Lehman et al. - recommended reading

bahzob

By coincidence and well before the events of the past weeks I read a couple of excellent books that go a long way to explaining how/why debacles like Lehman/AIG etc happen.

Also provide food for thought on more general matters of life. Both written by a guy called Nassim Nicholas Taleb:

Early book mainly dealing with finance marketshttp://www.amazon.co.uk/Fooled-Randomness-Hidden-Chance-Markets/dp/0141031484/ref=sr_1_2?ie=UTF8&s=books&qid=1221552457&sr=8-2

More recent book also dealing with markets but also wider matters:
http://www.amazon.co.uk/Black-Swan-Impact-Highly-Improbable/dp/0141034599/ref=sr_1_1?ie=UTF8&s=books&qid=1221552457&sr=8-1

Littigator

I read an interview with him in the Sunday Times a few weeks back. For years all the banks/economists have rubbished him. In the last year they have started paying him huge sums to come and talk to them.

Hmmmm funny that!

Kléber

Both worth reading. His writing style is infuriating at times but despite covering finance and philosophy together, it's quit readable.

il_principe

The Black Swan is a fascinating read.

Mike Healey

What always fascinates me is the uni-directional nature of the winds of finance. People like the CEO of Lehman Bros get paid enormous sums ($22m last year) because of their extraordinary financial wisdom, but then they go and get "blown off course" by the unexpected.

Somehow, they never get blown on course, even in a bull market when pretty much every company in sight is growing year on year.

Kléber

Some people win the lottery, some people get struck by lightning. it's easy to look at unique cases rather than the wider group.

Matt-B

My other half is an accountant-to-be, and she had the 'Fooled by Randomness' book. On holiday earlier this year I ran out of reading material and had a go at reading it.

I....just couldn't. I stopped about 20 pages in. It both infuriated and bored me. But I think that's probably more to do with my lack of interest for the subject matter, than any fault on his side.

mrushton

Lehman actually took a stake in SRAM earlier this year, but it was the venture capital arm as opposed to the Bank

teagar

Mike Healey wrote:

What always fascinates me is the uni-directional nature of the winds of finance. People like the CEO of Lehman Bros get paid enormous sums ($22m last year) because of their extraordinary financial wisdom, but then they go and get "blown off course" by the unexpected.

Somehow, they never get blown on course, even in a bull market when pretty much every company in sight is growing year on year.

[/quote] Prior to going bankrupt, the firm had in excess of $275 billion in assets under management. Altogether, since going public in 1994, the firm had increased net revenues over 600% from $2.73 billion to $19.2 billion and had increased employee headcount over 230% from 8,500 to almost 28,600. [/quote]



I think before the credit crunch they were doing pretty well.

bahzob

teagar wrote:

Prior to going bankrupt, the firm had in excess of $275 billion in assets under management. Altogether, since going public in 1994, the firm had increased net revenues over 600% from $2.73 billion to $19.2 billion and had increased employee headcount over 230% from 8,500 to almost 28,600.

I think before the credit crunch they were doing pretty well.

If you think this is doing "pretty well" you should try reading the books in the OP.