How do you shortlist books to read?
The most important part that makes one curious is the content of the book. Another important aspect for me for shortlisting books is the reputation of the author. I am more comfortable reading books of authors whom I have read before.
The last book you read (which left a deep impact on you)
The big short by Michael Lewis.
Tell us something about the book.
This book depicts the events surrounding the subprime crises that unfolded in the US in 2008. The author gives insights on the biggest financial crisis and the role of banks, rating agencies and investment bankers in it.
Three key takeaways from the book
Never follow the herd. Your investment calls should be based on your analysis and understanding of the situation and market.
Gains in the financial market follow the economic principle of diminishing marginal utility. There is no one side movement in financial or any other market. At some point, things get stagnant or start declining.
Finally, greed for extra returns is always counterproductive.
Why would you recommend the book to other finance professionals
This book is a must for every finance professional because it highlights that no one is invincible. It teaches us that our work and analysis in the financial market should be based on our own research rather than following the herd. It tells us that while improving our performance and return on investment are necessary, we should not let greed lead us to commit fraud.
Most importantly it teaches us that we should not chew more than we can bite. If we don't understand the risk, then we should not get into the trade, no matter how lucrative it is.
