Book Review – Liar’s Poker By Michael Lewis

This book review could probably be summed up in one sentence: After reading Liar’s Poker I immediately went to my Amazon account and purchased 5 more Michael Lewis books!  I thought that this insider’s account of life on Wall Street was absolutely fascinating.  It pretty much confirmed all the negative stereotypes that “Main Street” has come to believe about the financial sector.  This IS NOT a how-to, or personal finance book, instead it is the no-holds-barred story through the eyes of a very bright young man as he tried to navigate the choppy waters of the business world at Salomon Brothers investment firm.

Ever Wonder What Really Happens On Wall Street?

Michael Lewis wrote this book back in 1990 before he wrote some of his other bestsellers that you might be familiar with such as Moneyball and The Big Short.  It basically is a tell-all about what he seen on Wall Street as he went through the interview process, the ridiculous training marathon, and finally as a working stiff.  What immediately draws you into Lewis’ world is how honest he is, especially about his own faults.  His admission that he was a Art History major who really knew nothing about bonds, mortgages, stocks, or any other financial investments really makes you wonder who is at the controls in these major companies.  He reveals that when he began in Wall Street he sold millions of dollars worth of financial products everyday without really having a clue what it all meant.  Lewis is also candid about his motivations for doing this (money was by far the major influence, surprise, surprise).

I won’t go into too much detail, but Lewis gives some brilliant insights into the Alpha-male-dominated world of big investment firms, and the extremely odd and intriguing culture that still exists today.  If you’re familiar with the current financial climate you will probably be amazed that the very systematic problems that Lewis comments on in 1990 (before a decade that broke investing records of many kinds) were what eventually blew the whole house of cards over almost two decades later.  He explains exactly how all this crazy mortgage debt got started, and just how outlandish the whole process became.

 

Liar’s Poker – A Card Game For Sharks

The book is called Liar’s Poker after a game that the bond traders at Salomon Brothers used to play.  I’m still not sure I get the intricacies of the game, but the gist of it is that it relies on a players’ ability to bluff big and read their opponents’ expressions/actions/psyche.  Lewis basically admits that this is the core of the financial system – big bluffs, and good poker psychology – as opposed to financial statements and balance sheets.  It’s a truly exhilarating, terrifying, and above all else interesting read if you’ve ever wondered about the real people on Wall Street (behind all the Hollywood portrayals).  It really makes you wonder who is handling your money if your involved in any mutual funds.

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