Michael Lewis Quotes

Reg NMS was intended to create equality of opportunity in the U.S. stock market. Instead it institutionalized a more pernicious inequality. A small class of insiders with the resources to create speed were now allowed to preview the market and trade on what they had seen.

A credit default swap was confusing mainly because it wasn't really a swap at all. It was an insurance policy, typically on a corporate bond, with semiannual premium payments and a fixed term.

All that was clear that the profits to be had from smart people making complicated bets overwhelmed anything that could be had from servicing customers, or allocating capital to productive enterprise.

Incredibly, at this critical juncture in financial history, after which so much changed so quickly, the only constraint in the subprime mortgage market was a shortage of people willing to bet against it.

You'll hit gold more often if you simply try out a lot of things.

Force yourself through the work, force the skills to comes; that's the hardest phase; I feel like your problem is that you're trying to judge all things in abstract before you do them. That is your tragic mistake.

It was neither healthy nor good when public stock exchanges introduced order types and speed advantages that high-frequency traders could use to exploit everyone else. This sort of inefficiency didn't vanish the moment it was spotted and acted upon. It was like a broken slot machine in the casino that pays off every time. It would keep paying off until someone said something about it; but no one who played the slot machine had any interest in pointing out that it was broken.

the more he studied Buffet, the less he thought he could be copied; indeed, the lesson of Buffet was: To succeed in a spectacular fashion you had to be spectacularly unusual.

Great stories happen to those who can tell them

The best way to manage people, he thought, was to convince them that you were good for their careers. He further believed that the only way to get people to believe that you were good for their careers was actually to be good for their careers.

Ever since grade school, when his father had shown him the stock tables at the back of the newspaper and told him that the stock market was a crooked place and never to be trusted, let alone invested in, the subject had fascinated him.

Someone out there was using the fact that stock market orders arrived at different times at different exchanges to front-run orders from one market to another.

It's hard to make something that's interesting. It's really, really hard. It's like a law of nature, a law of aerodynamics, that anything that's written or anything that's created wants to be mediocre. The natural state of all writing is mediocrity... So what it takes to make anything more than mediocre is such an act of will...

Looking into it a bit, Jamie found that the model used by Wall Street to price LEAPs, the Black-Scholes option pricing model, made some strange assumptions.

Here was a strange but true fact: The closer you were to the market, the harder it was to perceive its folly.