The Big Short

9780393353150_p0_v1_s192x300I have become a fan of Michael Lewis. The first book I read of his was The Blind Side. It wasn’t something I normally would have read, but really wanted to see the movie version and thought I’d read the book first. Since then, I’ve read all of his books, the latest one Flash Boys, which I loved.  Now I’m anxiously awaiting his next book, though not sure when that will be.  I first read The Big Short a few years ago, shortly after it first came out. I’m so excited to see the movie version, but before seeing it, wanted to reread the book.

I remember taking economics in college, but not much of it actually stuck with me. I admit to knowing nothing about the stock market – so along with this book, I used Google frequently to learn more about the investing/stock market terms that Lewis used. I had no idea what value investing is (and kinda still don’t), or a mortgage-backed security, and wasn’t that sure exactly what a hedge fund is. So, reading this book (along with some of his other books) was like a learning experience for me.

At the center of the story is Michael Burry, who is incredibly smart, and seems to understand the stock market better than anyone. Once trained as a neurologist, he left medicine in order to pursue a career on Wall Street. Before starting this new career, he started a blog on the stock market, and become almost obsessed on Wall Street. His blog started to gain a lot of attention.  And from there, he decided to start his own hedge fund, with different rules than most hedge funds operated by. It was a risky move, and it was hard getting initial investors – he had virtually no experience. Had it not been for the death of his father, and a small inheritance he received, starting his own company would not have been possible.

So what exactly did Burry do that was so remarkable? Aren’t there plenty of hedge funds already out there? Yes, but he changed the rules. He also made a huge bet against Wall Street – a bet that no one wanted to make, but a bet many didn’t want to believe he would win. And he did win; he was able to identify a flaw in the economy – and what would ultimately doom the stock market – sub-prime mortgages. Burry becomes somewhat of a hero – in his ability to detect this flaw in the market. Unlike most of the major characters in the book, he doesn’t seem greedy. He is intrigued by the way the stock market works. He doesn’t seem in it just for the money – he did leave a promising career in medicine, after all.

This wasn’t my favorite Michael Lewis book, but I still thought it was pretty great. I think I needed the lesson on the economy, and I think most of us could. Things aren’t exactly explained in “lamen’s terms”, but instead he challenges readers to rise to his level. Instead of blaming politicians for their economic policies, we could gain a better understanding at the stock market, how it works, and what exactly went wrong before 2008 that got us in our current position. This is the perfect book for that!  Students of economics would probably learn more from this book than most textbooks.

I haven’t seen the movie yet – but I’m dying to.  My husband and I are planning to see it on our next date night.  He hasn’t read the book – but he loved the movie Moneyball, and we can’t wait!


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