1. “Between my horrible poker play and the ’29 stock market crash, it took many years to gain the smarts to keep my investing simple.” Groucho learned some hard lessons in 1929. The author of the book New World Coming: The 1920s and the Making of Modern America points out that prior to the crash, the investing world seemed quite easy to Groucho. He was very involved in selecting stocks for his portfolio and traded often: “Groucho Marx went to his broker’s branch office in Great Neck out on Long Island every morning after breakfast, to follow the ticker and gloat over his good fortune.” A National Public Radio exchange between two professors knowledgeable about the famous comedian relates to Groucho’s attitude and behavior prior to that crash: Professor Smith: “After Groucho finished filming each scene, he’d call his broker. Groucho had stuffed all of his money into stocks.” Professor Klein: “He became just your classic innocent investor. Every day he’d go in and he’d look on the big board and he’d see that he had made several thousand dollars without lifting a finger. And he thought, ‘well, this is easy.’” Groucho lost what at the time were very large sums of money when the crash finally came.
Groucho was traumatized emotionally by the crash. The web site for the TV show Biography even claims: “His hectic schedule and his enormous financial loss in the 1929 stock market crash had taken a toll on the performer and left him with a lifelong struggle with insomnia.” I have certainly seen people irreparably altered by a big loss including losses in the Internet bubble. Some people recover from a big loss better than others. At least Groucho worked in a business where people could earn a living during the Great Depression.
“In the 1950s Groucho was invited to take a tour of the New York Stock Exchange. While in the observation booth, he grabbed the public address system handset and began singing “Lydia the Tattooed Lady”. Upon hearing silence coming from the trading floor, he walked into view, was given a loud cheer by the traders, and shouted, ‘Gentlemen, in 1929 I lost eight hundred thousand dollars on this floor, and I intend to get my money’s worth!’ For fifteen minutes, he sang, danced, told jokes, and all this time, the Wall Street stock ticker was running blank.”
Groucho is not the only investor to learn a lesson about the futility of speculation the hard way. Both Ben Graham and John Maynard Keynes had similar periods in their lives in which they tried to speculate in the market with disastrous results rather than invest.
2. Groucho was once walking around the New York Stock Exchange when one of the traders on the floor asked him: “Groucho, how do you invest your money?” Groucho answered: “All in bonds.” The trader asked: “But Groucho, they don’t pay much return.” Groucho said: “They do when you have a lot of em!” My grandfather went through the crach of ’29 and Great Depression and like Groucho. He also liked bonds and government insured savings accounts even though he became quite prosperous from investing in real estate. Groucho died with an estate worth about $2 million which do he was, as they say, “comfortably rich.” Which reminds me of a joke often told by Henny Youngman: A car hits a Jewish man. The paramedic rushes over and says, “Are you comfortable?” The guy says: “I make a good living.”
3. Groucho: Do you know that property values have increased 1929 to 1,000 percent? Unidentified Woman: You told me about this yesterday. Groucho: I know, but I left out a comma.” You can imagine how many brokers tried to sell Groucho investments. Prior to the crash Groucho made the mistake of investing on stock tips including one from an elevator operator to buy United Corporation. Groucho also bought Goldman shares based on a tip from Eddie Cantor. Which reminds me of a story: Groucho once said to a woman who had 22 children: “Why so many children?” ‘Well, I just love my husband,’ answered the woman. Groucho replied: “I love my cigar, but I take it out of my mouth once in a while.”
4. “What do you think the government does with your [tax] money? Spends it on a woman? Gets drunk? Or plays the ponies? That’s what you might do with the money, or if you have to get personal, what I do.” Groucho actually wrote a book on income taxes. He was quite proud of that fact. Lee Siegel, the author of Groucho Marx: The Comedy of Existence, once told an interviewer on NPR: “The conventional image of Groucho was that he was on the side of the little guy, and he spoke defiantly and insolently to powerful people and wealthy people. My feeling is that Groucho was out to deflate everybody — that he was a thoroughgoing misanthrope.” ”
5. “I worked myself up from nothing to a state of extreme poverty.” How does it feel to be rich and famous Groucho? “Good. I like money. I support a lot of people I don’t have to.” Marx’s father never had much success as a tailor. The Marx family struggled financially so Groucho’s mother became a stage mom, pushing he kids into show business. This Groucho quote reminds me of a joke by Jackie Mason: “My grandfather always said, ‘Don’t watch your money; watch your health.’ So one day while I was watching my health, someone stole my money. It was my grandfather.”
6. “I made a killing on Wall Street a few years ago. I shot my broker. And not a moment too soon. He was about to commit suicide.” You probably already knew that joke and probably know this one too: A man calls his broker, who tells him that he’s got a hot new stock pick. ‘Buy it, buy it,’ the man says. The next day he calls the broker for an update – the stock is up 5% ‘Buy it, but it, the man says. The next day he calls the broker again, and the stock is up another 5%. ‘Buy some more, buy some more,’ the man says. He calls the broker again the next day, who tells him the stock is up 10%. ‘Sell it, sell it,’ the man says. The broker answers: ‘To whom?’”
7. “Money will not make you happy, and happy will not make you money.” This Groucho quote reminds me of a story: Two guys are walking down the street when a mugger approaches them and demands their money. They both grudgingly pull out their wallets and begin taking out their cash. Just then, one guy turns to the other and hands him a bill. “Here’s that $20 I owe you,” he said.
8. “Groucho: That’s what I always say: love flies out the door when money comes innuendo.” Which reminds me of another joke. Saul is working in his store when he hears a booming voice from above: “Saul, sell your business.” He ignores it. It goes on for days. “Saul, sell your business for $3 million.” After weeks of this, he relents, sells his store. The voice says ‘Saul, go to Las Vegas.” He asks why. “Saul, take the $3 million to Las Vegas.” He obeys, goes to a casino. Voice says, “Saul , go to the blackjack table and put it down all on one hand.” He hesitates but knows he must. He’s dealt an 18. The dealer has a six showing. “Saul, take a card.” What? The dealer has — “Take a card!” He tells the dealer to hit him. Saul gets an ace. Nineteen. He breathes easy. “Saul, take another card.” What? “TAKE ANOTHER CARD!” He asks for another card. It’s another ace. He has twenty. “Saul, take another card,” the voice commands. I have twenty! Saul shouts. “TAKE ANOTHER CARD!!” booms the voice. Hit me, Saul says. He gets another ace. Twenty one. The booming voice goes: “un-frigging-believable!”
9. “Money frees you from doing things you dislike. Since I dislike doing nearly everything, money is handy.” Which reminds me of this joke: A Jewish man goes into a confession box. “Father O’Malley,” he says, “my name is Emil Cohen. I’m seventy eight years old. Believe it or not, I’m currently involved with a 28 year old girl, and also, on the side, her 19 year old sister. We engage in all manner of pleasure, and in my entire life I’ve never felt better.” “My good man,” says the priest, “I think you’ve come to the wrong place. Why are you telling me?” And the guy goes: “I’m telling everybody
10. “While money can’t buy happiness, it certainly lets you choose your own form of misery.” Groucho was a friend of the notoriously cheap Jack Beny who liked to tell this joke: “I was walking down the street, when a stick-up man pulls out a gun and says “Your money or your life!” An extremely long silence followed. “Your money or your life!” the thug repeated. Finally I said: “I’m thinking.”
11. “I sent the club a wire stating, “PLEASE ACCEPT MY RESIGNATION. I DON’T WANT TO BELONG TO ANY CLUB THAT WILL ACCEPT PEOPLE LIKE ME AS A MEMBER.” Groucho’s biographer tells the story behind this quote this way: “Groucho wrote that line in a famous resignation letter to a club that he felt superior to. He was inducted into a club in Beverly Hills, and he arrived at this club thinking that he was going to talk with other illustrious figures about all the greats of literature. He wanted to be a writer and a serious literary man. Instead, he gets there and they’re all drinking and playing cards, and as he puts it, they’re on the phone with each others wives.” The marx brothers did not start out in comedy:
One evening in 1912, a performance at the Opera House in Nacogdoches, Texas was interrupted by shouts from outside about a runaway mule. The audience hurried out to see what was happening. Groucho was angered by the interruption and, when the audience returned, he made snide comments at their expense, including “Nacogdoches is full of roaches” and “the jackass is the flower of Tex-ass.” Instead of becoming angry, the audience laughed. The family then realized that it had potential as a comic troupe. The act slowly evolved from singing with comedy to comedy with music.
12. “I find television very educational. Every time someone switches it on I go into another room and read a good book.” Groucho never graduated from grammar school. But he was very proud of being self-educated and being an author.
P.s., Three Groucho stories follow:
I was in a building called the Thalberg Building. It was a building that was built to honor Irving Thalberg, who was our producer at MGM, and a woman backed into the elevator. And this woman was wearing a hat. I had nothing to do and was bored, so I take the back of the hat, and I push it up, and I turn around and it’s Greta Garbo. The biggest star in all of show business. I didn’t know what to say. And finally I said “I’m terribly sorry, but I thought you were a fella I knew from Kansas City.”
Chico was the gambler of the family. He pawned everything. My father was a tailor, and a very bad one, and Chico was always short of money, and he used to hock my father’s shears, so whenever my father made a suit, of course it didn’t fit, and the shears would be hanging up in the pawnshop on Ninety-first Street. Chico got a job at Klauber Horn and Co. They used to manufacture paper, different kinds of paper. And Chico never brought home a salary, ’cause he was always in the poolroom, or he was some place, and he never brought a salary. And my father told him, “Next week, if you come home without your salary, I’ll kill you.” They had a very close relationship. Chico didn’t know what to do. His father was laying for him – in a nice way, I mean. And Chico entered, apprehensively, and there was my father waiting for him. Chico said “Dad, I got a great surprise for you. They had a sale today, on paper, and I took the three dollars, that I was supposed to bring home, and I bought this paper.” And my father opened it, and it was toilet paper. It was the first time we had ever seen toilet paper in our house. We had always used either the Morning World or the Herald Tribune.
I’m witty, I’m charming…I live in a beautiful home, filled with oil paintings — expensive ones. I have a lot of money. I own a piece of the good pictures. ‘Room Service,’ ‘A Night at the Opera,’ ‘A Day at the Races,’ ‘Duck Soup’…they’re playing more now than they did then. We’re the biggest thing in the movie industry. And I live a good life. My idea of a good evening is to be at home, alone, listening to good political arguments on the television, reading…I put on my pajamas, fill a pipe with very good tobacco, and I soliloquize while the world slides by.” Groucho rolled his Havana between his fingers. “I only want to live as long as I have my wits about me,” he said. “When that goes, I quit. Chaplin said to me one day, I wish I could talk on the screen the way you do. I told him, ‘What are you worrying about? You got fifty million.’”
In his 1967 book, “The Groucho Letters: Letters From and To Groucho Marx,” there is a letter from Groucho to his brother Harpo about the best way to invest $100,000:
Remember once, way back in ’29, when I suggested a few stocks that would, in time, place you in the same class with Andrew Mellon, and Diamond Jim Brady? It was but a few months after this that you were wiped out.
Yesterday at luncheon, your brother, Dr. Gummo Marx, had just returned from the dentist’s where he had a few of his teeth filed off and naturally was in a more apprehensive mood than he normally would be.
Not knowing how much money you are worth, and seeing no reason why I should, it is difficult for me to give you the benefit of my wisdom. I can only tell you that as far as I’m concerned, if I were to invest $100,000 in a project, it would have to be something like AT&T or Standard Oil of New Jersey.
Take this for what it’s worth, but remember, someday when you come creeping to my front door asking for alms for the love of Adolph, don’t say I didn’t warn you.
I’m glad you are in almost perfect physical condition, and not tossing that 100 grand into the crumbing sands somewhere east of Indio will surely help to keep you that way.
Jeffrey T. Spaulding*
(*Groucho’s character in the film, “Animal Crackers.”)
In “The Groucho Letters,” he wrote this letter from 1964 entitled, “To The President of Chrysler Corporation.” It reads in part:
Dear Mr. Colbert:
Each year, the motor manufacturers hammer home the idea of more horsepower. I realize a reasonable amount of power is necessary, but I think it would be much smarter if emphasis were placed on safety rather than additional speed. Perhaps the ads next year should read, “prettier, faster and safe.”
I also think that if a device could be installed on the carburetor (I understand there are such things) that would eliminate the belching of carbon monoxide through the city streets, the Chrysler Corporation could create an enormous amount of good will, particularly in big cities where the carbon monoxide problem is especially acute. …
Your new cars look good, but the fact of the matter is that all the new cars look good, and I firmly believe that the first automobile company that starts stressing safety instead of speed will win far more than its share of business.
April 24, 1961
Dear Mr Goodman:
I received the first annual report of the Franklin Corporation and though I am not an expert at reading balance sheets, my financial advisor (who, I assure you, knows nothing) nodded his head in satisfaction.
You wrote that you hope I am not one of those borscht circuit stockholders who get a few points’ profit and hastily scram for the hills. For your information, I bought Alleghany Preferred eleven years ago and am just now disposing of it.
As a brand new member of your family, strategically you made a ghastly mistake in sending me individual pictures of the Board of Directors. Mr Roth, Chairman of the Board, merely looks sinister. You, the President, look like a hard worker with not too much on the ball. No one named Prosswimmer can possibly be a success. As for Samuel A. Goldblith, PhD., head of Food Technology at MIT, he looks as though he had eaten too much of the wrong kind of fodder.
At this point I would like to stop and ask you a question about Marion Harper Jr. To begin with, I immediately distrust any man who has the same name as his mother. But the thing that most disturbs me about Junior is that I don’t know what the hell he’s laughing at. Is it because he sucked me into this Corporation? This is not the kind of face that inspires confidence in a nervous and jittery stockholder.
George S. Sperti, I dismiss instantly. Any man who is the President of an outfit called Institutum Divi Thomae will certainly bear watching. Is he trying to impress stockholders with his knowledge of Latin? If so, why doesn’t he read, “Winnie ille Pu”? James J. Sullivan, I am convinced, is Paul E. Prosswimmer photographed from a different angle.
Offhand, I would say that I have summed up your group fairly accurately. I hope, for my sake, that I am mistaken.
In closing, I warn you, go easy with my money. I am in an extremely precarious profession whose livelihood depends upon a fickle public.
(temporarily at liberty)
What Groucho Taught Me about Investing http://www.uncommonwisdomdaily.com/what-groucho-marx-taught-me-about-investing-18678
Groucho stories: http://m.imdb.com/name/nm0000050/trivia
Comedy And The Economic Crash Of 1929: NPR http://www.wbur.org/npr/114181633
Dick Cavett show: https://www.youtube.com/watch?v=VckmK-ZCpAU Sings “Lydia the Tattooed Lady”.
Carson Roast YouTube: https://www.youtube.com/watch?v=5pY1XLfjLBI
Ebert interview: http://www.rogerebert.com/interviews/the-only-great-party-is-a-boy-and-a-girl-and-a-whole-cheesecake-an-interview-with-groucho-marx
Marx Brothers https://en.wikipedia.org/wiki/Marx_Brothers