Friday 13 September 2013

Weekend Reading: A Strong Capitalist Recommendation

A couple of weeks ago an old mate of mine (from *ahem* Enron days, since you asked) let me know he was putting out a book - on investment, trading, entrepreneurship, business in general, gambling - and Enron.

Now of all the stuff written about Enron - and that's a few forests' worth - not a single book has come from a true Enron insider.  The omerta has been 100%.  (And before anyone cites Sherron Watkins against me, she wasn't very deep inside at all - double meaning intended.)

So I was quickly into Kindle for Lucky and Good: Risk, Decisions & Bets for Investors, Traders & Entrepreneurs, by John Sherriff.   (At mates' rates it was free, but it'll only be pence anyhow.)  Sherriff was a true Enron insider, as well as being the most creative, energetic deal-maker I have ever met, with the best intuitive feel for risk / reward trade-offs   - and that's from a cast of very many fine dealmakers at the Crooked E.  He's a damn' good poker player, as well ...

Sad to relate, though he peppers the book with Enron stories to illustrate his many excellent points he tells nothing about the scandalous stuff: so the true insiders' book is still to be written.  But that's the only disappointment in an otherwise truly first-class read.  I can't recommend it highly enough for the typical C@W reader (and not just for the traders and investors), who won't just enjoy it tremendously but will probably do better business having done so.  There are so many powerful - and practical - points made, all of which are IMHO entirely correct, on critical issues such as market pricing, liquidity, how to think of sunk costs, macro-trends, marginal advantage, fast feedback, long-term vs short-term, finding free options, understanding what your long and short positions are: and he goes as far as it's probably possible to go in helping people learn to be commercially creative.

In summary, the whole Enron arsenal.

Even better, it's written with a very light touch - for an American (if I dare say this) Sherriff has a very Anglo-oriented sense of humour.  (He's complimentary about several aspects of our regulatory and legal systems as well.)

And he's brutal on the subject of the legal profession ...

Whenever I find myself teaching on business-related topics, students always ask what they should read before attending the course.  I've never before had a single book to recommend, but now I do.



Elby the Beserk said...

"And he's brutal on the subject of the legal profession"

And auditors?

Nick Drew said...

well certainly the rating agencies!

of course Enron brought down Andersons, and quite right too, they were 100% complicit

(I remember walking past a conference room full of AA people of ashen and sickly palour, and remarked to an accountant-colleague: they all look very queasy ... he replied, that's because they've just been told what they have to sign-off on)

the question is: how come one or two choice law firms I could mention didn't go down too ..?

andrew said...

50% in
I love his use of diagrams.
He has some good insights on the creative process.
Dont like his baseball/us rugby stories - but I am not from the right continent.

Nick Drew said...

andrew - glad you like it

it's always difficult to 'explain' how to be creative - rather like being artistic - but in my experience even those who don't feel themselves to be naturally so can be taught a few tricks, at least

BTW, how much did it cost you ?