26 Sep Wall Street Bonanza: A Tale of Three Books
I have reviewed dozens upon dozens of books over the last six years dealing with the causes and aftermath of the financial crisis, and I one day intend to write my own book on the subject. There was a bonanza of books that were written on that subject, some from highly capable economists offering their ideological perspective to the events, some high profile journalists whose point of view was sought after, and others were perhaps stretching to warrant an invitation to the fray but nonetheless chimed in … It was a topic that justified a bonanza of books, and I think we covered it well here at The Bahnsen Viewpoint.
Lately, some may notice there has been another bonanza of books, also dealing to some degree with finance and investment, but not necessarily about something so material and historical and ideological as the financial crisis. Rather, this round has been more “experiential”, or “biographical”. Essentially, they all in one way or another were “I worked or still work on Wall Street and here is what my story was”. Some of you may be thinking, “who cares?”, and some may be thinking, “I didn’t know such a genre even existed – not my dish”, but I have actually eaten it all up, and the results have been rather telling. I ate it up and will continue to eat it up because I have devoted my life to the capital markets. I am in the business of managing money for real people and institutions that have real life things going on, and this means on a day to day basis I am engaged in the lives of those people, but also that I am engaged in the capital markets from which investment opportunities and facilities exist. It is a career, but it is a calling. One I wouldn’t give up for all the tea in China. I love what I do, and when someone else decides to sit down and write a book or make a movie about their own journey, if I end up being the only soul in the land who cares, so be it – I love this stuff. And so I read. And now, I write.
This review will be a sort of combination review, tackling three books I read this summer all at once. The first was Josh Brown’s Backstage on Wall Street. It is admittedly a bit dated at this point, but Josh is a talented writer, an entertaining voice on CNBC, and one of the handful of pundits I enjoy listening to and following whether I agree with him or not (which I often do). He is not an analyst, but he and his partner, Barry Ritholtz, are gifted and opinionated writers, provocateurs, and users of new media to distribute a point of view (they have been extraordinary in their ability to leverage the blogosphere and Twitter to disseminate their perspective). The book sought to “shine a light” on how Wall Street works, and since Josh and I entered the business at the same time, I suspected there would be an interesting parallel path (from big brokerage firms to the land of independence, where he now sits and where I launched in April of this year). A few comments are in order, though. First of all, the book is entertaining, and from my vantage point as a member of the industry, interesting. He is critical of the industry’s embedded conflicts, as I am, and he shines a light on the need for fiduciary care, as I certainly would. I do think some of the rhetoric and illustrations are a bit dated, and I suspect Mr. Brown knows this (one could easily point out that even the big, bad wirehouses have primarily moved to “fee based” models vs. old school commission systems without invalidating any of the larger points he was making). There are various categories he wanted to address in the business, various motivating factors that drive so much of how financial products become into being and a part of an individual investor’s portfolio, and he pulled it off. His chapter on wholesalers – the “sales” folks from mutual fund companies who “cover” financial advisors at big firms – was painfully funny. I feared that the book would delve into too much self-righteous moralizing and such, and frankly, one could choose to read part of it that way. But I put the book down when I was done believing Josh Brown had done readers a service, was not guilty of a sort of ethical narcissism, and had effectively written what I am sure he set out to write.
I would have guessed that John LeFevre’s Straight to Hell was going to be the book I enjoyed the most. His famous @GSElevator handle which I follow on twitter has been a heavy source of entertainment for several years, and by entertainment, I mean there have been moments of side-splitting laughter. You will have to dig further if you are interested, and most of the enjoyment of his stuff is past tense (he now seems to just tweet about his own fantasy football efforts ad nauseum, but when he was really just being GSElevator, it was golden). With the backdrop that this was an ex-investment banker who pretended to work for Goldman Sachs in an interview (before he was outed) and had effectively built a massive audience with side-splitting humor pretending to be a sort of cliché Wall Street alpha male, naturally I couldn’t wait for the book! I read it cover to cover, and then I texted as many of my friends as possible to make sure they didn’t buy the book on my recommendation (because I had hyped it for them before I read it). What LeFevre did wrong was be LeFevre instead of @GSElevator. I cannot imagine there are people out there who find it interesting how many times a mid-level investment banking employee got drunk in his 20’s, but if you read the book, you will be hard-pressed to find 15 pages that talk about anything remotely resembling investment banking, and you will find pages anywhere you look that you are certain you already read earlier in the book describing various drunk escapades – one that aren’t particularly funny, interesting, or unique. Young man with frat boy mentality goes on business trip. Young man drinks and drinks and drinks. Young man no longer in the business. Young man writes book about it. Reading the book, I felt like a group of frat boys got together and reminisced about old drinking stories (“remember when we got wasted at Scotty’s party that time – that was awesome”), and someone transcribed their conversation and then put it out as a book. But here’s the thing – if LeFevre and his publisher thought his stories of booze and hookers were worth writing a book about (not as a story of redemption, by the way, but a sort of amoral mindless exercise in hedonistic boasting), fine. I would have never dared to review the book because it wouldn’t have been worth the five minutes of my life necessary to write it (any more than the few hours it took to read the mindless drivel were worthwhile). However, the narrative coming from SOME parts of the press (most have hammered the book along the same lines I have) and from the author and publisher themselves has been something I couldn’t let pass … It goes something like this – “Finally, LeFevre shines a light on what is REALLY happening in investment banking”. “Before this book, you never knew that investment bankers drank a lot in Hong Kong hotels, but now you do!” “This is a business with a deep dark side, and LeFevre shows that Wall Street is a really bad place”. Blah blah blah. I dare anyone to read the favorable press coverage of this mindless rag and then read the actual book. There is not a single iota of interesting business coverage, and not a remote chance you will learn something about the business you didn’t know. Unless you didn’t know that young men with a job often drink and party before they either (a) Flame out (as is the case here), or (b) Pull their act together and grow up. I will leave it there. Skip this one!
Last and certainly not least is Jason Trennert’s My Side of the Street . Trennert is the Managing Partner of Strategas Research Group, a splendid investment boutique whose research I use heavily. His book serves as a sort of antidote to some of the silly caricatures that exist in Wall Street folklore. He is transparent, honest, and real in describing some of his own bouts of struggle and iniquity, and yet doesn’t seek to center the book around his happy hour excesses, let alone glamorize or romanticize them. Rather, he delves into the formation of his own research firm having left one of the largest ones where he earned his stripes as an analyst. The book is personal but informative; it builds a connection but also educates; it is defensive of Wall Street without being naïve and ignorant. I am not sure how much people outside of our industry would care, but the book is endearing and worthwhile for every single person who calls Wall Street home (even if they live in Newport Beach, California). He understands free markets, he writes eloquently about them, and he portrays a story of real human aspiration – the desire to become something in the business of capital markets, and how he did exactly that. The fact that he sets up the narrative as a tale of two restaurants at 54th and Madison is hysterical, for I have dined at San Pietro’s countless times telling myself I was the most blessed man in the world to eat there, and I have sat over at Rothmann’s across the street countless times STILL feeling like I was the most blessed man in the world. For one thing, I love fine dining Italian AND steakhouses all the same. But I also got exactly what Trennert was referring to. You enter this business and take on all the stress, risk, and anxiety it represents because you are an aspirational person. You love the human flourishing that capital markets help to unleash. What Jason Trennert’s book does is personalize his story around such endeavors, and in the process inform his readers about a perspective on Wall Street few have done. A great read.
There will surely be more books coming about life on Wall Street because (a) Some want to demonize it, and (b) Some want to caricaturize it. Some will sell, and some will not. I will likely read them all because I am a junkie for it. In the case of these three books, though, one got a little sample of the whole new cottage industry. I am better off for having read two of these three, and I am better off for now having written about all three.