Peter Grandich Tells His Life Story

By Kevin Michael Grace

This book is available here.

The crucial dilemma of Peter Grandich’s life is explained by this passage from Matthew. “And Jesus said to his disciples, Believe me, a rich man will not enter God’s kingdom easily. And once again I tell you, it is easier for a camel to pass through a needle’s eye, than for a man to enter the kingdom of heaven when he is rich. At hearing this, the disciples were thrown into great bewilderment; Why then, they asked, who can be saved? Jesus fastened his eyes on them, and said to them, Such a thing is impossible to man’s powers, but to God all things are possible.”

Grandich, before and after

Yes, this is Peter Grandich the financial guru we’re discussing: perennial conference speaker, adviser to (at last count) 23 mining and energy companies, author of the Grandich Letter. He has never made a secret of his faith, and now he has written an autobiography, Confessions of a Wall Street Whiz Kid (with Jo Smith Schloeder), which is steeped in the Bible but is by no means a mere tract. That is to say, those with little use for religion in general and Christianity in particular but who do care about preserving and augmenting their money will find much that is useful here.

This book is a cautionary tale which brings to mind the famous maxim of Confucius. “All rich men are fools, but those men who are not rich who say, ‘When I become rich, I will not be a fool,” are fools already.” Grandich was, by his own account, a man obsessed by money, probably because he was born, in 1956, into so little. Raised in the Bronx, he was the product of fitfully-employed Italian Catholic father and a Jewish mother, who worked as a secretary.

It was not a happy home, and school wasn’t any better. Grandich failed to graduate from DeWitt Clinton High School, which in its glory years produced such notables as Richard Avedon, George Cukor, Robert Hofstadter, Stan Lee, Jerry Moss and Neil Simon. By the 1970s, when Grandich attended, it was a notorious hellhole. After being mugged, then beaten (by friends of the muggers) the next day in its halls, Grandich decided to enter the working world with nothing more than a Grade 10 education. (He never got a GED, either.)

He spent his days behind the hardware counter of a department store and his nights aping John Travolta under the mirror balls of New York discos. Not a promising beginning, but in 1979, he had a stroke of great luck, when he met Mary Troy, an Irish immigrant whom he married the next year. It’s safe to say that without the love and stability Mary provided, Grandich’s life would have been poor in every respect.

By 1982, Grandich managed a copier warehouse for Toshiba. But he had wider ambitions. Fascinated by Wall Street, he taught himself enough about it to parlay $7,000 (from his wife’s $25,000 dowry) into $100,000 by trading options. He was then bilked out of that by a speculator. This taught him his first big lesson: “moral and honourable” are “not the norm” in the market, but brokers gain on the swings and roundabouts. So he became one himself.

Grandich admits that “cold calling gave me sweaty palms.” A serious disadvantage in his newfound profession, so he innovated with the creation in 1984 of his first Grandich newsletter. As he mastered his trade, pushing IPOs, he learned his second big lesson: the market has a tendency to induce insanity in its participants.

By 1987, the Grandich Whizz Kid story was established. He was profiled in print and on TV, and became VP of investment strategy at his firm. In August of that year, he told his clients to sell everything because “the market ‘will’ crash,” which did not sit well with his superiors, to put it mildly. On October 19, he was proved spectacularly right. The very next day, he recounts, “I put out what became my second ‘famous’ prediction: I stated that the market would be at a new all-time high within two years.” Again, spectacularly right. By now, Grandich had become something of a legend.

Grandich founded his own shop, dedicated to the three rules he learned from an attorney friend (three rules that should be fully internalized by everyone in the market but, sadly, are not): 1. Fully disclose. 2. Fully disclose. 3. Fully disclose. By 1995, he abandoned brokering for full-time consulting. This led to millions in income and “lots of showy ‘stuff’—a multi-acre mini-estate, five racehorses, two stock cars—all with my name attached.” (All of which he was later forced to surrender.)

It was then that Grandich began to wrestle with his third and biggest lesson (also from Matthew): “You must serve God or money; you cannot serve both.” He began to suffer from the insanity he had witnessed in others. The next decade and beyond were harrowing: panic attacks, chronic depression and suicidal urges that prescriptions could not cure. Twice institutionalized, he was even subjected to ECT, AKA shock therapy.

He had learned that he was indeed a fool, and his religion was then no fortress. “During this time in my life I was practicing what I have baptized as ‘Godfather Catholicism’… Like Pacino, I was going to church when it suited me, donating lots of money—mostly for show—yet not embracing my faith. I was too caught up in me and my greatness.”

Over time, with the help of his wife, daughter and spiritual counsellors, Grandich learned to finally reject the Malcolm Forbes doctrine—”Whoever dies with the most toys wins”—and finally accept the most important precept, in finance and elsewhere: “God owns everything.”

Grandich scorns the “prosperity gospel” as nothing more than “materialism masquerading as theology.” Yet he believes it possible to manage one’s wealth without serving Mammon, and this book presents a practical and detailed guide to that end.

In addition, Grandich expands on his beliefs that “the key to wealth is cash flow” and that traditional financial planning as done by experts is based on guesswork (with results to be expected), enumerates the Top 10 financial mistakes and presents cogent opinions on the end of retirement, the self-storage craze and American economic decline.

Ultimately, Grandich concludes that financial and personal happiness depend on the ability to “learn the difference between what you need and what you want.” And this is painfully difficult regardless of one’s theology or lack of one. The strength of this autobiography is in its expression of how Peter Grandich stopped being a fool, with all the horrors and joys along the way.