Why would you ever read a book on financial systems by someone who isn’t absurdly rich
Why would you ever read a book on aeronautical engineering from someone who isn’t a million miler?
Inappropriate metaphor
Ask HN: Book recommendations for understanding financial systems?
121–130 of 211 posts
Re: Ask HN: Book recommendations for understanding financial systems?
#122I have almost 10 years in the finance industry, both buyside and sellside and my take is that, while there are some fundamental principles at play, the world of finance is too messy and complicated for any one book to describe it. An even stronger statement I am willing to make is that no one person correctly and fully understands the financial system. So, once you accept that there is no "correct" answer to how the…
>while there are some fundamental principles at play, the world of finance is too messy and complicated for any one book to describe it. An even stronger statement I am willing to make is that no one person correctly and fully understands the financial system
All models are wrong, but some are useful.
Re: Ask HN: Book recommendations for understanding financial systems?
#123Earlier quoted context omitted.
> Lords of Finance Oh, yes, great book! And good read. Two things stuck in my mind: A) How slow things were back then. The British finance minister (“Chancellor and Under-Treasurer of Her Majesty's Exchequer”) would get on a steam ship, incognito, for a month or so to visit his counterpart in the US, then skipper back, and months later respond to the crisis. B) How few people saw things coming. People thought the ski…
Those stuck with me but so did the points the author made about gold. There was a depression. Central banks sticking to the gold standard is part of what made it the Great Depression.
Yes, absolutely. A return to the gold standard would be disastrous for our modern economies, in particular in times of exogenous shocks like now. The solution to bad central banks is not gold, but good central banks.
Re: Ask HN: Book recommendations for understanding financial systems?
#124Best books to understand why the financial system behaves the way it does are Nassim Taleb's books. Take the principles there, and apply them to finance and it explains 100% of why prices move the way they do.
Re: Ask HN: Book recommendations for understanding financial systems?
#125Youtube how economic machine works by ray dalio.
Re: Ask HN: Book recommendations for understanding financial systems?
#126I have almost 10 years in the finance industry, both buyside and sellside and my take is that, while there are some fundamental principles at play, the world of finance is too messy and complicated for any one book to describe it. An even stronger statement I am willing to make is that no one person correctly and fully understands the financial system. So, once you accept that there is no "correct" answer to how the…
I agree with you. I believe the university textbooks are no good either as they are too far away from the real market. DO you believe that financial history books or even just history books with financial materials might actually be better? I once read the "Reminiscence Of A Stock Operator" and my edition happens to include large paragraphs of description of the market at that time, and they are really fascinating an…
It really depends on the book. The main issue regarding historical books is that they can very easily become dated.
I've also read Reminiscence of a Stock Operator and I found that, while interesting, very little of that informs how the market works nowadays. It did shine a light on why TA is still a thing nowadays - a flavour of TA used to work historically and you can still see echoes of that today.
Re: Ask HN: Book recommendations for understanding financial systems?
#127I have almost 10 years in the finance industry, both buyside and sellside and my take is that, while there are some fundamental principles at play, the world of finance is too messy and complicated for any one book to describe it. An even stronger statement I am willing to make is that no one person correctly and fully understands the financial system. So, once you accept that there is no "correct" answer to how the…
Agreed that Money Stuff generally technically accurate. The only gripe I have about it is that it has a bias in the direction of "everything is so messed up / comical". This is an irreducible bias as it's the job of the journalist to make a topic seem engaging and interesting. However, if you take the theme of Levine's articles too literally/thematically, you'll think that finance is filled with quirky rules that pro…
I agree that he gravitates towards quirky ends of the market - it's a big part of what makes it enjoyable to watch. To his credit, however, whenever he discusses a mechanism breaking, he usually starts by explaining how the machanism usually works. To wit, he did a good job explaining how the aluminum market works when discussing the GS market manipulation accusations and he explained how index inclusion works (and what an index provider's job and incentives are) when discussing the Snapchat IPO.
But yeah, for someone coming in with 0 knowledge, some more fundamental, drier texts may be more efficient in imparting knowledge.
Re: Ask HN: Book recommendations for understanding financial systems?
#128The architect of the Euro, Bernard Lietaer, wrote a book called The Future of Money that I’m reading now.
Re: Ask HN: Book recommendations for understanding financial systems?
#129Earlier quoted context omitted.
The entire Incerto book series by Taleb (which includes Fooled by Randomness and The Black Swan) are awesome and they are talking about big catastrophic events like the current one. This pandemic is a classic Black Swan event: it's a surprise, it has a major impact and lots of experts will try to say that it was easily foreseeable in hindsight.
It's not a black swan, a pandemic was long on the horizon (think SATS, MERS, Ebola, ...). Just to add: I found taleb pretty opionated and had trouble distinguishing his own opinions from facts/theories.. I'd not recommend his books.
Agreed on both counts.
Experts had been warning about this. See for example Bryan Walsh’s article in TIME in 2017, very explicitly titled The World Is Not Ready for the Next Pandemic [1]. That’s not really a black swan. It was just a question of when. Note also that some countries (eg Singapore, Taiwan) are reasonably well prepared.
Next, Taleb is smart, but overrated (most of all by himself). His books can be summarised in a few paragraphs. IIRC, someone said to Murray Gell-Mann once that “nobody is as smart as you think you are” - that applies to Taleb.
[1] https://time.com/magazine/us/4766607/may-15th-2017-vol-189-n...
Re: Ask HN: Book recommendations for understanding financial systems?
#130House of Morgan - biography of JO Morgan and kin Snowball - biography of Warren Buffet The Good Earth - novel about Chinese farmer Fortune’s Children - the rise and fall of the Vanderbilts
These might be good books, but I doubt they’ll answer OP’s questions.