The Arrogance Cycle

Think You Can't Lose, Think Again

By Michael Farr

What is the arrogance cycle? We’ve just lived through it. As market bubbles build, our confidence level rises (dis)proportionately. Everyone wants in on the action. We want to believe Wall Street, and once we do, the inevitable happens. Like Dr. Frankenstein breathing life into inanimate flesh, investment professionals sought ever more novel ways to create wealth. The only problem was that it was all artificial. In this book, Michael Farr examines the forces at work on individuals and markets and explains in clear, concise, layman’s terms how we got to where we are.

Farr focuses on individual factors – such as rampant consumerism, a sense of entitlement, narcissism, resentment toward the upper class – that combined to create the perfect economic storm. By consulting with leading psychologists and relaying first-hand experience with investment clients, he provides a case study of the arrogant investor. In reviewing failed enterprises like Enron, AIG, Lehman Brothers, and Bear Stearns, as well as the illegal activities of Bernie Madoff and others through the lens of arrogance, the book sheds light on those disasters and offers a means to detect the insidious presence of arrogance so that in the future we can contain the damage before it spreads.

About the Author

Michael K. Farr is President and majority owner of Farr, Miller & Washington, LLC. He is Chairman of the Investment Committee and is responsible for overseeing the day to day activities of the firm. Under his leadership, the firm has grown to over seven hundred million dollars in assets. Prior to starting FM&W, he was a Principal with Alex. Brown & Sons.

Mr. Farr is a Contributor for CNBC television as well as a recurring commentator and guest host for The Today Show, Good Morning America, NBC’s Nightly News, CNN, Bloomberg, Reuters, and the Nightly Business Report. Mr. Farr is heard on Associated Press Radio and National Public Radio, and he is quoted regularly in the Wall Street Journal, Forbes, Fortune, The Washington Post, Businessweek, USA Today, and many other publications. Mr. Farr was a long time recurring panelist on PBS’ Wall $treet Week. He is a member of the Economic Club of Washington, National Association for Business Economics, The Young President’s Organization, and The Washington Association of Money Managers. He is the author of A Million Is Not Enough, published by Hachette Book Group USA in 2008 and The Arrogance Cycle, released in September 2011 by Globe Pequot Press.

Mr. Farr is the Chairman of the Sibley Memorial Hospital Foundation. He also serves on the Board of Trustees at Sibley Hospital; he is the former Vice Chairman of the Board of the Salvation Army; he is a former member of the Board of Trustees of Ford’s Theatre; he is the former Chairman of the Board of Directors of the Traveler’s Aid Society, Nation’s Capitol Progress Foundation, and the Paul Berry Academic Scholarship Foundation, as well as a member of the Board of the Neediest Kids. Mr. Farr is a graduate of the University of the South in Sewanee, Tennessee. He is married and has two children.

Survey

We have developed a behavioral indicator that combines market prices with investor sentiment. Your help in sharing your current attitude is very valuable.

Take the Survey »

More About Michael Farr

• Learn more about Farr, Miller, & Washington at www.farrmiller.com.
• Read the quarterly FarrView newsletter
• See where Michael Farr was recently featured in the media.
• See video clips of Michael Farr at CNBC.com.