Good as Gold

I have met Jim Cook, who appears on this month’s cover, only once—in July 1981, at a reception preceding a gem auction in Bloomington that he had spent $400,000 to promote. I had written a few stories for a magazine he owned (Home Energy Digest, a publication for owners of wood-burning stoves), and the editor thought I might like to see the milieu in which he was working.

It reminded me of a scene from a James Bond movie. Some 250 well-appointed buyers had registered to bid on 345 lots of colored gems, each displayed under glass. A harpist strummed, tuxedoed waiters poured champagne, and as a British auctioneer lifted his gavel, a crisp security force positioned itself discreetly apart from the bidders. I was younger then and might have seemed a little wide-eyed. “Uzis?” I asked. “The guards really have Uzis?”

Cook himself was charming, thanking me for taking an interest in his business and for contributing to his magazine. Five years later, I was flattered to receive a copy of his newly published book, The Start-Up Entrepreneur, and to find it warmly inscribed, “To Jay Novak, A Friend of Enterprise. Jim Cook.”

So, planning this issue, I was unprepared for the reactions of individuals to whom we described Jim Cook’s trading in silver coins and bullion. Almost to a person, they expressed distaste, if not outright scorn. Only Cook’s dealings in precious metals evoked those reactions, however; his investments in duck decoys, metal banks, movie posters, and other “collectibles” were accepted as benign.

Negative images of misers and their metals—the mythological King Midas destroyed by his love of gold, Ebenezer Scrooge and his tight-stringed coin purse, Donald Duck’s rich uncle basking in his money bin—are ingrained deeply in our culture. We all know of individuals who confer status automatically on the wealthy, speak of money in hushed tones, and build monuments to its accumulation, practicing a form of idolatry condemned by such disparate thinkers as Socrates, Lenin, and Andrew Carnegie. It is possible that ownership of gold and silver, which are among the least abstract forms of wealth, strikes us especially as totem worship.

Hard assets are, of course, hedges against inflation, currency devaluation, and societal instability—and it could be that when an individual positions himself for a financial collapse, the assumption becomes that he is rooting for such collapse. (It happens. Try taking a large short position in the stock of any company you think is in trouble, and then try to persuade yourself that you don’t want the price to fall to zero, any attendant harm to shareholders, suppliers, and employees of the company notwithstanding.)