Here the third installment of my Trader’s Wish.
The book I want to talk about today is Liar’s Poker by Michael Lewis. Thanks go out to Mary de Cobos for reminding me about this one.
Michael Lewis is probably best know in the wider world for his book Money Ball. You may be familiar with that one, as in it he chronicles the evolution in baseball to a more statistically based system of evaluating players, as made popular by the Oakland Athletics. Liar’s Poker, though, is the book that put Lewis on the map in the first place.
Liar’s Poker is a semi-autobiographical look at Lewis’ relatively brief career in investment banking. He was in the middle of the 1980s glory days as a member of the Salomon Brothers team. The people he worked with are some of the truly significant names on Wall Street – some of whom would eventually go on to found the now notorious Long-term Capital Management (LTCM).
Through a combination of financial markets history and the sharing of his own personal story, Lewis provides an excellent view of life on the trading desks of the major Wall Street institutions. It includes a first-hand view of the madness that took place during the Crash of ’87.
If you have any interest at all in understanding how the financial markets work behind the price movements you see on your screen, Liar’s Poker is a must read. The mechanics of the financial system may have advanced since Lewis’s days at Salomon, but the people are still at the core of things and they way they act has changed very little.