Summer Reading - Liar's Poker

Question

Seems kind of dead around here lately, so I thought I'd try to get some discussion started.

I've seen Liar's Poker on several summer reading lists so I decided to give it a shot. I found a hardcover copy for $.70 (yes seventy cents) on Amazon.com + $3.99 shipping. The subject matter is Sales and Trading, specifically the rise and fall of mortgage securities at Salomon and the rise of junk bonds at Drexel.

Things are somewhat dated; for example the book speaks highly of Michael Milken, which isn't surprising since it was published before he was sent to jail. As a lawyer, I worked in commercial mortgage backed securities so I found the story about how mortgage securities originated interesting.

I think the book gives a good glimpse of the differences between the corporate finance side of investment banking and sales & trading. It was laugh out loud funny at times, and a real page turner. I couldn't put it down and finished in about a day.

I wouldn't say there is much information relevant to getting ready for business school, but I think it's a good way to get yourself in the right frame of mind to start thinking about business issues.

dabots · Answer

i read it a few years ago, and found it entertaining. i didn't take away anything valuable from it though.

tkkoh · Answer

I too read it many years ago... an interesting book and it gives a peep of how the industry was like. I'm sure the industry have changed pretty much since then.... so this book will not give an updated account of the current situation. Nevertheless, the corporate culture and lifestyle painted in the book may still be somewhat relevant.

Lewis has a few other books after Liar's, but I think this book is his best.

johnnyx9 · Answer

I read that book back in school along w/ Monkey Business and Den of Thieves and all those books that seem to get people excited about high finance. It's funny, because the books basically reveal what horrible lifestyles these people lead in these stressful, all-consuming careers, yet rather than de-glamourizing these industries, these books seem to get people excited about these industries. 

I would include myself in that group as well, there would be something exciting about being in an industry that has such an "impact" on so many things, the sub-human lifestyle notwithstanding.

MoonShine · Answer

Johnny,
You are absolutely right about how these books get people excited about high finance; count me in that group as well. I'm reading Den of thieves now, so far it's very good. I just finished "Barbarians at the Gate." another classic (not a detailed account about Ibanking but good for displaying what goes on behind the scenes of a major takeover). I read Liar's Poker a while ago, and I loved it. "Predators Ball" (strictly about the rise and fall of Milken) was also very good.

fluffydot · Answer

Just as soon as I finish reading  Bank  I will probably get on to Liar's Poker... still waiting for amazon to ship that to me.

eazyb81 · Answer

Any recommendations for books that focus on the modern-day world of IB? 

I'm almost finished with Liar's Poker, and while I thoroughly have enjoyed it, it wasn't exactly what I was looking for as it mainly focuses on S&T. 

A buddy of mine recommended Barbarians At The Gate, but it sounds like it is a bit out of date at this point. 

Monkey Business is an option, but it sounds like it completely trashes the IB world, which isn't exactly what i'm looking for.

died4me · Answer

I just finished reading it a week ago.
It was pretty good.

johnnyx9 · Answer

I don't know of any other i-banking books for you Eazyb81, but I think anyone who has been an i-banker will trash it and will agree with a lot of Monkey Business. It's a pretty humorous take on the whole thing.

I think the deal w/ i-banking is that the burnout rate is so high -- I'm just making this up, but I think like 70% of people leave after two years, maybe it's higher than that -- that most people who have been in the industry hate it. The ones that stay and rise to the level of managing director are making insane amounts of money, and while they still work long hours, they're not subject to constant verbal abuse and all-nighters, so they probably "like" i-banking as much as it can be liked.

I know you've probably heard this before, but they call i-banking "fool's gold" because the money sounds great and all, but the odds that the average person will really stick with it to the point where they're making big money consistently (making 200K for two years is nice, but if you jump ship and move to a muni bank or whatever burnout analysts do, you realize you just traded two years of your life and your health and your livelihood for something like 200K after taxes) are so slim that it's just a brutal machine that churns people into hamburger meat.

Sorry to go on a tangent there, but I've been considering I-banking myself and I know it would be a mistake, but I still keep thinking about it and ignoring all my recovering i-banker friends who tell me it would be the biggest mistake of my life.

pelihu · Answer

I just finished Monkey Business and I laughed my ass off. I will start a separate thread about it.

I will agree that working as hard as they do will affect your health. When I was a lawyer, working with bankers, I knew lots of people that had colds all the time. They just never had time to recover. Personally, I starting finding white hairs (not gray, pure white) and I was still in my 20s; not a lot but a dozen or so. My eyesight also deteriorated badly. After leaving NY and that type of work, my eyesight slowly recovered and is as good as it was before. Also, I haven't seen another white hair even though I'm years older now. You do literally age prematurely in that environment. Doing that type of work in NY is definitely not high on my list.

eazyb81 · Answer

Well I didn't really want to get into a discussion on the merits of IB, I was just looking for some book recommendations on the industry. I am well aware of the pros and cons of IB. 

Thoughts on Den of Thieves?

naturallight · Answer

Den of Thieves is absolutely fantastic. Barbarians and Predator's are a little dated, but still good. You'll still learn some new stuff from those books. 

I posted this in another thread, but The Accidental Investment Banker is shaping up to be quite good as well.

My all-time favorite book in this genre ('business narrative' I guess) has to be The Smartest Guys in the Room, which is about Enron. I'd recommend it to everyone.

eazyb81 · Answer

Thanks for the feedback Natty. 

I've never heard of The Accidental Investment Banker until now; I will have to check it out on Amazon. 

Loved The Smartest Guys in the Room, and I'm also a fan of the movie/documentary.

naturallight · Answer

These are good biz narratives too:

 Buffett: The Making of an American Capitalist by Roger Lowenstein

When Genius Failed: The Rise and Fall of Long-Term Capital Management by Roger Lowenstein

Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets by Nassim Nicholas Taleb 


I have a 1 hour commute each way, so I end up reading a lot of books on the bus.

johnnyx9 · Answer

Sorry, didn't mean to go off on an anti-banking tangent, I just meant that the reason Monkey Business "trashes" i-banking is because that's how almost everyone feels about it.

I think Den of Thieves is really good, lots of details on specific deals that went down. Good commentary on the insane corporate culture on Wall Street, with more of a serious tone than Liar's Poker or Monkey Business.

Summer Reading - Liar's Poker

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