The Big Short Book Review


I just finished reading Michael Lewis' latest book The Big Short. The book delves into the lives of 3 groups of small time money managers that were able to see the coming collapse of the subprime mortgage bond market and profited hugely from it.

In typical Michael Lewis fashion, this book tells a compelling tale of their world and does a good job explaining the very complex nature of sub prime mortgage bonds, CDOs, and credit default swaps. The primarily blame for what happened was pegged on the rating agencies (Moodys, S&P) and the systematic incentives setup at the investment banks.

In hindsight could I as a small time investor done something to capitalize on this? I don't really think so. Im mean we knew we were in a housing bubble but we really just didn't know how long the bubble would last. In 2005 I feel like I knew that housing prices were increasing at unsustainable rates. However if the time is right to buy a home, its time to buy. I think the primary thing I did was not really invest in the financial institutions that were - I could have shorted the the stocks, but no ones really knows how long a bubble can last without 20/20 hindsight.

The book is an easy read and a compelling tale that gives insight into those that ended up profiting from the financial crisis.

Related in Personal Finance Books:

Four Hour Work Week Book Review (Dec 06, 2010) When the 4-Hour Workweek came out back in 2007 with a lot of buzz I was interested in taking a look. However I was off to China on my international assignment and getting married so reading the 4 Hour Work...

Stop Acting Rich Book Review (Mar 17, 2010) Back when I was in college a department head gave me a copy of The Millionaire Next Door as a thank-you gift for a project I helped with. This book had a profound effect on me at the time...

Download Start Over, Finish Rich for Free (Jan 04, 2010) Today only, you can download the "Start Over, Finish Rich" e-book by David Bach for FREE! The download link is on this page. I haven't yet read the book, but I have read several of David's previous books in the...

Comments (0)


Post a comment

(Comment moderation enabled.)

About 2millionblog.com

A personal finance weblog of my journey to reach my goal of $2 million + the value of my primary residence.
Current Net Worth: $1,574,185

Sponsors

New Personal Finance Articles




PF Blogs