When I first watched the movie ‘Wolf of Wall Street’, I thought the office culture that was depicted in investment banking was surely over exaggerated for the sake of entertainment. But after reading Liar’s Poker by Michael Lewis, it seems I was wrong. Lewis tells the story of his experience at the investment bank Salomon Brothers in the early 80s, as well as the nature of the industry during this period. I liked this book since Lewis rarely gave his personal opinion of the situations that were described, and simply stated the turn of events with opinions from others involved. With that said, I wanted to share my opinions on the investment banking industry described in Liar’s Poker.
This book opened my eyes to the number of individuals in their early 20s, straight from university, that were making ridiculous amount of money. It makes me wonder what drives individuals to make money in this industry, by merely making deals, and essentially moving money from A to B. Sure, money makes life easier, but where do you stop?
It was apparent that a large portion of the job is related to office politics, egos, and the ability to persuade people even when you have no idea what you are talking about. The company also clearly outlined the male dominated office, which further intensified the office antics and practical jokes that were played amongst employees. In my personal opinion I don’t understand how people could work in this environment, given that the practical jokes were childish and demeaning towards others.
The book highlighted the fact that investment bankers were always finding new loops holes in the system to make money. For example, the Salomon Brothers speciality was trading bonds instead of stocks, and employees would always find new markets that government policies had not caught up with. Furthermore, the company was buying and selling bonds with the intent of manipulating the market. The only opinion that Lewis shared on several occasions was his guilt when convincing customers to invest, knowing that they would make a loss. But his guilt soon disappeared after the realisation that he was making himself and the company A LOT of money.
In 1987 when Black Monday hit, the company took a turn for the worst. Despite being a junior in the firm, Lewis was well favoured given the large amounts of money he was bringing in. Lewis could see his potential earnings over the next few years would be dramatic, but did not see potential to grow as an individual and challenge himself in the industry. For this reason, Lewis decided to leave the investment banking industry.
I thoroughly enjoyed Lewis’ writing style and found it easy to follow. Given that my knowledge in investment banking is limited, I sometimes found it difficult to follow the technical explanations of events that occurred. The chapters that entertained me the most was Lewis sharing his personal stories of his journey.
Are you interested in learning more by reading this book?
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