Lunch with Milton Friedman

I have been meeting and corresponding with Milton Friedman, today's most famous economist, for over ten years.

At one point, my contact with him really helped me keep from making a bad investment decision for my subscribers.Many in the investment newsletter business had been warning subscribers of an impending stock market crash due to the fact that M1, the money supply, was declining sharply in 1996.

"Should we sell?" asked my subscribers through letters and phone calls.

I met with Dr. Friedman. He said M1 was too narrow a definition of the money supply and therefore, now out of date. M2, which included money market funds, was much more accurate.

And M2 was rising! In short, there was no "tight-money" policy, and no chance of a serious bear market. I kept my subscribers in the market and they made over 20% or more on my recommended stocks and mutual funds.

On a personal note, several years ago Milton Friedman and I went to the same conference, and I invited him to lunch. After the meal, I grabbed the bill and paid for it. I turned to Milton and said, "So I guess it's no longer true your refrain, that 'there's no such thing as a free lunch!'" To which he replied, "Oh, no, Mark, I had to listen to you for two hours!"