Friday, 17 May 2013

A career on Wall Street? Consider first the gospel of the drunk drivers and the cheating spouses.

The 32-year-old investor who spotted the subprime bubble in 2004 warns students against mortgaging their futures for short-term gains

Immortalised in the brilliant book The Big Short as the man whose "mind had no temperate zone", Mike Burry spoke to UCLA economics students last year.
After relating how he was hounded by US authorities merely for speaking out on their failure to see not just what might happen, but what he was sure would happen to the financial system as the poison of subprime coursed through the veins of the banks, he cautions his young audience against the seductions that will come their way.
"If you're considering a career on Wall Street or Washington DC you should be aware of the social proof that operates there. This is that many if not most people will be doing questionable things that obviously make money and obviously earn respect from common peers. 
If you find yourself in such a place I would ask you to consider a rule I learned as a physician - 'First do no harm'.
Besides life is not that short. Life is well and long enough for you to come to regret any activity or habit involving an exchange of long term risk for short term benefit. This is what many if not most Americans did during the refinancing and consumption boom of the last decade and it is what our government did riding on the boom. This is also the gospel of drunk drivers and cheating spouses.
Of course, when you encounter the opposite, the short term risk exchange for long term benefits, consider hitting that button again and again and again."
You can skip to 14m in the video if you are in a hurry but I recommend watching his whole speech from 2m30 in.

A flavour of The Big Short is in the Vanity Fair article Michael Lewis wrote about Burry and subprime crisis.
Notice how untidy his office is despite knowing a photographer was coming. He just did not care what judgement readers might make. In fact it probably did not even occur to him to tidy up.


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