys do you think they will be cooperative or defecting? Will they be nice or nasty as it were? And their scores are noted and then they play the game and they find out whether they were right or not and people are remarkably good. After 20 minutes conversation

you know whether this guy's likely to be a cooperator in the prisoner's dilemma game. Not perfectly, but to some extent. Now, you know, maybe when you're investing, that's what the face-to-face thing is all about. If you don't get to see the fund manager who's going to be investing your money, then it's hard to make those kind of judgments. You're listening to Motley Fool Money. We're talking with Matt Ridley, author of the new book, The Rational Optimist, How Prosperity Evolves.

What surprised you the most when you were researching and writing this book? The thing that surprised me the most was these macro trends about how the world is improving. I mean, one of the subjects that people kept saying to me you can't be optimistic about was Africa. And they would say, well, yeah, you know, China's had a boom, but that can't happen in Africa, can it? I mean, Africa's sunk into poverty. There was no way of getting it out. The population explosion, the weather, the climate, the diseases, the wars, blah, blah, blah. But when you drill down beneath the surface and you look at Africa and you look at some countries and others, you find extraordinary things going on.

You find Rwanda turning around after that appalling genocide and becoming a high-end coffee exporter. You find Botswana having the fastest economic growth of any country over the last 20 years. You find mobile phones transforming ordinary farmers' lives in Africa because they can call ahead and work out which market to take their produce to. You find mobile phone banking, all these kind of things happening. And you find the poverty rate in Africa is actually falling pretty fast now, all across the continent. The AIDS epidemic was terrible, but it's now in retreat in most countries in Africa.

And so life expectancy, which had been falling in the 90s because of AIDS, is now going up again. So I was amazed to find that not even Africa, in the end, challenged my optimism. I think in 20 years' time, with its demographic dividend, i.e. falling birth rates, but a large working population, not a very large old population, Africa's going to have the same sort of boom conditions that China did 20, 30 years ago. Parts of it, anyway. You're listening to Motley Fool Money. We're talking with Matt Ridley, author of The Rational Optimist, How Prosperity Evolves.

All right, before we let you go, we've got to do a quick round of buy, sell, or hold. So let's start with buy, sell, or hold, a manned trip to Mars in the next 10 years. Sell. I don't think that's going to happen. Too expensive, too difficult. We've got a recession on, in case you hadn't noticed. I heard a little something about that. Buy, sell, or hold, a cure for Alzheimer's in the next 10 years.

Buy. Really? I've seen some very interesting research in Cambridge and other places about getting to grips with what these diseases like Alzheimer's are. And, you know, it's all about the solubility of proteins inside the cell and so on. And there are some quite low-tech things that people are going to be able to do in terms of diet, I suspect. But I suspect there will also be drugs. You know, a total cure for all Alzheimer's, maybe not, but the beginnings of cures for some forms of it, yes. The Jetsons had one.

Most people want one. Buy, sell, or hold. Robot maids. Sell. They've been predicted forever. It's a kind of 1950s fantasy. and I just, well, okay, no, maybe it's a hold because I don't think they're going to sort of walk around

and have two legs and things like that but I think there are going to be all sorts of sort of self-cleaning devices in the home. There's that vacuum cleaner, the Roomba, isn't that what it's called, the Roomba? I'm getting a thumbs up from our producer, Matt Greer. Yeah, I mean, you just sort of set that thing loose in your living room and that just, it goes.

Yeah. I have a robot in my swimming pool at home, don't I? I guess so. You know, it trundles around all day. So, yeah. Okay. All right. Buy, sell, or hold. People living to be 150 years old 50 years from now. So, by 2060, are people going to be 150 years old? Buy, sell, or hold that. This is a tricky one. I mean, on the whole, I still believe that we're all going to get to the max but the max isn't going to increase much and the max seems to be by around 120 so i i would certainly buy most of us getting to 120 in 50 years time but i don't think i would buy

many people getting to 150 on the other hand everybody who's predicted where the limit on human longevity is has been wrong so far it just keeps exceeding expectations so i let's say hold The book is The Rational Optimist, How Prosperity Evolves. It is available everywhere. Matt Ridley, thanks so much for being here. Thank you very much for having me on the show. As always, people on the program may have interests in the stocks they talk about. Don't buy or sell stocks based solely on what you hear. Coming up, a conversation with Pulitzer Prize-winning humor writer Dave Barry. Stay right here. You're listening to Motley Fool Money. Welcome back to Motley Fool Money. I'm Chris Hill.

For more than 20 years, Dave Barry wrote a weekly humor column for the Miami Herald and in the process won a Pulitzer Prize for commentary. He's the author of more than 30 books, including his latest, I'll Mature When I'm Dead, Dave Barry's Amazing Tales of Adulthood. He joins me from his home in Coral Gables, Florida. Dave, thanks for being here. Thanks for having me. Now, as you know, the newspaper industry is in trouble.

Papers are losing subscribers. That includes our local paper here, the Washington Post. But it seems like you have a solution because one of your chapters is entitled, A Practical Workable Plan for Saving the Newspaper Business. How are you going to save the Post and other papers? Apparently, you didn't read the subtitle of that chapter, which is, I sure don't have one. I was talking in that chapter about what happened to the newspaper business. Let's just give you a little timeline here. I stopped writing a column The newspaper industry went down the toilet

Coincidence? I don't think so That sounds like cause and effect to me To me, yeah, too But I think the big problem is that The internet, have you heard about it? I've heard a little something about it It's a series of tubes, isn't it? I think it is

And if I were advising investors I would tell them they should buy stock in the internet Because I think it's going to be huge But anyway, it turned out that And I don't want to get too technical But a lot of people turned out They would prefer to get their news for free, as opposed to paying for it.

Whoa, whoa, whoa. Slow down. Hold on with the numbers, Copernicus. Run this by me again. This really was a poser to the people running the newspaper business, who unfortunately are English majors. That's probably the biggest lesson we learned from this whole thing. Never let English majors run anything.

And when they were basically a monopoly, which was the situation for most of my journalism some career. Even English majors were able to make money in the newspaper business when they were a monopoly. But as soon as they were faced with any kind of a complicated challenge, like, huh, there's this competition coming along. Should we give our content away for free or not? Yeah, let's see if that works. And they started giving away for free. And then, of course, nobody wanted to pay for it anymore. You're listening to Motley Fool Money. We're talking with Dave. Wait, I am? Oh, you're talking to them. Okay. Exactly. This is for the listeners, Not for you, Dave.

Am I allowed to talk to the listeners or only to you? Only to me. Okay. What do you think is the biggest mistake people make when they are writing for humor or attempting to write for humor? Well, a lot of the time, and this is going to sound awfully self-evident, but it's not. Maybe it's self-evident as it sounds. A lot of times when people write humor, it's not funny. You're right.

That did sound self-evident. And, but what I mean by that is I get a lot of, I mean, I've always, I've always said this, if you don't, the only way you can tell if something's funny is to give it to somebody else, not your mom. And if that person thinks it's funny, then you can argue it's funny. What you cannot do, but which people try to do, is say, this is funny. I know it is. You know, if you don't laugh, it's because you don't, you know, you're not, you're not

a good enough reader or whatever. And you can get away with that a little bit. I mean, some people think some things are funny and some, but you can't sort of generally state that something's funny if people aren't laughing at it. So I tell people if they want to become humor writers that they need to ask people who are reasonably objective if they think it's funny and get an honest answer and not ignore the answer, which I think a lot of people do. Other things that people do that makes humor not work so well, they tend to take one joke and beat it completely to death. The rule should be make the joke and get out. Go on to the next joke or stop.

But don't keep overstating, restating the same basic humor premise, which even good humorists do sometimes. I was just going to say, this is interesting advice from someone who seems wed to the word booger, the way you've been over your career. Well, I'm not saying I follow any of this advice. I'm just giving it out here. And besides, I think people overstate the extent to which I use the word booger. It's probably only one or two times per page. There you go. There you go. And it's only come up a couple of times in this interview.

So far, I think you brought it up. You're listening to Motley Fool Money. We're talking with Dave Barry. Dave Boogerberry. Dave Boogerberry. His new book, I'll Mature When I'm Dead, Dave Barry's Amazing Tales of Adulthood. All right, Dave, time to delve into our buy, sell, or hold game. I'll spot you up with a person, place, a thing. You tell me, if it was a stock, would you be buying, selling, or holding? And let's start with, he just left the Republican Party and will run for Senate as an independent.

Buy, sell, or hold Charlie Crist. I would sell him. I think, you know, I've watched Charlie for a while down here, and he's a chameleon-ish. I'm not sure he's a human being. Have you ever looked at the color of his skin? He has the same color skin as a traffic cone. So I think he may end up just like, you know, eventually he'll decide to go back to whatever planet he originated on and maybe run for office there.

Buy, sell, or hold Facebook. I don't know. See, I don't like Facebook very much. I was on it for a while, and all that happened was people I knew in junior high school wrote me letters asking me if I would send them a free book. So I'm going to say sell Facebook. Besides, something else will come along and replace it. And finally, you've been somewhat critical of his music, buy, sell, or hold Neil Diamond.

Well, I'm not going to say anything bad. I almost got killed by Neil Diamond fans once because I made fun of the song um i am i said when when neil sings like with a great intensity and sincerity i am i said to no one there and no one heard at all not even the chair you know and my my feelings like well no no kidding neil you know i imagine it the table didn't pick up on it either you know because like these are these are items of furniture um so i wrote a column saying that you know somewhat critical of neil diamond now and man you think salman rushdie got in trouble i got i got the most hateful hate mail i think i've ever got you know it's like had actual spit still dripping off

of it from from the anger and things like how dare you criticize this man mr barry uh neil diamond is the greatest artist he's the greatest singer i listened to heartlight 14 times and it cured Mike Goiter, Mr. Barry, you know, so so now I realize that was wrong, and I love Neil, and if any Neil Diamond fans are listening, please, I love him, leave me alone, don't come to my house.

Thank you. To no one there And no one heard at all, not even the chair That wraps up this edition of Motley Fool Money. Motley Fool Money is produced by Matt Greer. Our engineer is Steve Broido.

I'm Chris Hill. Thanks for listening, and we'll see you next week.