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Friday, September 16, 2016

Friday Feature Book Review: "How I Caused the Credit Crunch" : Tetsuya Ishikawa リーマンショックの物語: 石川哲也

It is now 8 years after Lehman Brothers went bankrupt. However, with the global bond markets at near zero rates, a new credit bubble is forming. Around 10 years ago, the world had a similar bubble with CDOs. This is a great look back at the Lehman Brothers crash and the Bear Stearns rescue by JP Morgan, now almost 8 years ago. This amusing novel gives a real insider's view on how the very frothy credit markets got there in the first place. 

For those who were just making a solid living in equities, fixed income and credit was a ticking time bomb. The author Tetsuya Ishikawa, is a Japanese British citizen, who worked at Goldman Sachs. He directly worked with collateralized debt obligations, better known as CDOs, that all blew up later on.

This is a great in-depth answer to those wondering about what a credit job in a global financial institution would have been like. This is a pleasant read if you like "The Wolf of Wall Street" style stories. It is full of slices of the excesses of money, booze, strippers, drugs and fine hotels, but not really strong in substance or market insight. 


The odd feeling you get by reading this book now though, is how few people seemed to have been aware of the clouds on the horizon. There may have been worry and concern over the amount of risk, but not enough to lose sleep over. The reality of the melt down turned out to be a much bigger event than anybody seemed to have anticipated.

The Top 3 Takeaways from this book that really impact any reader are:

1) There seemed to be no clear understanding by traders of how badly any abuse of credit via CDOs could end.

2) The focus on making as much money as possible personally, seemed to be the only religion at the time within Finance.

3) How interconnected the global world of finance really became, was not truly understood, only suspected.

You also learn more about how to survive within investment banking office politics, a very essential and much needed skill. It is critically important to know, how to make sure you can "get recognized" enough by the Managing Directors who write the checks, in order to get paid that mythical 7 figure income, but little else. 

It gives a curious account of one man's view of his role in a huge event, but is kept at the main character's human level. This is much less about how the big picture of the global credit crisis really came together in any clear form. When you are in the center of things, you often do not realize the size of the market all around you.

For anybody who has spent a few years in any front office role, the descriptions all ring true, and the author has clearly been there. However, there was nothing really new or too insightful, just great observations of a certain point in time. I found it similar to a trash magazine snack for the mind, a sugar rush equivalent. 

It was hardly a satisfying mental meal, but that was not the point. Like a fast food burger, it still satisfied a certain need with enough written details to quench a thirst for a financial story break over the weekend. Highly Recommended!


Please visit us for our Friday Feature Review where TMJ Partners will review books, movies, and anything else with a financial theme.  Thank you for reading and learning more about how money is made in finance!

If you are interested in Sales & Trading focused roles in Asia or Japan then click here

あなたはアジアや日本の金融の役割に興味がある場合は、こちらをクリックしてください

For more Buy-Side or Sell-Side roles in Asia-Pacific, contact our TMJ Partners Japan & Asia Finance team in Tokyo.
                  
                              Mark  Pink                                             Shinichi Nagasawa
                      Tel + 81 3 3505 3891                                    Tel  +81 3 3505 3891
          Email pinkmark@tmjpartners.com                 Email nagasawa@tmjpartners.com

Friday, September 9, 2016

Friday Feature Book Review: Swimming with Sharks: Joris Luyendijk サメと泳ぎます: ヨリス ライエンダイク

This is an excellent overview of the World of Finance and its unique culture. The author started the project knowing nothing about anything financial. Via interviews he figures out as a true beginner how all of the parts fit together. This was a blog project started by the UK newspaper "The Guardian" and gained a lot of popularity. Many in the public started bashing bankers of all types. We learn that, "it is not the people that are bad, it's the culture". One defense was curious. Saying that all bankers are bad is like saying "all athletes are bad because a few are caught for doping". I can see the logic now with that observation.

We learn a lot about the functions of different people with a bank versus a securities company versus a regulator. We learn about how front office traders (the tigers) differ from those within middle (the type B personality chimpanzees) or back office function (the worker bees). All are considered "bankers" but only a few seem to be the ones who the media go on about, the top 5% of earners. I like the saying, " this job involves selling your soul for a good salary", that does seem correct.

The Top 3 Takeaways from this book that really impact any reader are:

1) There is no single person or small group who was responsible for the Great Financial Crisis of 2008.

2) A globally integrated system of finance with weak laws & guidelines was the true root cause of the crisis.

3) Nothing major has changed within this financial system, and a new trigger like an IT glitch could start a bigger crisis.

How did the financial crisis begin in 2008 anyway? Who was responsible? Why hasn't anybody gone to jail? This was a basic starting point of the blog, but many layers of the financial world are explored. It was important to understand how it worked, or didn't in many key cases. The first thing the author discovers is the "unspoken understandings" that exist within any bank. As an outsider, the author finds out what you can ask about and can't very quickly. he also finds out that no single person, or entity can really be pointed out as uniquely responsible for the crisis.

For anybody already working inside a financial institution, it all rings very true. For anybody looking to get into finance or switch careers, this can be a big eye opener. It really explains what the culture is like, who the people are, and what types seem to do well in certain kinds of roles. As far as a bigger picture on finance though, other thoughts are insightful. Are investment banks "too big to fail" or are now just "too big to save". Are they in fact "too big to manage" anymore? When too many in senior roles do not know what others in the bank are really doing, isn't this a bad sign? 

I come away with more questions on what "should be done by the end. It seems that even for an outside, the system has grown out of control by management and the regulators. How can this be fixed or improved? The amoral nature of the shareholders who now own most of these publicly listed firms, have no real interest in changing the system today. The whole worldwide financial system is interconnected and works in ways it was never intended to. A kind of global evolution gone wrong. It does not matter if Quants, Artificial Intelligence or any other FinTech innovations develop in future. 

The core foundation of global finance seems to need a big re-think. The biggest question is will the world make the changes in time, or will a meltdown in a bigger future crisis force this change only later? Investment Banks, Private Banks, Asset Management, Insurance or any other part of the financial system may need to be redone. I do not have all of the answers today, but after reading this book, I certainly feel that know what issues need to be addressed. Highly Recommended!


Please visit us for our Friday Feature Review where TMJ Partners will review books, movies, and anything else with a financial theme.  Thank you for reading and learning more about how money is made in finance!

If you are interested in Sales & Trading focused roles in Asia or Japan then click here

あなたはアジアや日本の金融の役割に興味がある場合は、こちらをクリックしてください

For more Buy-Side or Sell-Side roles in Asia-Pacific, contact our TMJ Partners Japan & Asia Finance team in Tokyo.
                  
                              Mark  Pink                                             Shinichi Nagasawa
                      Tel + 81 3 3505 3891                                    Tel  +81 3 3505 3891
          Email pinkmark@tmjpartners.com                 Email nagasawa@tmjpartners.com

Friday, September 2, 2016

Friday Feature Book Review: The Billionaire Who Wasn't: Conor O'Clery 無一文の億万長者: コナー・オクレリー

The American billionaire Chuck Feeney, founder of DFS, has a story that is quite amazing. Without him, Apple would not be facing any EU tax bill today. In fact Facebook, Amazon, Google, Microsoft and many others may not have European offices based in Ireland, due to its strong IT talent pool. He kept his wealth & philanthropy a secret, and always remained low key despite being a self made success. 

He was born in 1931, near New York, and grew up catholic in a blue collar working class Irish area. He always seemed a "great talker" with a great wit who liked to hustle and make a buck. Heavy snows were an opportunity to shovel snow as a child. He paired up with the biggest kid in his class "Moose" Foley and knocked on doors to get orders, Chuck got the orders and collected the money. Moose did most of the shoveling, he was only 8 at the time. 

He joined the US Air Force and was stationed in Japan for 4 years, where he worked in communications and learned Japanese. After the Korean war, he got a free college degree under the GI bill, the first ever in his family. He went on to study hotel management at Cornell University, an Ivy league school that did not often accept catholic students at the time. It was the same school where the 2 founders of Burger King went, as did the founder of Alamo rental cars. Many of the students there were entrepreneurs looking to do new businesses. 

He studied French at the Sorbonne in Europe, and ran into a British man selling duty free liquor to US navy sailors. It then became clear that all tourists would be able to benefit from the duty free goods. He visited Hawaii and discovered how the Japanese market wanted to travel more and show the world its arrival in 1964 for the Tokyo Olympics.  The opportunity to bid for the Duty Free Stores in Hawaii popped up and he won the bid. This was just before the introduction of the Boeing 747. The shop soon had a turnover of over US$1million dollars a day. 

The money piled up and more stores were added. Duty Free Stores, now known as DFS became the largest retailer in the world by 1980. They never boasted of the DFS profits and kept a low key profile. Chuck was estimated to be worth US$1.3 billion by Forbes at the time. It was in fact much more. This is just the beginning of his story. He is the first philanthropist to go public on his "giving while living". He started his foundation in 1984, and began to give away billions worldwide, but only anonymously. 

The Top 3 Takeaways from this book that really impact any reader are:

1) There is always opportunity for anybody who likes people and tries to engage. They are all around you.

2) Only if you are working at something and in the middle of it, can you move into a new opportunity seen. 

3) You can only see great opportunities from being on the ground as a participant. Inspiration is never found in any basic plan created with no input from the client or customer.

You could say that he built the first wave of high tech Universities in Ireland starting with Limerick. He has gone on to fund hospitals in Vietnam, lodging homes, bioscience institutes and many other institutions on 7 continents. In 2012, he was given a lifetime achievement award by Forbes and it was presented by Warren Buffett himself! There is too much to explain in this review, but to say that he has left a mark with his life is a huge understatement. It was an amazing read and mind blowing in so many ways. He really was the most influential billionaire you have never heard of. Highly Recommended!


Please visit us for our Friday Feature Review where TMJ Partners will review books, movies, and anything else with a financial theme.  Thank you for reading and learning more about how money is made in finance!

If you are interested in Sales & Trading focused roles in Asia or Japan then click here

あなたはアジアや日本の金融の役割に興味がある場合は、こちらをクリックしてください

For more Buy-Side or Sell-Side roles in Asia-Pacific, contact our TMJ Partners Japan & Asia Finance team in Tokyo.
                  
                              Mark  Pink                                             Shinichi Nagasawa
                      Tel + 81 3 3505 3891                                    Tel  +81 3 3505 3891
          Email pinkmark@tmjpartners.com                 Email nagasawa@tmjpartners.com

Friday, August 26, 2016

Friday Feature Book Review: Benjamin Franklin's The Way To Wealth by Steve Shipside ベンジャミン・フランクリンは、富への道です: スティーブサイドシープ

American history's late great Benjamin Franklin, died a very rich man. He was an inventor, scientist, inventor, diplomat, statesman, and was a highly educated man of his age. He knew the value and pleasure of Bordeaux Wines, fine food and the true value of money. He was talented in many ways, and this book explains many of his favorite principals he felt were needed to be successful. It highlights his 52 best ideas that can help any modern man build a modern fortune. 

Despite his connection to electricity, this is not a list of technology ideas to be the next Tesla innovation. It is more a great guide to know how to focus on what is important and build towards solid profits no matter where you live and work. There are many well known words of wisdom here, that have lasted for over 250 years. One of his favorite maxims was "early to bed, early to rise, makes a man healthy, wealthy and wise". 

In fact, the phrase "No Pain No Gain" is a direct quote from Benjamin Franklin. He fully understood the impact of exercise and the health of any person, but within business as well. Many journalists used trade union pressure help to resist the "pain of having to use" a new PC 20+ years ago. What was not understood was that once learned, the PC helped make the same journalistic work even easier to do in time. The PC was just a tool that made the work of journalism easier to perform than a typewriter. That is a classic business style application of the "no pain, no gain" principle. The pain of learning at first, will help later on after using this newly gained knowledge.

The Top 3 Takeaways from this book that really impact any reader are:

1) There is no easy way to be successful by using short cuts in life or in business.


2) A key driver of success is self discipline. Without it high standards lower and performance suffers.

3) Success is often a combination of many personality factors. Any key founder or entrepreneur has, not just one single talent only, often many skills.

This book goes on to give not only a US version of work & life balance but with a wider international twist as well. How the US is compared to Europe and Asia is refreshing. With the phrase "be the driver, not the drone". The concept of making sure "you drive the business and not have the business drive you", was known long ago. It is not a modern problem of the last 30 years due to technology. It is a surprise to learn how many of these modern guides are actually very old and proven rules to success.

The list is long and the modern interpretations of them are very well explained. It all helps a modern reader fully understand what a current wealth builder needs to consider today. There are more than fifty of these great ways to wealth, and all are worth absorbing and building into any daily modern routine. Do not be fooled by the years of time. These deep insights help you to make money in your career today, and find a life balance that is worth a fortune in effort. Very highly recommended.

Please visit us for our Friday Feature Review where TMJ Partners will review books, movies, and anything else with a financial theme.  Thank you for reading and learning more about how money is made in finance!

If you are interested in Sales & Trading focused roles in Asia or Japan then click here

あなたはアジアや日本の金融の役割に興味がある場合は、こちらをクリックしてください

For more Buy-Side or Sell-Side roles in Asia-Pacific, contact our TMJ Partners Japan & Asia Finance team in Tokyo.
                  
                              Mark  Pink                                             Shinichi Nagasawa
                      Tel + 81 3 3505 3891                                    Tel  +81 3 3505 3891
          Email pinkmark@tmjpartners.com                 Email nagasawa@tmjpartners.com

Friday, August 19, 2016

Friday Feature Book Review: Zero to One by Peter Thiel (Billionaire) ピーター・ティール : ゼロ・トゥ・ワン― (億万長者)

This book will make you rethink where modern technology is going, and how it will change any future society. This is not what I expected. More of interest to any reader is how we the people, will change in a more positive way via technology. Maybe I thought this would be a simple one way message by a billionaire. I was wrong. It is a deep reflexion of observations from various startups. A great list of notes,

The author Peter Thiel, is trying to enlighten the reader with what he has seen so far, and suspects is coming later in future as well. He is not making a more expected case of "this is what I know, listen to me, because I know the way forward". It is not a rich guy talking about himself and his world views.

For some reason, I opened this book with some prejudice, and was surprised by the neutral opinions that may help many trying to know what could happen in the future. The author is a special person, and it shows in some of his observations. He knows that out of the box thinking is a rare thing. He understands that great ideas are not easy to come by. Personal drive and ambition vary with every individual. There is no formula for easy success. Not much can easily be repeated.

One of the most interesting points in the book is that skill sets need to match. A very talented person who can come up with a great idea, is often not the best person to grow it to its full potential. This should not be seen as negative. The founder of Groupon, who no longer runs the firm he founded, is a good example. To have conceived of a concept and brought it to market, is a great accomplishment. 

Taking it to IPO or any other market dominance is only secondary. Great managers can manage and grow businesses. However, those same managers cannot usually come up with the original idea in the first place. It is a different skill set. It would not be reasonable to think that all CEO startup creators can do everything A-Z. That just does not happen often and should not be expected. Just being of that high performance level is all that should be looked for, nothing more.

The Top 3 Takeaways from this book that really impact any reader are:

1) There is a clear pattern of personality types working hard that keep being successful, it is never pure luck.


2) The people, the team or the management are what drives long term success never a single product.

3) Facebook had many non-believers before its IPO. The original concept was able to pivot into mobile and never looked back. This was due to the executive team. 

The best thing about this unique set of observations, is that they are building blocks that can help all businesses. It can help anybody figure out where technology may be going, and the business chances that will result. It also gives a lot of insight into how to really take on any new business, define its goals, and complete a mission that counts. Being realistic in life and business, is what you get a true sense of from Peter Thiel, the co-founder of PayPal. Originality is appreciated for its rarity. The title Zero to One explains this well. 

Coming up with a real innovation changes the economic game with concrete value. You go from nothing (zero), to something (one). A second imitator, never comes close to bringing the same impact to the same economy a second time. At best, they can seem to be 1.1 in full impact. You could say that Google represents this. Many people around the world now have better access to information from Google, the world's economy is better today and has improved from Zero to One. Bing and many other search engines, have not had the same life changing impact, only a fraction more at best. A true "game changer" is significant, an incremental improvement is not. This is just one of many examples that I learned from in this book. It turned out to be a great surprise. Highly Recommended!

Please visit us for our Friday Feature Review where TMJ Partners will review books, movies, and anything else with a financial theme.  Thank you for reading and learning more about how money is made in finance!

If you are interested in Sales & Trading focused roles in Asia or Japan then click here

あなたはアジアや日本の金融の役割に興味がある場合は、こちらをクリックしてください

For more Buy-Side and Sell-Side roles in Asia-Pacific, contact our TMJ Partners Japan & Asia Finance team.

    Tokyo                                                                Tokyo
             Mark  Pink                                                  Shinichi Nagasawa
      Direct + 81 3 3505 3891                                       Direct  +81 3 3505 3891
            Email pinkmark@tmjpartners.com                         Email nagasawa@tmjpartners.com