I would like to point your eyes to this article: Cash No Longer King as Stock, Asset Swaps Drive Takeovers.  This is another sign that equity valuations are getting high.  When equities are cheap, corporations part with cash to buy other corporations and assets.  When equities are rich, corporations use them as a currency to buy assets.  After all, it is a lower risk way to do things, because paying cash raises the leverage of the combined enterprise.

When acquirers are certain they pay cash.  When they are not so sure, they pay with shares.

As such, this is another indicator that equities are expensive relative to cash.  That’s all for now.

9780385495387This is an unusual book for me to review.  This is a book about Confidence Men, first published in 1940, and recently republished in 1999.  It was written by David W. Maurer, who was a professor of linguistics, and used his skills to analyze the slang of the underworld.

This book deals with Con Men — men who try to gain the confidence of another man in order to get him to hand over money to them.

I have often said, and many grifters would agree, that it is very hard to cheat an honest man.  Honest men know that there are no easy pickings in life, and if there are some holes in the system, no one will share them with you for free.  Grifters trick those who think that the world is unfair, and want to be cut in on the inside action.

Sam Israel was tricked in that way in the book “Octopus.”  Clever actors convinced him that there was easy money to be made, and they milked him and his hedge fund clients, while he lost it all.

This book takes you through the human systems that con men create in order to convince their targets that they can make easy money, until the con men fleece them.  The two key characters are ropers, who attract victims, and the insiderman, who is the boss and is the one who directs the whole scam.

They design a system that delivers a few small wins to the victim, who gets greedy and puts up a lot of money, and then the rigged system delivers a loss, cheating him of his money.  Mot often, since the victim was an willing participant in an illegal scheme, even though he was cheated, he will not be willing to press charges, even though was cheated, because he wants to protect his reputation.

The book describes the many players involved as actors, to make the enterprise look legitimate.   It also describes the games that they played, and how they would entice a victim into an unfair scheme in which they would profit off others, but end up cheating the victim.  The book talks about how the justice system was often bought by the insiderman, thus protecting the activities of those he employed.

It also describes how the ropers would figure out whether a victim would go along with a scam or not.  It gives the history of confidence games — how they developed, and how some faded, and others grew, at least for a time.

Along with all of that, it describes the lives of the grifters, and how few of them truly prospered.  Most wasted the money that they earned in riotous living. As Proverbs 13:11 says, “Wealth obtained by fraud dwindles, But the one who gathers by labor increases it.” [NASB]

To the Modern Era

Breaking from the book review, is our era so much different, or do we have the same problems in different ways?

I’ve been down enough roads in the investing world to know that there are a lot of parties who try to get people to take bad deals.  It can be as simple as guys who use the “straight-line” pitch to get people to invest with them.  It can be institutional investors who try to trick naive institutions.

It can be seminars with shills and other accomplices like Rich Dad and their ilk.  We still have Nigerian Scams and other Scams on the Internet, many of which involve identity theft.  We have promoted penny stocks, structured notes, and Ponzi schemes.  I have written about all of these.  Is the current era less prone to con men than the era from 1890-1940?

I would argue no, though it was more colorful and personal in the past.  Today’s scams are more virtual and anonymous, leaving aside Madoff’s Ponzi Scheme which was highly personal, and psychologically design to harvest money from those that wanted a high yield with safety.

Why you should consider this book

By reading about all of the ways that people get cheated, you will be deterred from greed, and distrust those who incite greed.  These problems are alive and well today.  Can you learn that there are no free lunches, and no free money?  If you can learn that, you are well on the way to not being cheated.


The book is repetitive.  It does not condemn the grifters for the sins they commit against others.  The book is almost amoral.  At least, it posits a human morality, where there is a code of honor among thieves, but thievery is not in itself wrong if the victim is a greedy person.


This is a classic book that if you read it should make you more skeptical about “sure things,” and “get-rich-quick schemes.”  Away from that, it is a commentary on the human condition, showing how many men are willing to compromise their ethics in order to make a lot of money.  Anyway, if you want to, you can buy it here: The Big Con: The Story of the Confidence Man.  It’s not expensive for what you get, and it is a colorful book.

Full disclosure: I bought a copy with my own money.

If you enter Amazon through my site, and you buy anything, I get a small commission.  This is my main source of blog revenue.  I prefer this to a “tip jar” because I want you to get something you want, rather than merely giving me a tip.  Book reviews take time, particularly with the reading, which most book reviewers don’t do in full, and I typically do. (When I don’t, I mention that I scanned the book.  Also, I never use the data that the PR flacks send out.)

Most people buying at Amazon do not enter via a referring website.  Thus Amazon builds an extra 1-3% into the prices to all buyers to compensate for the commissions given to the minority that come through referring sites.  Whether you buy at Amazon directly or enter via my site, your prices don’t change.


Let’s roll the promoted stocks scoreboard:

TickerDate of ArticlePrice @ ArticlePrice @ 6/27/14DeclineAnnualizedSplits


My, but aren’t they predictable.  Onto tonight’s loser-in-waiting Windstream Technologies [WSTI].  This is another company with negative earnings and net worth, though it has a modest amount of revenue.

Think of it for a moment: this company has a “breakthrough technology,” and yet they were a hotel company within the last year or two.  That’s not how real businesses work.  I you have an incredible technology, but little capital, private equity investors will happily fund you.  You won’t try to do it in some underfunded corporate shell which tempts crooked financial writers to write fantasy.

Now, you might look at the disclaimer in the glossy brochure which came to my house, which in 5-point type takes back all of things that they about in bold headlines and readable text.  For example:

  • The Wall St. Revelator is neither licensed nor qualified to provide financial advice. As such, it relies upon the “publisher’s exclusion” as provided under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws.
  • The Wall Street Revelator and/or its publisher, Andrew & Lynn Carpenter, dba The Wall Street Revelator has received a total amount of twenty five thousand dollars [DM: $25,000] in cash compensation to assist in the writing of this Advertisement, as well as potential future subscription and advertising revenues, the amount of which is not known at this time with respect to the publication of this Advertisement and future publications.
  • Mandarin Media Limited paid nine hundred thousand dollars [DM: $900,000] to marketing vendors to pay for all the costs of creating and distributing this Advertisement, including printing and postage, in an effort to build investor and market awareness.
  • Mandarin Media Limited was paid by non-affiliate shareholders who fully intend to sell their shares without notice into this Advertisement/market awareness campaign, including selling into increased volume and share price that may result from this Advertisement/market awareness campaign.
  • The non-affiliate shareholders may also purchase shares without notice at any time before, during or after this Advertisement/market awareness campaign.
  • Non-affiliate shareholders acted as advisors to Mandarin Media Limited in this Advertisement and market awareness campaign, including providing outside research, materials, and information to outside writers to compile written materials as part of this market awareness campaign.

The disclaimer exists to cover the writers from legal risk, and what it tells us is that there are largish shareholders looking to profit by running up the stock price as a result  of the advertisement, enough to cover the $925,000 cost.

Such it is with a pump and dump.  One thing is virtually certain, though.  This is not a stock to hold onto.  Look at the stocks in the table above.  No winners, and most are almost total losses in the long run.  Manipulators love working with stocks that have no earnings and no net worth, because they are impossible to value for the grand majority of people.  New buyers, if they come in a group, can create a frenzy that raises prices.

That’s the goal of the advertising campaign: a short term “pop” that the sponsoring shareholders can sell into, letting a bunch of muppets take losses.

Again, never buy promoted stocks.  If they have to buy the services of others to promote the stock, it is a fraud.  Good stocks do not need promotion.  It’s that simple.

PS — the pretentiousness of the word “revelator” should be replaced by the simpler “revealer.”

Is price inflation growing?  I see three data points, amid slow nominal growth:

  • Japan
  • US
  • Crude Oil prices have been rising, amid the relaxation of exports in the US, and weak global demand.

This is early, but I have adjusted my bond portfolio to reflect this last month, buying some TIPS.

This is not worthy of full action, but it is interesting to see the three above rising at the same time.  That’s all.

I am grateful that risk managers inside banks have more clout these days.  That said, I want it to persist, and the best way to do it is to have risk managers beholden to an ethics code, like actuaries or CFAs.

This is valuable, because the risk manager can point to a body of ethics that says to his manager, “I am sorry, but those of my discipline say that this action is unethical,” when line managers complain that the risk manager is killing business by insisting that certain risk standards should be maintained.

Actuarial risk models cover the life of the business, unlike Wall Street models that measured risk in terms of days.  Cash flows mater, and the ability to meet the demand for cash matters.  Long-term risk models tend to surface risks better than short-term models because an intelligent businessman can ask what are the odds that we will have a crisis over the duration of our existing business?

Once on a task force of the Society of Actuaries, when discussing non-traditional actuaries going to Wall Street, I said, “Great idea, but the line managers will eventually kill anyone that gets in their way.  They don’t want people who have an ethics code.  It inhibits business.”  After that, there were some nervous chuckles on the phone, and the conversation moved on.

Ethics codes are needed when the disparity of knowledge between the designers and ultimate consumers/investors/regulators is so great that there are many ways that the consumers/investors/regulators could be cheated.

My view is controversial but simple.  Every professional in investing and finance needs to have an ethics code, making them more sensitive to their clients.  The easy solution is that every investment/finance professional needs to hold a CFA charter.  The three exams are pretty minimal, and can be passed by most people with some study.  Give the actuaries a pass, their exams are far harder — far, far, far harder.

But set some boundary for ethics and examinations of competence, to clean up finance and send the flim-flam men to the edges of the market, where they belong.



As for my portfolio, June was looking pretty good, then yesterday happened.  Worst relative performance day in 2 years.  The US Government announced that it would allow the export of partially refined crude oil, and US refiners got hit.  Two articles:

Sadly, this hits a concentrated area of my portfolio, which has a concentration in oil refiners.  That concentration has benefited my clients in the past.  So what to do now?


I do nothing.  I find many refiners, particularly those that I own, to be attractive at present levels, and at slightly lower levels, I will start to buy more of the refiners.

I knew this issue was out there, and I think the reaction was overdone, as said Fadel Gheit:

Oppenheimer’s Mr. Gheit said the selloff in refiners’ shares is an overreaction, but added that the news has increased investors’ focus on the sector. “My phone hasn’t stopped ringing today,” he said.

“The market is extrapolating this one step to mean this is a prelude to lifting the oil-export ban,” he added. “It’s a knee-jerk reaction, on a very little bit of information.”

The correct reaction to most sudden market moves is nothing.  Sit back, and analyze what the opportunity is relative to current prices, and if you conclude that your opportunities are markedly worse at current prices, sell some.  If opportunities are better at current prices, buy some.

I suspect I will buy more of the refiners over the next month, and I think I will do well with the position.  Refiners are less cyclical than they used to be, and their low valuations are unwarranted.  Also remember, many of these refiners have significant hedging operations; they are not just floating at spot.

So I do nothing at present, and I am not crying, nor compelled to action after a bad relative performance day.

My comments this evening stem from a Bloomberg.com article entitled Bond Market Has $900 Billion Mom-and-Pop Problem When Rates Rise.  A few excerpts with my comments:

It’s never been easier for individuals to enter some of the most esoteric debt markets. Wall Street’s biggest firms are worried that it’ll be just as simple for them to leave.

Investors have piled more than $900 billion into taxable bond funds since the 2008 financial crisis, buying stock-like shares of mutual and exchange-traded funds to gain access to infrequently-traded markets. This flood of cash has helped cause prices to surge and yields to plunge.

Once bonds are issued, they are issued.  What changes is the perception of market players as they evaluate where they will get the best returns relative expected future yields, defaults, etc.

Regarding ETFs, yes, ETFs grow in bull markets because it pays to create new units.  They will shrink in bear markets, because it will pay to dissolve units.  That said when ETF units are dissolved, the bonds formerly in the ETF don’t disappear — someone else holds them.

But in a crisis, there is no desire to exchange existing cash for new bonds that have not been issued yet.  Issuance plummets as yields rise and prices fall for risky debt.  The opposite often happens with the safest debt.  New money seeks safety amid the panic.

Last week, Fed Chair Janet Yellen said she didn’t see more than a moderate level of risk to financial stability from leverage or the ballooning volumes of debt. Even though it may be concerning that Bank of America Merrill Lynch index data shows yields on junk bonds have plunged to 5.6 percent, the lowest ever and 3.4 percentage points below the decade-long average, the outlook for defaults does look pretty good.

Moody’s Investors Service predicts the global speculative-grade default rate will decline to 2.1 percent at year-end from 2.3 percent in May. Both are less than half the rate’s historical average of 4.7 percent.

Janet Yellen would not know financial risk even if Satan himself showed up on her doorstep offering to sell private subprime asset-backed securities for a yield of Treasuries plus 2%.  I exaggerate, but yields on high-yield bonds are at an all-time low:

Could spreads grind tighter?  Maybe, we are at 3.35% now.  The record on the BofA ML HY Master II is 2.41% back in mid-2007, when interest rates were much higher, and the credit frenzy was astounding.

But when overall rates are higher, investors are willing to take spread lower.  There is an intrinsic unwillingness for both rates and spreads to be at their lowest at the same time.  That has not happened historically, though admittedly, the data is sparse.  Spread data began in the ’90s, and yield data in a detailed way in the ’80s.  The Moody’s investment grade series go further back, but those are very special series of long bonds, and may not represent reality for modern markets.

Also, with default rates, it is not wise to think of them in terms of averages.  Defaults are either cascading or absent, the rating agencies, most economists and analysts do not call the turning points well.  The transition from “no risk at all” in mid-2007 to mega-risk 15 months later was very quick.  A few bears called it, but few bears called it shifting their view in 2007 — most had been calling it for a few years.

The tough thing is knowing when too much debt has built up versus ability to service it, and have all short-term ways to issue yet a little more debt been exhausted?  Consider the warning signs ignored from mid-2007 to the failure of Lehman Brothers:

  • Shanghai market takes a whack (okay, early 2007)
  • [Structured Investment Vehicles] SIVs fall apart.
  • Quant hedge funds have a mini meltdown
  • Subprime MBS begins its meltdown
  • Bear Stearns is bought out by JP Morgan under stress
  • Auction-rate preferred securities market fails.
  • And there was more, but it eludes me now…

Do we have the same amount of tomfoolery in the credit markets today?  That’s a hard question to answer.  Outstanding derivatives usage is high, but I haven’t seen egregious behavior.  The Fed is the leader in tomfoolery, engaging in QE, and creating lots of bank reserves, no telling what they will do if the economy finally heats up and banks want to lend to private parties with abandon.

That concern is also revealed in BlackRock Inc.’s pitch in a paper published last month that regulators should consider redemption restrictions for some bond mutual funds, including extra fees for large redeemers.

A year ago, bond funds suffered record withdrawals amid hysteria about a sudden increase in benchmark yields. A 0.8 percentage point rise in the 10-year Treasury yield in May and June last year spurred a sell-off that caused $248 billion of market value losses on the Bank of America Merrill Lynch U.S. Corporate and High Yield Index.

Of course, yields on 10-year Treasuries (USGG10YR) have since fallen to 2.6 percent from 3 percent at the end of December and company bonds have resumed their rally. Analysts are worrying about what happens when the gift of easy money goes away for good.

With demand for credit still weak, it is more likely that rates go lower for now.  That makes a statement for the next few months, not the next year.  The ending of QE and future rising fed funds rate is already reflected in current yields.  Bloomberg.com must be breaking in new writers, because the end of Fed easing is already expected by the market as a whole.  Deviations from that will affect the market.  But if the economy remains weak, and lending to businesses stays punk, then rates can go lower for some time, until private lending starts in earnest.


  • Is too much credit risk being taken?  Probably.  Spreads are low, and yields are record low.
  • Is a credit crisis near?  Wait a year, then ask again.
  • Typically, most people are surprised when credit turns negative, so if you have questions, be cautious.
  • Does the end of QE mean higher long rates?  Not necessarily, but watch bank lending and inflation.  More of either of those could drive rates higher.

I’m not an advocate for smart beta.  There are several reasons for that:

  • I don’t pay attention to beta in the stocks that I buy; it is not stable.
  • The ability to choose the right brand of enhanced indexing in the short-run is difficult to easily achieve.
  • I’m a value investor, a bottom-up stock picker that doesn’t care much about what the index does in the short-run.  I aim for safety, and cheapness.

But today I read an interesting piece called Slugging It Out in the Equity Arena.  It talks about an issue I have been writing about for a long time — the difference between what a buy-and-hold investor receives and what the average investor receives.  The average investor chases performance, and loses 2%+ per year in total returns as a result.  As the market relative to the index is a zero-sum game, who wins then?

The authors argue smart beta wins. They say:

To us, the smart beta moniker refers to rules-based investment strategies that use non-price-related weighting methods to construct and maintain a portfolio of stocks.The research literature shows that smart beta strategies earn long-term returns around 2% higher than market capitalization-weighted indices. Moreover, smart beta strategies do not require any insight into the weighting mechanism. One can build a smart beta strategy with any stock ranking methodology that is not related to prices, from a strategy as naïve and transaction-intensive as equal weighting to a more efficient approach such as weighting on the basis of fundamental economic scale. For example, a low volatility portfolio and its inverse, a high volatility portfolio, both outperform the market by roughly 2%—as long as they are systematically rebalanced.2  It is not the weighting method but the rebalancing operation that creates most of smart beta’s excess return. Acting in a countercyclical or contrarian fashion, smart beta strategies buy stocks that have fallen in price and sell stocks that have risen.

When I read that, I said to myself, “That is a more intense version of my portfolio rule seven:

Rebalance the portfolio whenever a stock gets more than 20% away from its target weight. Run a largely equal-weighted portfolio because it is genuinely difficult to tell what idea is the best. Keep about 30-40 names for diversification purposes.

I learned this rule from three good managers — one growth, one core, one value.  They were all fairly rigorous in their quantitative analyses, but they all agreed, a 20% filter on target weight added ~2%/year to performance on average.  But unlike the current “smart beta” discussion, I have been using this idea for the last 15-20 years.

The mostly equal-weighting also induces a smallcap and value tilt, which is an additional aid to performance.  Since I concentrate by industry, the 30-40 stocks requirement does not lead to over-diversification, as a great deal of my returns comes from choosing the right industries.

In one sense, portfolio rule seven is an acknowledgement of mental limitations, and is an exercise in humility.  So things have been great?  They will eventually not be so.  As prices go up, so does fundamental risk.  Take a little off the table.  Raise a bit of cash.

Things have been bad?  Look at the fundamentals.  How badly have they deteriorated? This can take three paths:

a) Fundamentals have deteriorated badly, or I made an initial error in judgment.  I would not own it now, even at the current price there are much better stocks to be owned.  Sell the position.

b) Fundamentals are the same, a little better, or haven’t deteriorated much.  Rebalance to target weight.

c) Fundamentals are better and people are just running scared from a class of companies — not only rebalance, but make it a double-weight.  I only do this in crises, for high-quality misunderstood companies like RGA and NWLI in the last financial crisis.  Some of that is my insurance knowledge, but I have done it with companies in other industries.

For fundamental investors, who think like businessmen, there is value in resisting trends.  Having an orderly way to do it is wise.  Don’t slavishly follow me, but ask whether this fits your management style.  This fits me, and my full set of rules.  Modify it as you need, it is not as if there is one optimal answer.

I’ll close with an excerpt from the first article that I cited, which was its summary:

1.     Smart beta strategies are countercyclical, periodically rebalancing out of winning stocks and into losers. They may underperform for extended periods but they ultimately tend to prevail.
2.     Investors’ procyclical behavior, selling recent losers and buying recent winners, pays for the estimated 2% per year in long-term value added by smart beta strategies.
3.     Smart beta investing can be reasonably expected to have an edge as long as investors persist in following trends and chasing performance.

Are you willing to take the long-term view, meaning more than 3 years?  These ideas will work.  Focus on longer-term value, and do your analytical work.  And if you outsource your investing, be willing to allocate more to stocks during bad times.  To avoid really ugly scenarios, wait until the 200-day moving average has broken to the upside, of look at the 13Fs of value managers.

Do that and prosper.  Resisting trends intelligently can make money.

For anyone interested in learning more about Dan Washburn, author of The Forbidden Game,  you can consult his blog here.  Aside from that, you can read my Q&A with him here.  Hey, thanks for reading — I’m not a golfer, though I did it as a child, and was a caddy for some years.  It is a phenomenon is society, and should be understood.

Anyway, here is the Q&A.  In general, I say to authors that they don’t have to take all of my questions, and thus, you will see gaps in the numbers.  Here it goes:

1.       From the book Prisoner of the State, Zhao Ziyang, even while in captivity was allowed to go golfing.  Now, many in the Party distrusted Zhao because he had adopted too many Western habits and modes of thought.  Has golf been legitimized for Party members to partake in, so long as they aren’t too flamboyant about it? 

I don’t think so. Golf remains a taboo topic for China’s political elite, perhaps even more so now than in years past thanks to Xi Jinping’s ongoing crackdown on government corruption. Simply put, Chinese officials shouldn’t be able to afford to play golf in China. Their salaries are modest (last year, it was reported that President Xi’s annual salary is just $19,000) and golf in China is extremely expensive (it can cost $150, often more, to play 18 holes). So, while most Chinese assume that all government officials have other sources of income, playing golf on a regular basis would be a rather conspicuous admission of double-dealing. We all know some Chinese officials are filthy rich, and some indeed do play golf — but they still need to do so on the sly.


4.       In the US, golf is usually thought of as a rich man’s game.  Your book seems to indicate that it is also true in China, but is it more so, or less so than in the US?

Golf on average is much more expensive in China than in the United States. There are no public courses, per se, so you’re stuck having the pay a hefty fee to get on a so-called “private” course. Those on a budget usually stick to the driving ranges, which are often quite crowded.


5.       You got me to root for each of your main characters, Zhou Xunshu, Wang Libo, and Martin Moore.  It’s a much more interesting book as a result, than say a straight golf history of China book.  How did you settle on this structure of the book?  How many other characters did you try out before settling on these three?

That’s great to hear, David. I always envisioned this as a character-driven book, narrative non-fiction that keeps you turning pages like a novel. Originally, the book was going to focus solely on Zhou, with other stories related to golf’s development in China branching off from his underdog narrative. But eventually my editor and I decided, I think wisely, to add two more characters that readers could become invested in. The first people who came to mind were Martin and Wang. They were good people with very interesting stories to tell, and they allowed us to explore aspects of golf’s rise in China that Zhou on his own did not.


6.       Why did the Chus, running Mission Hills in China insist that they had to build the largest golf course complex in the world, not just once but twice?  Were they that way in all of their business dealings?

I’m not quite sure where the drive to be the biggest and best at everything stemmed from, but the Chus certainly weren’t alone. I recall at one point during my time in China that Shanghai had plans to be home to the world’s fastest train, the world’s tallest building, even the world’s largest ferris wheel. As China has emerged in recent decades, it has become a nation of superlatives. Mission Hills fits right in.


8.       As you wrote the book, what thing or things surprised you the most?

When I started covering golf tournaments in China in 2005, I knew little about the issues surrounding the development of the game there. But the more I dug, the more I realized that golf, and the complex world that surrounds it, is really a microcosm of China at the moment. The story touches on everything: the booming economy, the widening gap between rich and poor, rural land rights, environmental concerns, wild west development, and political intrigue. Golf, surprisingly, seemed to be perfect lens through which to view China during the first decade of this new millennium.


9.       Why did the book’s title change from Par for China, to The Forbidden Game?

It was a natural evolution. Par for China was always my working title, but the publisher really fell in love with The Forbidden Game, which was the title of a related story I wrote for Slate a few years ago. And it works on many levels. Golf was, in fact, forbidden in China for some 35 years after the Communists came to power (2014 marks the 30-year anniversary of the opening of modern China’s first golf course). Playing golf was also forbidden for Zhou when he worked as a golf course security guard. And today, building new golf courses is supposedly forbidden in China — and we all know how well that’s working.


10.   How long were you at work on the book?  6-8 years?

Yes, it’s been a labor of love. I first met Zhou late in the summer of 2006, and I found his story so fascinating I immediately started formulating a book in my mind. Of course, it took me another four years to actually sell the book, and a few more after that to write it. Those extra years allowed be to add a lot more depth to the story, though, so it all worked out in the end.


11.   How avid of a golfer are you?

I’m not. So, it’s a good thing this isn’t a how-to book. I took some lessons while in China, but quite honestly couldn’t afford to be an avid golfer there. Once I moved back to the U.S., all of my free time was spent writing. So, now that I have completed my golf book, now maybe I can finally take up golf!

forbidden-game-9781851689484_0 I’m not a golfer, but I really liked this book.  The charm of the book is that it takes us through the lives of three men, and a host of lesser characters, and shows us how the growth of golf in China shaped their lives.  Two of the protagonists are Chinese, and one American.

The American, Martin Moore, was a promising golf course designer who did increasingly well designing courses in the US, Thailand, and China.   He learned how to get things done amid demanding bosses and ambiguous regulation.  Is building a golf course forbidden or not?  What if we call it a “health club?”  What if many locals object to their land being expropriated?

He succeeded amid many obstacles.  The next protagonist, and the one who had the most dramatic success was Zhou Xunshu, a man who went from not knowing anything about golf — an industrial worker, a common man, to being a golf professional.  His efforts were significant, and he underwent many hardships as he pursued his dream.

Then there is Wang Libo, a man who gets displaced by his home getting taken from him to build a golf course, and he takes the opportunity and builds a store/bar/restaurant near the complex to profit from the opportunity.

Three engaging characters amid the ambiguity of changing regulations, and whether it was legal to build new courses or not.

You will learn a lot about China in the process… what it is like dealing with an all-powerful Party whose machinations are secret.  And yet, one where if enough people protest, you can’t do anything, even if you have all of the permits in place.

You will get a behind-the scenes look at creating the world’s largest golf course twice, and the ambition of those who wanted to see it done quickly.

You will also experience the Chinese Dream, as the book’s subtitle suggests… the dreams and goals of those who want to live a life similar to middle-class Americans, but all the more poignant, because the path to getting there is often unclear.

To those reading me at Amazon.com, please Google “Aleph Blog Washburn” and you will be able to read a special Q&A with the author that I will post after writing this post.

This was an enjoyable book to read, and I think most people would learn something from it.




This is a great book.  It will make a great gift to friends of yours who are golfers.  If you want to you can buy it here: The Forbidden Game: Golf and the Chinese Dream.

Full disclosure: The PR flack asked me if I would like a copy and I said yes.  She invited me to write a Q&A also.  Hey, look at the next post.

If you enter Amazon through my site, and you buy anything, I get a small commission.  This is my main source of blog revenue.  I prefer this to a “tip jar” because I want you to get something you want, rather than merely giving me a tip.  Book reviews take time, particularly with the reading, which most book reviewers don’t do in full, and I typically do. (When I don’t, I mention that I scanned the book.  Also, I never use the data that the PR flacks send out.)

Most people buying at Amazon do not enter via a referring website.  Thus Amazon builds an extra 1-3% into the prices to all buyers to compensate for the commissions given to the minority that come through referring sites.  Whether you buy at Amazon directly or enter via my site, your prices don’t change.