In this video Michael Lewis talks about his most recent book, The Big Short ( I'm half way through it now), and bond trading. Michael Lewis was a former bond trader.
In the second half of the video, he reveals that he had a bad experience at Merrill Lynch. He said he just didn't want to be bothered with thinking about his own money management. A Merrill Lynch broker, a family connection, invested his assets in auction rate securities and Lehman preferred --both of which imploded. He then went to Schwab and now has most of his money indexed.
He joins a list of people who know Wall Street and have learned the hard way the wisdom of indexing..
Michael Lewis is one of my favorite writers. I loved Liar's Poker, The New New Thing, Blindside, Moneyball, and now The Big Short,.
In my investment management/advisory practice I come across people who just "don't want to be bothered." And I understand. I feel the same way about plumbing. The faucet starts spraying water in all directions, and my inclination is to ignore it until my wife spots it and then I just want to call a plumber.
The same attitude, as pointed out by Lewis, can be costly in the money management arena.
Again, the second half of this video is worthwhile.
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