I had a great time reading the following group of related books.

How To Beat the Dealer by Ed Thorp.

You might think this is lame and outdated, but it will clue you into how bond traders think. In fact, Bill Gross of pimco was so inspired by the book that he went to Vegas and became a gambler (before pimco but OTW). That book also is the holy grail for card counting. It will up your blackjack at least, and prepare you for the next book.

Liars Poker by M.Lewis

Lewis actually mentions Thorp, b/c Thorp went on to become a wildly successful trader throughout the 90s: he even called out B.Madoff as a crook in the early 90s (dude knew his finance games and clearly the SEC did not), and Thorp developed a lot of arbitrage trade strategies that are common today. All of this and more as M.Lewis clues you into wallstreet cronies and big bond trading, insider talk about salmon smith barney, and just how sketchy that industry really is ...

Ok now you know a few things about wallstreet and trading, now go to:

The Big Short by M.Lewis

Lewis again with an awesome breakdown of how/what of the credit bubble and various characters betting against that massive momentum as it builds. Really this book is about personal fortitude: having a vision as a trader and sticking to it, even when the rest of the world is betting against you, even when your vision implies the rest of the world is d0000med in an almost end-of-money kind of way :)

Now move into an interesting layer of finance, which all of us Hackers will enjoy ...

The Quants by S. Patterson

This has the making of a great movie if only hacking were interesting on film (too bad its not really like Hugh Jackman in Swordfish!). Buffet: "beware of geeks bearing formulas" ... exactly and this book is all about the buildup of these trading systems and the people behind them, the little bill gates (relative to bank-account) characters that run those giant quant funds ... And just questions on layering probability and the feasibility of trading into this complexity.

Read on ...

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