Brad Feld

Tag: michael lewis

A cliche I’ve heard many times is “Wall Street Always Wins.” The first week of 2016 in the public markets has been an entertaining reminder of this.

In 1998, when I started ending up with lots of shares in public Internet companies, I came up with a formulaic approach for any public equities that are distributed to me (either from our funds or other VC funds). The approach was mathematic, dispassionate, and easy for me to execute. Over the past 18 years this strategy served me well.

In 2002, I decided not to own any public company stocks except for companies that I directly invested in as private companies. I sold whatever remaining public company shares I still had post Internet bubble and took an entirely different approach to the public markets.

While I have still have plenty of public equity, it is through either index funds, equity fund managers that I have a long term relationship with, or a few companies that I invested in when they were private companies. And, for the last category (the shares I own personally), I still use the long-term formulaic approach I came up with in 1998.

I’m a big believer in the Bogle school of thought about owning the market, rather than trading stocks. As a result, I don’t have to pay attention to the public markets on a daily basis. Or a weekly basis. Or an monthly, quarterly, or annual basis. Or basically, at all. That lets me focus all of my mental energy on what I like and what I think I’m good at (which is not being a stock picker or trader.)

The first finance course I took at MIT was 15.401: Finance Theory I and was taught by Stewart Myers. I remember the cover of the textbook, fondly called Brealey and Myers, what the Capital Asset Pricing Model is, and a few other things. Even though my future business partner Dave Jilk told me that he enjoyed the finance classes he had taken, I didn’t, and after taking 15.402 (which was required for my masters degree), I was done with corporate finance after taking the final exam.

Except – not really – since a big part of my job is corporate finance, just for startups and fast growing companies. However, unlike the evolution of the 15.4xx finance classes, and the extreme amount of financial engineering and financial innovations (both good, bad, and questionable) that came out of MIT research and MIT professors, most of the math involved for a venture capitalist can be done in one’s head, as long as you are decent at arithmetic.

But, for some reason, I occasionally like reading about Wall Street and corporate finance. Some of it is akin to watching the inevitable train wreck that surfaces in books like The Big Short. Some of it is to try to understand human motivation and behavior in a sphere that I don’t encounter often. And some of it is just to learn something that, in some parallel universe, I might be participating in.

Flash Boys was a good capstone to the last week of wallowing in the global financial crisis of 2008, which I began by watching the movie The Big Short. Once again, Michael Lewis took a hard topic and made it accessible, fun, interesting, and character heavy. After reading the book and then poking around IEX, the alternative trading system at the center of the story, I got a fun bonus by discovering that Spark Capital and Bain Capital Ventures are both investors in IEX.

I’m probably done for a while reading about Wall Street. But, once again, after reading Flash Boys, the cliche “Wall Street Always Wins” rings true in my brain.


I’ve generally ignored the mainstream media during the original US financial crisis and the more recent European financial crisis. My lack of interest in mainstream media (TV, newspaper, and magazines) – especially about non-tech related stuff – is well known. The last domino to fall was when I finally stopped listening to NPR a few years ago. I view the signal to noise ratio as terrible, I don’t believe most of the information, I often think the people talking have no clue what they are talking about, and as many things unfold in real time, the people involved have no idea what’s actually going on. Oh – and it’s part of the macro that – while it certainly impacts me, doesn’t directly affect me, nor is there anything I can do about it. So I ignore it and instead focus on things I can make an impact on.

But I like to read and learn from history. There are a number of writers who I think do a magnificent job of writing in different areas – for example Walter Issacson on Biography and Michael Lewis on Financial History. So I was excited when Lewis’ new book, Boomerang: Travels in the New Third World, came out about the European financial crisis. I read it last night after we had dinner with some good friends who we hadn’t seen in a while.

It was awesome and kept me up well past my normal bedtime. Lewis writes like a novelist so his story completely sucks you in. In the case of Boomerang, he added in a travelogue component and went to each of the countries he wrote about. The book starts in Dallas, takes us to Iceland, to Greece, to Ireland, to Germany, and finally back to the California. Lewis covers both what happened, what’s happening, what could happen, and why in a book that gave me more history, context, facts, and personalities than watching hundreds of hours of CNN, CNBC, Bloomberg or reading the Wall Street Journal and New York Times daily could have. And I trust his synthesis – it feels very agenda-less and is written clearly from his point of view.

If you want to understand what is going on in Europe, especially Greece, Ireland, and Germany, how it happened, why it matters, and where it might go, read this book. And if you just are curious and want a good “real life is better than fiction” kind of read, you can get that also from Boomerang.