Go away, Henry Blodget

I enjoy reading investment books, and I especially enjoy when they're written by people with interesting backgrounds. The disgraced former Merrill Lynch Internet analyst Henry Blodget certainly seems to fit the bill. So in spite of the New York Times review trashing the book, I couldn't help ordering a copy of his The Wall Street Self-Defense Manual. Lesson Number One: If the New York Times says it's bad it probably is. In the case of this book, it's actually worse than the review said. To begin with, this book offers nothing new. It contains solid advice, but it's advice that has been fairly trite since A Random Walk Down Wall Street first came out. That was in 1973.

Let me save you 10 bucks and a lot of time by providing you a brief overview of everything you will learn in Blodget's book: Predicting the market is difficult at best, impossible at worst. By buying low cost index mutual funds, you can beat most funds. You don't need to hire a financial adviser because adding costs will hurt your returns. Just keep it simple. It's sage advice, but it's been written about in tons of other books. To learn more about passive investing strategies, pick up The Bogleheads' Guide to Investing and/or The Only Investment Guide You'll Ever Need. These books are better-written, more interesting, and provide better plans.

Now onto the part Blodget's book that really angers me. The one thing that Blodget could provide that would be interesting would be a down and dirty expose of Wall Street corruption, and a tell-all, soul-cleansing account of all the horrible stuff that he did (i.e., pumping stocks in reports while trashing them privately in emails). But Blodget is strangely silent on this, and the only real mention to his past that he makes comes early in the book where he makes the most pathetic apology non-apology that I've seen in awhile. Referring to the decline of Internet stocks, he writes: If missing the top had been my only mistake, I would have survived . . . I also made a more serious mistake, however, which was to write a lot of emotional unprofessional e-mails, especially during the heat of the crash. Later, amid the wreckage, when the press, public, and regulators began calling for blood, my emails did me in . . . I was accused by New York State Attorney General Elliot Spitzer of having made remarks in e-mails that were "inconsistent" with my research (popular translation: "privately trashing stocks he was public recommending"). Along with others, I agreed to pay a humongous fine and be barred from the industry.

Dear Henry: The problem wasn't that the e-mails were "unprofessional" or "emotional." The problem was that you were acting as a paid shill for the investment banking arm of your firm, and passing off your research as legitimate when it was anything but.

Henry Blodget's failure to take any real responsibility (instead blaming his downfall on "the press, public, and regulators calling for blood") can lead me to only one conclusion: this book is a cynical effort by a dishonest man to make money by slapping his name on a book of unoriginal investment advice. Stay away from this, like you should have stayed away from the stocks Henry was pumping.