I usually don't start off my reviews with an opinion, but I don't want you to miss this one. I LOVED Confessions of a Wall Street Analyst by Dan Reingold and if you're at all interested in how Wall Street really works, you'll love it too.
Book Summary
Here's a summary of the book from its website:
What Eliot Spitzer never told you--here is the true story of a top Wall Street player's transformation from a straight-arrow believer to a jaded cynic who reveals how Wall Street's insider game is really played.
Dan Reingold was one of the top analysts on Wall Street for fourteen years and Salomon Smith Barney analyst Jack Grubman's chief competitor in the red hot sector of telecom. Reingold was part of the "Street" and believed in it.
But in this action-packed, highly personal memoir written with accomplished Fast Company senior writer Jennifer Reingold, the author describes how his enthusiasm gave way to disgust as he learned how deeply corrupted Wall Street and much of corporate America had become during the roaring stock market bubble of the 1990s. He shows how government prosecutors, even New York Attorney General Eliot Spitzer, never got to the heart of the ethical and legal transgressions of the era. And how they completely overlooked Wall Streeter's pervasive use of inside information, leaving investors--even sophisticated professionals--cheated.
Confessions of a Wall Street Analyst provides a front-row seat at one of the most dramatic--and ultimately tragic--periods in financial history. Reingold shares details of life on Wall Street that few can risk disclosing. He recounts his introduction to the world of Wall Street leaks and secret deal-making; his experiences with corporate fraud; and Wall Street's penchant for lavish spending and multimillion dollar pay packages.
Reingold spars with arch rival Grubman; fends off intense pressures from Wall Street bankers and corporate CEOs; and is wooed by Morgan Stanley's CEO, John Mack, and CSFB's convicted uber-banker Frank Quattrone.
Reingold describes instances in which confidential deals are whispered days before their official announcement. He recalls the moment he learns that Bernie Ebbers' WorldCom was massively cooking its books. And he is shocked to have been an unwitting catalyst for a series of sexually-explicit emails that would rock Wall Street, bring Jack Grubman to his knees, and contribute to the stepping aside of Grubman's boss, Citigroup CEO Sandy Weill.
Some of Reingold's stories are outrageous, others hilarious, and many are simply absurd. But, together, they provide a sobering expose' of Wall Street: a jungle of greed and ego, a place brimming with conflicts and inside information, and a business absurdly out of touch with the Main Street it claims to serve.
The book ends with a series of important policy recommendations to clean up the investing business. In the tradition of Liar's Poker and Den of Thieves, Confessions of a Wall Street Analyst is a no-holds-barred insiders' account that will open the eyes of anyone who invests in the stock market.
I realize that this reads more like a commercial for a mini-series than for a non-fiction book, but it's true -- that's what this book offers. It's literally a very behind-the-scenes look at the job of a Wall Street analyst (the people who recommend whether or not to buy a stock) and at Wall Street investment bank during two highly-charged periods -- first the go-go years of telecom and the Internet and then the crashing of it all (and bankruptcies and criminal charges that followed). You get inside dirt on WorldCom, MCI, AT&T, as well as a ton of other companies that were billion-dollar businesses one day and worth pennies the next.
My Thoughts and Rating
I found this book to be extremely fascinating on several fronts. First, simply as a story, it reads like a work of fiction, certainly not dry like many non-fiction books are. Once I picked it up it was like I was reading a popular fiction story -- I couldn't put it down -- I had to know what happened next.
Second, the peek into the life of an analyst and inside workings of firms like Merrill Lynch, Salomon Smith Barney, Morgan Stanley, and CSFB were very interesting as were the details on the various cast of characters the author knew and dealt with personally (big, recognizable names from the business and investment banking world). It's truly an insider's view of some of the most explosive years on Wall Street.
Third, the story of Reingold himself was amazing. From a lowly mid-level executive at MCI into a multi-million-dollar stock analyst and personality was truly something from another world. In addition, I liked how Reingold took some responsibility for what went wrong and how he could have better handled the various situations he found himself in.
Finally, from a personal investing standpoint, it makes you wonder how the individual investor ever makes any money on a stock. This book shows how much more information the investment banks have than the average guy on the street -- and believe me, it's a lot. For me, it reinforced my investment strategy to primarily rely on index funds (which, by the way, Reingold has recommended himself).
One more thing on a positive front -- this from Reingold's website:
The author's proceeds from this book are being donated to charity.
Yeah, it's true that Reingold is already a wealthy man, so what would royalties from a book add? Probably not much. But you have to admire him for the gesture.
I wish I could give this book a higher rating -- I liked it so much -- but it really doesn't rank in my elite list of books because it's only a one-time read. Yes, you'll love it that one time you read it, but it's not like The Richest Man in Babylon, The Automatic Millionaire and The Millionaire Next Door -- all books that you can read several times and learn from each time.
However, Confessions of a Wall Street Analyst by still gets a good rating from me. The Free Money Finance rating for this book (based on my 0 thru 10 rating system) is: 7 Stars.
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