End of First week rings the closing bell for my first book of 2016.
Flash Boys: Cracking the Money Code by Michael Lewis
The more I read, the more I realize how much I enjoy reading about white collared crimes. It’s always intriguing to learn about how conscious actions driven by vested interests of large corporates impact the lifetime efforts of many helpless individuals.
First it is Robin Cook for medical crimes and now Michael Lewis for financial crimes. Both to be blamed for this new found interest of mine.
Michael Lewis shoots at you a continuous stream of financial jargon and reiterates every time he throws a new word at you, he makes sure to point out that many ‘experts’ even within industry were not really sure what those words meant. But, the most interesting aspect of this is, every time a new jargon pops up, he halts the story and takes a step back to explain what that term means.
The book focuses on High Frequency Trading and the mad affiliation that these bigger banks have in gaining speed in accessing the information before everyone else. Their attempt is to gain as much possible with the arbitrage- Rebate arbitrage, Latency arbitrage, Slow market arbitrage, Dark Pool arbitrage and many more as you flip the pages.
More often than not, the aspect that gets overlooked in these type of books is how the story is narrated. Every character is introduced in the backdrop of 9/11 attacks and how they evolved into building up a ‘honest’ exchange called ‘IEX’. It would only be slightly unfair to call ‘Brad Katsuyama’ as the lead protagonist, who is set out on a mission ‘restore fairness in the U.S. stock market’ , when every single character adds its our own glory to this story.
I should thank my friend Sudhakar for this wonderful recommendation. Couldn’t have started with a better book.
For those interested in reading quick synopsis, here is an article by Andrew Ross written for Guardian describing the aftermath of this book release. But, I would definitely categorize it into ‘Must Read’
I know a quarter of this book is fiction- which I don’t care about; half of it is grey zone- you can argue for ages about its authenticity – which I am not really concerned about; but there is other quarter which is absolutely true and that is sufficient to make me sick to my knees.
I conclude this with two most simple but relevant quotes from this book:
- “You line them (resumes) up on a paper and say may be there is a ten percent difference between them. But one guy is getting paid three hundred grand and the other is getting one point five million. The difference is one guy has been given the big picture and the other hasn’t (sic)“
- “It’s (stock market) an industry that over glorifies data, because the data is so easy to game and the true data is so hard to obtain”
End Note: Every nano second is expensive.