The Wisdom of Finance: Discovering Humanity in the World of Risk and Return – Mihir Desai
The Wisdom of Finance: Discovering Humanity in the World of Risk and Return – Finance is shrouded in mystery for outsiders, while many insiders are uneasy with the disrepute of their profession. How can finance become more accessible and also recover its nobility?
Harvard Business School professor Mihir Desai takes up the cause of restoring humanity to finance. With deft wit, he draws upon a rich knowledge of literature, film, history, and philosophy to explain finance’s inner workings.
Through this creative approach, he shows that outsiders can easily access the underlying ideas and insiders can reacquaint themselves with the core values of their profession. This combination of finance and the humanities creates unusual and illuminating pairings: Jane Austen and Anthony Trollope are guides to risk management; Jeff Koons becomes an advocate of leverage; and Mel Brooks’ The Producers teaches us about fiduciary responsibility.
In Desai’s vision, the principles of finance also provide answers to critical questions in our lives: bankruptcy teaches us how to react to failure, the lessons of mergers apply to marriages, and the Capital Asset Pricing Model demonstrates the true value of relationships. The Wisdom of Finance is a wholly unique book, offering an enlivening new perspective on one of the world’s most complex and misunderstood professions.
PLEASE NOTE: When you purchase this title, the accompanying reference material will be available in your My Library section along with the audio.
By Jasonon May 23, 2017
The Wisdom of Finance is worth reading if only to marvel at Mihir Desai’s amazing mind, wide range, and exciting set of insights. The book undersells itself, claiming to use a range of novels, movies, music, TV shows, philosophy and history to better understand and illuminate finance. And it certainly does that, covering the full set of topics: insurance, asset pricing, corporate finance, principal-agent problems and bankruptcy among other topics. But the book is about much more, including better understanding literature and our own lives.
To give one example that illustrates the astonishing range of Desai’s understanding, consider his illustration of leverage by comparing George Orwell (who went into semi-seclusion for years to write 1984) to Jeff Koons (who at his peak employed 150 people to produce his ideas). He uses this not just to understand the role of leverage in the financial system but also to introspect about his own life where he is on the Orwell-Koons spectrum, and how that relates to happiness.
And did I mention the astonishing range? We have gotten used to Jane Austen and Leo Tolstoy showing up in economics books. But everything from ancient Greek tragedy to Kanye West? All effortless incorporated in many cases with interesting juxtapositions, like the Orwell-Koons example.
If this enjoyable and thought provoking book does not convince you of the wisdom of finance it will at least convince you of the wisdom of Mihir Desai.
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