The Accidental Investment Banker: Inside the Decade That Transformed Wall Street

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Fun read

Vince Cable, the current Business Minister in the Cameron Cabinet, said recently, which was much reported, that "in recent years investment banking resembled a casino, and the massive scale of gambling losses has dragged down the traditional business and retail lending activities, as the banks try to rebuild their balance sheets."In his book, "The Accidental Investment Banker", Jonathan A. Knee reveals that the 'casino punter' modus operandi that obsessed investment banks was very prevalent in the 90's and early 2000's and was rampant both before and long after the Long Term Capital Management systemic scare. Events have shown that no lessons whatsoever were learned and the irresponsible gambling continued unabated until the Credit Crunch tsunami battered its way through the world's financial corridors taking nearly everything in it's path. The force of this mighty wave was only stopped by the erection of a dam piled high with billions, and billions of tax-payers money. The financial institution's meagre defences of shareholders capital had the equivalent effectiveness of a single pea shooter against a stampede of angry bull elephants!The author's experiences at Goldman Sachs and Stanley Morgan are very enlightening on the workings of an investment bank and is invaluable reading for just about anyone wanting to know 'what on earth do these people, who we hear so much negativity about in the press, television, parliament and elsewhere, do to deserve their 'treasure trove' pay?". Told with humour and candour, this is an excellent account and lifts the curtain and shines a light in, on the world of investment banking revealing many of it's crazy 'gambling' methods, power players, back-stabbers, and 'get-rich-at-any-cost' characters.This is a good read, which makes little or no pretence at hiding the driving force behind the frenzy to make highly speculative bets on the bank's behalf, namely the kamikaze pursuit of personal wealth by the bank's senior staff, who were remunerated with huge bonuses if it seemed their 'bets' had come home to roost. Alas, most of the betting, whilst seeming to be profitable initially, soon turned into disastrously huge losses, but by which time the bonuses had been paid. And shockingly, in most cases the executives whose recklessness caused the losses, were not required to repay their bonuses. How can vast dollops of money for bank busting losses be justified? Sheer stupidity but remember the rules of engagement were written or heavily influenced by the very people getting these unwarranted rewards - funny that!J Pierpoint Morgan hit the nail on the head when he said, "A man has two reasons for doing anything; a good reason and the real reason". The 'good reason' was ostensibly to make profits for their banks; the 'real reason' was to stuff many hundreds of millions of dollars, pounds or whatever into their own bottomless pockets and used for the purpose of acquiring extravagantly opulent homes, cars, boats, planes, art treasures etc and lifestyles far beyond the wildest dreams of most of those taxpayers now footing the 'bank bailout bill'.

Jonathan A. Knee's 'The Accidental Investment Banker' appears to be the 1990s and early new millennium investment banking counterpart to the famous  Liar's Poker: Playing the Money Markets  by Bernhard Lewis. A combination of first hand experience in the industry (and in no lesser players than Goldman Sachs and Morgan Stanley) and commentary about both what investment banking is generally is about and how the field has evolved from the early 20th century onwards, the author manages to take a tried and tested format and apply it successfully to investment banking.One good comment that one can level at the author is that he managed to make the book both readable and interesting at the same time - and this also for people who are not industry aficionados (i.e. someone with basic economics / management education or understanding should be able to follow it easily enough) - possibly a result of the author having to sell complicated products to people with a short attention span over a long period of time.And while first hand accounts that are later being generalized to an entire sector always run the risk of projecting from one specific case to the general, at least the experiences in Goldman and Morgan Stanley were sufficiently different to enable some worthwhile comparison and validation of the author's assumptions.The book will not per se make you a better investment banker (I cannot think of many books that will really make you a good practitioner of a specific trade), it will at least provide a useful commentary on the historical evolution of the field and the challenges faced by the industry over the last several decades.As often the case with accounts portraying shortcomings of a specific industry sector (think Ogilvy's  Confessions of an Advertising Man , Stewart's  The Management Myth: Why the Experts Keep Getting it Wrong , or Lewis'  Liar's Poker (Hodder Great Reads) ), one runs the risk of making the sector all the more appealing to the future generations. In this case I found the added appeal, or the pull of the sector no stronger after reading the book but then again this may have more to do with the age of the reader than the book per se - the fact that it is not a runaway bestseller probably still means that it has not captured the imagination of today's young professionals in the same way as some of the others mentioned above.Do not let the lacking bestseller status deter you - it is a very well written, readable and intelligent analysis of an industry sector and one will - in my opinion - benefit from having read it. It requires neither a passion for banking, nor an advanced degree in economics to enjoy and get the most out of, and is also not written by someone especially smug and self centered. Liar's Poker: Playing the Money MarketsConfessions of an Advertising ManThe Management Myth: Why the Experts Keep Getting it WrongLiar's Poker (Hodder Great Reads)

This is a very good book related to one's life in financing/banking. Provides some techniques and tools but limited. Banking is the root of many evils in the world. A good starter book for those who wish to dig deeper in the disgusting world of financing/banking.

As an I-Banker at a regional firm I always enjoy reading books such as this. This is a mixed bag. Knee starts the book discussing his internship in London, what a "rookie" does, what he did well, what he did not do well, and why he didn't want to do this forever. But, after an MBA and a short career with an airline, he's back at it again, and with success. He "accidentally" fell into a role and used his wit to carve out a successful niche. This is where this book is at its best and an excellent, fast read.Unfortunately, it's not quite a full book and Knee feels the need to regurgitate a past history of Goldman Sachs, the excellent firm for which he works. This is where the book slows down and is totally out of character with the title. Given I had just read "Goldman Sachs: Culture of Success" written by Lisa Endlish to whom he refers liberally, this was really of no interest to me.Finally, we're back to his career change to Morgan Stanley in New York and now have a new problem, the total collapse of deals where bankers earn their money. This is quite interesting also. As I-bankers will attest, the business becomes ruthless with inter-fighting as everyone grabs for the few crumbs of income, people must be let go and mansions and egos must be protected.Overall, I love the book and I'd rather he had shortened the book and stayed on subject instead of spending 30% of time on a history lesson before jumping back to his career. So, be forewarned, it's good with a twist.