Liar’s Poker by Michael Lewis

Happy #WellTailoredWednesday! I just finished reading one of the quintessential finance books, Michael Lewis's Liar's Poker. And boy, it was...quite underwhelming.

Background

Liar's Poker recounts the culture of Wall Street in the 1980s, when the [in]famous Salomon Brothers was at its peak. At the time, Michael Lewis was an ambitious Princeton graduate who landed a job as a Bond Salesman and who climbed the ranks to eventually make millions for the firm. This was the frat-boy, deviant era of finance. Men earned their keep not from their degree of education (many weren't even college graduates) but from their P&L numbers. It was very much a boy's club back then, complete with the crudest jokes, big egos, and even bigger wallets.

He describes the birth of the commercial mortgage-backed security (CMBS) from Lewis Ranieri, who is regarded as one of the godfathers of finance. While immensely profitable to the big banks at the time, CMBS loans became the kryptonite to some of those very banks later on. Now, the CMBS loan is known to be one of the major catalysts to the Great Recession. Lewis describes this phenomenon in more detail in another book, The Big Short, which I plan on reading soon.

Lewis also mentions several other notable characters of finance including Howie Rubin, who's recent bizarre accusations have invariably shined a light back into Liar's Poker, Michael Milken, the junk bond king who was one of the richest men on the Street at the time, and John Gutfreund, the former CEO of Salomon Brothers who eventually ran it to the ground.

John Gutfreund, featured in Liar's Poker, on the trading floor of Salomon Brothers.
John Gutfreund, featured in Liar's Poker, on the trading floor of Salomon Brothers.

My Opinion

I know that Liar's Poker is regarded as one of the "must read" books about Wall Street. However, I felt that it leaned on the side of a historical overview than of a non-fiction classic. There were many times when I wanted to skip through the background of their firm and dive into details about life on the Street. For example, I felt that Lewis spent too much time discussing how Salomon stacked up against Goldman Sachs and Morgan Stanley and how a junk bond operated.

That said, I do admit that Lewis does a good job of painting the scene at times. His recount of how Salomon Brothers slowly started to crumble to the point of needing to sell, and then describing the entire ordeal of selling, is harrowing almost like a Tom Clancy novel. You almost feel bad for the bankers at the firm...until you remember that they all raked in millions of dollars from the retirement funds of hardworking Americans. Another example is Lewis's honest portrayal of his very early days of trading, where he makes some very costly overpromises to his customers, only to have to make up for it at the end with his tail between his legs.

Final Thoughts

As mentioned, I was a little disappointed in this book and would give it a rating of 3.5/5 .

Read If You:

  • Want to learn about Wall Street in its heyday and see how its culture of greed eventually spiraled into doom for Salomon Brothers
  • Work in Finance/go to Finance dinner parties and are looking to drop "Ranieri", "The rise and fall of Salomon Brothers", or "Big Swinging Dick" (though I'd highly encourage you to NOT say that out loud)
  • Read and/or watched The Big Short and enjoy Michael Lewis's style of writing

Don't Read If You:

  • Are expecting a dramatic tale of devious tales in Finance. If you're looking for this, I'd highly recommend Straight to Hell by John LeFevre
  • Want to learn about the current state of Finance. While the events told by Lewis were accurate, a LOT has changed since 1987
  • Can't stand to read some of the deviance, misogynistic, and sometimes racist tales told from that era

Thanks for reading and please feel free to leave your thoughts in the comments section below!

Finance

Young Money: Inside the Hidden World of Wall Street’s Post-Crash Recruits by Kevin Roose

Kevin Roose on his motivation behind writing "Young Money"

Background

Happy #WellTailoredWednesday! After reading Rich Dad, Poor Dad, I've been going through a bit of a finance phase, where I've been trying to read up on that industry as a whole. I'm not sure what attracts me so much to it, but over the past couple of months I've had a one-track mind to read a lot about banking, hedge funds, trading, and the works.

Perhaps it's because ever since the Great Recession, there's been so much buzz around investment banking, for better or for worse. Or maybe it's because I'm jealous that these kids have the ability to make more money than they, and their family, have ever dreamed of. Either way, I was really curious to see what drove (and continues to drive) these intelligent college graduates into the brazen world of Finance. And with a few friends actually working on Wall Street, I was even more intrigued. Thus, I was attracted to Young Money: Inside the Hidden World of Wall Street's Post-Crash Recruits by Kevin Roose.

A Life in Finance

Young Money tells the story of 8 entry-level employees who work at some of the largest financial investment firms in the world, which include Goldman Sachs, Merrill Lynch, Citigroup, and more. The book was written as Roose shadowed these 8 individuals for over 3 years. 

At first, these graduates have high hopes and dreams about working on The Street. But over time, their opinions and outlooks on the industry, and on life in general, change. Take Arjun Khan, who started off as a bright-eyed 22-year old from Fordham who hustled to get a job on The Street, despite having gone to a non-target school, and who at the end of the 3 years matures into a sophisticated investor looking at the big picture. Or Derrick Brown, who's desperate to make it on The Street coming from out-of-state, but who eventually realizes that there's more to life than working 100+ hours a week.

Kevin Roose infiltrated the ultra-secretive Kappa Beta Phi dinner that featured some of finance's most successful people.
Kevin Roose infiltrated the ultra-secretive Kappa Beta Phi dinner that featured some of finance's most successful people.

One part of the book I especially enjoyed reading was Roose's retelling of his experience at the Kappa Beta Phi induction dinner. Kappa Beta Phi is Wall Street's most secretive fraternity and Roose was somehow brilliant enough to sneak in and witness the event live and with all it's salaciousness and crudeness. He wrote a recap of the full event in an article for New York Magazine, which I highly encourage readers to look into.

Final Thoughts

I really enjoyed reading this book and would give it a 4.8/5

Read If You:

  • Are thinking about a future in Finance and are willing to take what you hear about the industry with a grain of salt
  • Work in Finance and have an open mind about learning about the industry's culture
  • Looking for a first-hand look at the industry from those people who've actually worked in it

Don't Read If You:

  • Think working in Finance is prestigious and flawless
  • Work in Finance and do not have an open mind about learning about the culture in your industry
  • Want a veteran's or a neutral POV of the industry (Roose sprinkles his opinion a few times throughout the book)

Thanks for reading and please feel free to leave your thoughts in the comments section below!

Grant Cardone's 10x Rule

The 10x Rule by Grant Cardone

Happy #WellTailoredWednesday! Recently, I've been working on reading more business books, in an effort to shift my mindset and improve the quality of my life. Sometimes the genre gets blurred between "Business books" and "self-help", but nevertheless, I think some of these books are worth a read. The latest book I scooped up was Grant Cardone's "The 10x Rule".

Background

I'll be honest here---the first time I heard about Grant Cardone and his voice on a podcast, I thought he was kind of a d***. He sounded very arrogant, kept interrupting his co-hosts, and always had this sort of "snake oil salesman" pitch about how investing in real estate is the easiest way to get rich. But he wore me down and I realized that he's actually a family man from humble beginnings and who now owns more than $100 Million in assets.

The 10x Rule is Cardone's 4th book (and I plan to read the others in the future too) and while it wasn't a New York Times Best-Seller like some of the others, I would still highly recommend it. I won't go through each of the main points he highlights. Instead, I'll touch on just a few parts of the book that really stuck with me.

Success As We Don't Know It

From the onset, Cardone challenges readers to take all their efforts, dreams, and ambitions and multiply them by 10. Doing so, he says, is the best way to create big-time success---10x times, actually, the success readers would have originally had. That's right, he advises to make 10x more phone calls at work, send 10x more Thank You letters, publish 10x more social media posts, and so on. Think massive targets and set your benchmark for success higher, and don't settle for the unreasonable or unrealistic goals that other people set for themselves. Kind of makes you wonder what he thinks about SMART Goals huh?

I think Cardone has a refreshing viewpoint on defining success, in that he says to make success mandatory. Don't just make it something to aspire to, but rather make it an obligation to yourself to achieve it. If we think of success as just an "option", then that's all it ever will be for us---simple (pg. 157). He stresses that it's one's personal duty to live up to their full potential. Anything short of doing so is an ethical issue.

"If you don't consider it your duty to live up to your potential, then you simply won't. If it doesn't become an ethical issue for you, then you won't feel obligated and driven to fulfill your capacity." (pg. 27)

This sentiment that success is our rightful responsibility really resonated with me. The way I look at it, there are multiple people who've sacrificed a lot for me, and now I'm obligated to them to achieve that success. After 16+ years of riding with the training wheels on, it's now time for me to perform and become successful. If I fall short of being great, their efforts would be wasted. Okay, that may sound a bit too extreme but his point about taking success to the next level was something that really hit home for me.

10x Rule Broken Down
A breakdown of the concepts from the 10x Rule. Click the image to see the video!

Alas! Hokey Filler

All this being said, it would be premature to say that this book doesn't have any flaws. There's still a decent amount of the hokey conjecture that plagues every motivational book. There's also a little bit of the easier-said-than-done advice, and though he makes it a point to use real world examples throughout the book, there are still instances where you just want to say "Okay Grant, calm down. We all can't just do that so easily!"

For example, in Chapter 20 he talks about being omnipresent in your industry. The goal here is to make yourself available and known all the time, so that customers will know that you're THE go-to person for what they need. While the intentions of this message may be good, it's incredibly difficult for the budding entrepreneur to reach this level just by getting in the right mentality. Personally, I fall more into the camp of taking small, but actionable, steps every day to scale up. Eventually, the consistency will pay off and customers will know who you are. But I guess that's why Cardone is at $100M in assets and I'm at $0M...Okay rant over!

For the Haterz

Lastly, no mindset-shift, self-help book would be complete without a nod to the opposition. Whenever someone seeks out to achieve success, there are always those people who will doubt them. To deal with the naysayers, Cardone encourages readers to move forward with even more fervor. In fact, he suggests embracing them and thanking them for their support. Paying them any mind would essentially be a waste of time. The best kind of revenge is success and for the haterz, he says:

"The best way to even the score against those who have it in for you is to make yourself so well known that every time they look up---each morning they wake and right before they go to sleep at night---they see evidence of you and your success." (pg. 153)

Final Thoughts

Overall, I really enjoyed this book, which is why I was able to complete it in about 3 weeks or so (humblebrag!). For all the reasons above, I give this book a 4.4/5

Read If You:

  • Want to change your mindset about success and goal-setting
  • Are confident in your ability to improve your life and take action from Day 1
  • Looking to learn how the wealthy think and define success

Don’t Read If You:

  • Looking for a step-by-step formula for success
  • Constantly make excuses for why you're not successful
  • Immediately think of Grant Cardone as just another scam-artist guru and aren't willing to change your opinion

Thanks for reading and please feel free to leave your thoughts in the comments section below!

The Goal by Eliyahu M. Goldratt and Jeff Cox

Pretty interesting book about one manager's daunting task of saving his plant (and his marriage) from shutting down. He's struggling to find out what is holding back his firm from being productive until he goes on a hike with his son's Boy Scout troop. On this hike, he notices that some scouts walk at a faster pace than other uh...portly ones, particularly one who is imaginatively named "Herbie". Yet no matter how fast the other scouts walk, they still have to wait for Herbie in order for the whole troop to complete the hike. He applies what he learns from this hike to his own plant's problems and tries to find the "Herbies" in his plant. I had to read this book for an extra credit assignment for my supply chain class and I like it so far. I get a little hung up on some of the plant operation terms, but other than that it's a pretty easy read. Check it out if you're interested!