Monday, October 20, 2008

Books that I must read

Taking it with you to the beach

The best books on business are entertaining as well as enlightening


Published: Thursday, July 17, 2008

One fine day in the summer of love, Abbie Hoffman and a merry band of followers made their way into the New York Stock Exchange and proceeded to throw dollar bills onto the Big Board's floor. The poster boy for '60s activists got a kick thumbing his nose at American capitalism. "The big tickertape stopped and the brokers let out a mighty cheer. The guards started pushing us and the brokers booed." Outside, Abbie & Co. danced to celebrate "the end of money."

Oy, Hoffman, had you lived to see it, you'd be dancing a kazatska: markets are burning through more cash these days than even you could have dreamed possible.

That brief moment 40-odd years ago is just what you'd expect from Wall St. in the loopy 1960s, and it's why John Brooks's The Go-Go Years: the Drama and Crashing Finale of Wall Street's Bullish 60s (John Wiley and Sons, 1999) should be in your beach bag this summer.

Much is written on how to invest, but a lot can be learned from the corporate culture and psychological mindset of the financial world. Some of the best books on both shed some perspective on why markets can't seem to kick their bad habits. Short answer: human nature.

"A small classic in the long history of financial insanity" is J.K. Galbraith's praise for Go-Go Years. Brooks's storytelling picks up the '60s beat to take readers on a ride through that bull's appetite for hot growth stocks. But what makes for such a lively read is a tale told through the prism of the decade's social and political upheaval: anti-war protesters on Wall St., a local church putting up graffiti boards on which financial types could just let it all hang out.

There's a lot of historical context, too, that in hindsight shows how much and how little has changed. For example, the NYSE's trading volume averaged just over 10 million shares a day in 1967, a record left in tatters the following year, when "speculation spread like a prairie fire - when the nation, sick and disgusted with itself, seemed to try to drown its guilt in a frenetic quest for quick and easy money."

And how's this for déjà vu? "The fad ... was for taking short profitable rides on hot new issues." And, "In 1970, most of the glamour stocks would fall out of bed and many of the gunslingers who had touted them would leave, or be fired from, the securities business."

Gunslingers indeed. One of the first and easiest things to grasp about financial markets is that it's "a guy thing," and that comes through in Michael Lewis's Liar's Poker (Penguin, 1989), his rollicking fun read on his former employer and 1980s bond powerhouse, Salomon Brothers.

Almost 20 years old, Poker is still every bit as fresh; credit that to the subject matter and Lewis's writing style. If the term mortgage-backed securities (sound familiar?) gives you hives, Poker will get you up to speed with such chapters as The Fat Boys and Their Marvelous Money Machine. The book wears its age well because of the author's sharp eye for detail, translated with equally sharp wit. Being a Salomon trainee was "like being beaten up every day by the neighbourhood bully." Or, describing some trading floor types: "They didn't have customers. They had victims."

Lewis followed up with The Money Culture (W.W. Norton & Co., 1991), a collection of essays that mix it up: there's amusing - a $16,000 bet traders placed on an overweight colleague's claim he could run a mile in under eight minutes - and there's serious. He gets you to pay attention to the heavier fare: "Management-led LBOs, in which a company's managers use borrowed money to buy the company from its shareholders, have become the easiest way for people not born with $100 million to ensure that their children don't similarly suffer."

In a lighter vein is Ron Insana's Traders' Tales (John Wiley and Sons, 1996), short, quick bites on the hijinks and legendary tales of Wall St., published when the affable Insana was an anchor/host at CNBC. If you want a break from high finance but want to stick with business, go with Stanley Bing's The Big Bing (HarperCollins, 2003).

A pseudonym recognizable to readers of Fortune, Bing works in the corporate world, and with his cynical or funny tongue, enlightens the rest of us on life on that side of the building. If "Bang" is on your list, make a beeline for How Not To Succeed in Business, a wickedly clever piece on how the young can mess up job interviews. To wit, on résumés: "Nobody cares that you're looking for a 'personally expanding opportunity that will help me deliver on my potential as a developer of marketing concepts.'...Just tell me where you've worked and what you did."

All these books do what summer reading should: entertain. But for those with a strong stomach, there's Susan Antilla's Tales from the Boom-Boom Room (HarperBusiness). The cover describes it as "the landmark legal battles that exposed Wall St.'s shocking culture of sexual harassment."

Better than anything on TV.

Dorothy Lipovenko is a long-time observer of the business scene who lives in Montreal.

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posted by u2r2h at 10:17 AM


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