Liar's Poker (1)

On the throes of an impending resignation, when I’d rather engross myself in a book than mull over the various potential directions of my life, Michael Lewis’ Liar’s Poker came at an opportune time in my life. Wasn’t expecting a memoir of a bond trader in the 1980’s to be my escape route though.

Liar’s Poker is the story of the unlikely transition of an art graduate from the Princeton, to the loud, ugly world of bond trading at Salomon Brothers. The moments of self-doubt, the author’s easy admission that he lacks pure talent or the trader’s instinct and has risen within the ranks to become a ‘big swinging dick’ piggybacking on others makes this a highly endearing account. Perhaps, this very humbleness from the very beginning is what had me rooting for the author from the start. However you realize quite early on, that the author is blessed with an astute sense of how the world works. As a trainee in Salomon Brothers, the various managers pick and choose the trainees they want in their departments, on the basis of their likeability and potential they see at the end of the training program. Mike, fearful of being unwanted and packed off in some obscure department, spreads a rumor about how X manager has been asking for him. The other bosses toe the line, not for any other reason, but simply because other bosses wanted him, and he gets the department of his choice.

Nevertheless, the author is in a constant state of learning from others, lacking any genuine insights on the market himself. His mentor in fact rightly describes him as ‘bearing the stamp of the last person he spoke to’. The author is soon made to break out of the naïve notion that his customers’ interests were aligned with the interests of the firm, and is forced to make unprofitable deals for his gullible customers for the greater good of Salomon Brothers.

There are some unforgettable characters in the book (made unforgettable by the author’s quirky character description) the Human Piranha (Piranha is an exceedingly nasty fish) who can’t speak without spewing profanities or as the book puts ‘His is a world filled with copulating inanimate objects’ or Alexander, Mike’s mentor who would advise him to take a long position on potatoes in US after Ukraine’s Chernobyl nuclear plant explosion, and there is the Lewis Ranieri, the brain behind the creation of mortgage bonds.

As some one with little or no knowledge of finance, the author got me interested in a book of mortgage bonds and CMOs and junk bonds and leveraged buyouts and such, and for that I am thankful. Without quite meaning to, the book actually ended up teaching quite a lot! Though I was more interested in his ‘outsider’ perspective on the company and his personal story than the company’s history and progress, it is undobtedly an interesting read.

Impatiently waiting for Flipkart to deliver Moneyball now.