Tiffany Eiselstein
Professor Chen
November 3, 2014
Liar’s Poker
Liar’s Poker, the namesake of Michael Lewis’ in-part autobiography, is a game created
by the bond traders of Salomon Brothers in the 80s. The objective of the game is to fool the other
players by making a bid. The bidding, “escalates until all the other players agree to challenge
a single player’s bid,” much like trading bonds, “only then, do the players reveal their serial
numbers and determine who is bluffing whom.” (17). The game, merely a small part of Lewis’
story of his experiences, sets the tone for the rest of the story. It begins just before his time at
Salomon and follows the rise of mortgage traders to the eventual fall of Salomon Brothers.
After graduating from Princeton with an art history major, Michael Lewis begins, as were
many, looking for work on Wall Street. His botched interview with Lehman lead him to realize
that there just might be more to Wall Street than money. He goes on to finish his master’s degree
where he is invited to the fateful dinner that surprisingly lands him a job at Salomon Brothers.
This puts him into the famous five month training program, the “finest start to a career
on Wall Street” (59). From here, Lewis tells us of Lewie Ranieri and the rise of the mortgage
department. The department soon becomes the most profitable department at Salomon.
Unfortunately, the managers of the department lose faith and leave, causing the demise of the
mortgage department.
Lewis then returns to the telling of his own experiences on his first day of work on the
London trading floor. Lewis learns slowly the art of imitating others. He eventually works his
way up the ladder, finding real success after managing to sell a priority of $86 million of O&Y
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bonds.
Shortly after, the firm takes a slide downhill. Salomon is bought out by their enemy,
Drexel Burnham, after a contretemps between two key managing directors. Lewis stayed with
the firm until the beginning of 1988 with no knowledge of what would happen to the firm. He
ends the book with a summary of his feelings, saying how his experiences at Salomon shook his
faith and changed his beliefs.
Michael Lewis’, Liar’s Poker, offers many valuable lessons and insights into the life
of Wall Street’s “Big Swinging Dicks” (56). The first of many is a better understanding of the
market, trading, and Wall Street itself. Although the way things work on Wall Street may have
changed since the 80s, Lewis’s detailed account and explanation really helped me to understand
just exactly how everything fits together.
Perhaps, the most valuable lesson this reading can give is that first hand experience is the
most important tool in learning. Any student will surely say that lecture is never enough to learn
and understand the key concepts in any subject. One must become involved, even if it means
taking a loss, and success will follow. Success does not come easily on Wall Street. Jobs are
hard to come by and when it does happen the real work begins--finding the balance of risk and
reward. There largest trade-off in life is between risk and reward. Michael Lewis demonstrates
this by comparing the corporate financiers and the “Big Swinging Dicks” of the bond trading
floor (56). Those who are too timid to dip their toes in (financiers) have a more secure grasp
of the future, but ultimately give up the huge success and reward of taking risks (trading
bonds). Trading, like many things in life, requires confidence, intelligence, dedication, but most
importantly, risk.
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Michael teaches that wisdom can stem from simple imitation. During the training
program, Michael learned that, “landing a good job was one part luck, one part ‘presence,’ and
one part knowing how and when to place your lips firmly to the rear end of some important
person” (52). It was through his imitation of top traders that Michael learned the essentials
of becoming a success at Salomon. Granted, the process of learning was tough, but he pulled
through and became a success himself.
One thing that was particularly interesting was how Lewis’ views changed towards
the end of his time at Salomon. In the epilogue, Lewis speaks of the beliefs of his father’s
generation. The belief that the amount of money one made was a measure of his well-being and
more importantly, his impact on the world (308). He states that after two years on the job he
managed to shake his beliefs about the meaning of making money. He goes on to say that he
does not believe that he learned anything practical from his time at Salomon, but I beg to differ.
I believe that he did learn something. He says in the very last paragraph, “If I made a bad trade,
it’s because I wasn’t making a trade” (309). To me this speaks volumes. One cannot stand by and
wait to be successful, rather, success is only achieved through action. Often, the best actions are
the ones that are “unexpected” and “cut against convention” (310).
I, for one, certainly hope that holds true.
Works Cited:
Lewis, Michael. Liar's Poker: Rising through the Wreckage on Wall Street. New York: Norton, 1989. Print.
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