I just finished reading Liar’s Poker, a hilarious book I would strongly recommend to any potential investors. I thought it would be useful to share my favorite excerpts from the book.
Michael Lewis takes you through his adventures as a Bond Salesman working on Wall Street (Salomon Brothers) during the 1980s. If you want a riveting review, click right cha.
Here are my favorite excerpts:
“Best of all, he gave us a rule of thumb about information in the markets that I later found useful: Those who say – don’t know, and those who know – don’t say.”
“Many of the trades that Alexander suggested followed one of two patterns. First, when all investors were doing the same thing, he would actively seek to do the opposite. The word stockbrokers use for this approach is contrarian. Everyone wants to be one, but no one is, for the sad reason that most investors are scared of looking foolish. Investors do not fear losing money as much as they fear solitude, by which I mean taking risks that others avoid. When they are caught losing money alone, they have no excuse for their mistake, and most investors, like most people, need excuses. They are, strangely enough, happy to stand on the edge of a precipice as long as they are joined by a few thousand others. But when a market is widely regarded to be in a bad way, even if the problems are illusory, many investors get out.
The second pattern to Alexander’s thought was that in the event of a major dislocation, such as a stock market crash, a natural disaster, the breakdown of OPEC’s production agreements, he would look away from the initial focus of investor interest and seek secondary and tertiary effects.”
“I learned awhile ago that there was no point to showing weakness. When you arrive as 6:30am, having had no sleep the night before, and having lost your best friend in a car accident, and some Big Swinging Dick walks over to your desk, slaps you on the back, and says, ‘How the hell are you?’ you don’t say, ‘I’m really tired and really upset.’ You say, ‘I’m great, how the hell are you?’”
Big thanks to Teacher Man, from My University Money for the recommendation.
Are there any books you recommend?
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