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The Wisdom of Finance: Discovering Humanity in the World of Risk and Return

4.07  ·  Rating details ·  1,131 ratings  ·  130 reviews
"A fascinating new perspective on modern finance," --Oliver Hart, 2016 Nobel Laureate in Economics

"Lucid, witty and delightfully erudite...From the French revolution to film noir, from the history of probability to Jane Austen and The Simpsons, thisis an astonishing intellectual feast." --Sebastian Mallaby, author of The Man Who Knew: The Life and Times of Alan Greenspan

Hardcover, 223 pages
Published May 23rd 2017 by Houghton Mifflin Harcourt (first published 2017)
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Ishwardeep Singh
May 19, 2017 rated it it was amazing
Full disclosure: I'm a former student of Mihir Desai. I had a lot of expectations from this book knowing Mihir as a teacher, and knowing his ability to break down complex ideas into their simple, intuitive, core understandable by a lay person. This book exceeded those high expectations by showing me a different side of Mihir - his understanding not only of Finance, but also of life in general. Not only does he explain ideas in Finance with elegance, but he relates them to ideas in life ...more
Jul 05, 2017 rated it it was amazing
Quite possibly one of the most interesting books I've read in years. The author takes stories far and wide - from Jane Austin, to Stringer Bell from The Wire, to The Simpsons, Shakespeare, The Producers, and so many more - to craft a story of the basics of finance from the perspective of the humanities. There is amazing insight at every turn as he draws from literature, history, art, film, and theater to illustrate basic concepts of finance and their importance in life. I can't recommend this ...more
Jason Furman
May 10, 2017 rated it it was amazing
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 ...more
Oct 20, 2019 rated it it was amazing
Shelves: favorites
‘Wisdom of Finance’ was a book that really punched me with fresh ideas; it’s been a while since I experienced this level of 'new ideas flow' from reading. It doesn’t have anything to do with me working in finance (maybe a little, like 5%). Even though it contains multitude of cases happened in the finance world, the book itself is not about finance – it’s about values, relationships, commitments, and many more. Mihir Desai takes basic ideas about risk and return, capital asset pricing model etc ...more
May 12, 2019 rated it it was amazing
Shelves: finance
What an incredibly smart journey about finance. It felt like I was engrossed in his Harvard Business School class and left wiser from it. His ability to use literary classics to explain finance is so impressive. This might be one of the wisest and interesting books I’ve ever read.
Nov 25, 2017 rated it liked it  ·  review of another edition
Shelves: business, audiobook
When I read Piketty’s “Capital in the Twenty-First Century” I found that I really appreciated his efforts to explain wealth and capital in historical context by referring to the fiction of the times, especially Jane Austen’s. By using the descriptions of the characters and their place in the world from those fictional stories written centuries back, you understood how wealth made itself known, how money was spent, and how wealth brought status and the ability to purchase fine tools (e.g. a horse ...more
Dec 13, 2017 rated it it was amazing
This was such a beautiful and relevant book that I did not think I needed to read. Finance gets a bad wrap, but the issues finance deals with are human issues. Desai shows this through literary criticism and explanations of core financial issues. Risk, for example, is about the bad stuff that can happen to you in life. Finance can show us how to deal with this risk. I teach contracts and I'm always trying to convince my students that contracts are about trust and relationships.

I wish he had
Feb 25, 2018 rated it it was ok
Shelves: non-fiction
As the title implies, this book attempts to bring together the worlds of finance and humanities. It uses literary and other assorted media references to illustrate particular financial concepts, and argues that finance can be used for the good of humanity, despite the finance's reputation as greedy and evil.

Although I earned my degree in a social science, I find myself working in a finance-related field. I feel pretty ambivalent about my current career, and I hoped that this book might open my
Ian Cook Westgate
Sep 20, 2018 rated it it was amazing
Given the odd premise (bouncing concepts of finance off of poetry, literature, and pop culture), I went into this book with rather low expectations. Needless to say, they were surpassed in every way. As someone who has struggled for some time to pierce the veil of complexity surrounding the financial world, this book has helped immeasurably in helping me to understand it, and in an oft entertaining way.

I don't know how appealing this book would be to someone who actually works in or with Wall
Mihir Desai does an excellent job in this book laboring nourishing and healing the divide that Modern Finance's reputation has taken. He humanizes and speaks of the profession as 'ennobling', while acknowledging those who tarnished it.

Desai acts as a sincere and welcoming bridge using popular movies, stories, and uncommon subjects to make parallels between things like leverage, options, risk, and a whole variety of other concepts.

For anyone who wants to see a more human, personable, and
Jun 07, 2017 rated it it was ok  ·  review of another edition
The one who are looking for "how finance works or academic information about the subject" will find "TOO FEW" in this short book. The author extremely focused on "intersection of finance and everyday life(love, romance,movies, music, insatiability, philosophy)" .. and I think that is boring for FİNANCE...
Nov 27, 2019 rated it it was amazing
I met this professor from his “Leading with Finance” class at HBS. Excellent resource to understand finances. No figures or numbers found in his book. He takes you from personal stories and takes you to a deep understanding of finance terms and concepts. Either you are new on the econ or finance room, you’ll get something new out of it.

Arts, history, films, literature, etc. makes part of the stories of this book. I got a way deeper understanding of the insurance business and his importance in
Mar 12, 2019 rated it it was amazing
My personal rating is 9/10. I mean, just go read it. My favourite chapters are 'On Value'+ 'Becoming a producer' + 'No Romance Without Finance'. I think what sets the book apart is the intersection of economics, politics and history to explain the evolution of finance and it's main concepts. Desai does a great job to help outsiders (external to the finance industry) understand concepts like portfolio theory, hedge funds etc. Book can be finished within a few-days (4-5) maximum.
Apr 21, 2018 rated it really liked it
4.5 stars.
David Wilusz
Sep 05, 2018 rated it really liked it
The author echoes my feelings that, rather than being at odds (or even at war), the humanities and sciences - finance in particular - are in fact complimentary and intertwined in ways that few today appreciate. Leveraging wide-ranging examples, from Jane Austen to the Producers and George Orwell, the author frames finance in everyday human terms, defending the usefulness and practicality of risk management in particular, something near and dear to my heart. The author is clearly well-read and ...more
Eunjun Choo
Jul 04, 2017 rated it it was amazing
As a noobie to finance, I wanted an accessible finance text to introduce me to what the heck is finance. Fortunately, this book has exceeded my expectations. Even though previous background in finance would have helped, Desai describes finance with such a humanity that even a noob like me was able to understand and apply finance strategies to my daily life from spending proportional amount of time on "High-beta assets" such as acquaintances to "negative-beta assets" such as my family.
R. Saunders
Sep 03, 2017 rated it it was amazing
An obvious choice for my 5 star rating, I found The Wisdom of Finance, Discovering Humanity in the World of Risk and Return (2017) by Mihir A. Desai to be a thoughtful, informative, fun, easily digestible, and memorable read. Certainly this book would be great to own though my edition was from the library. You will like this book if you have a checking account or a loan or have ever made a commitment to yourself or others - pretty much everyone.

Desai uses broadly researched literature - from
Vikash Anand
Aug 14, 2019 rated it really liked it
The Wisdom of Finance by Mihir Desai delves into core financial concepts i.e. insurance, options, leverage, valuation, diversification, capital asset pricing model, bankruptcy etc. connecting with various analogies of our social life. The book introduces core financial concepts taking different perspective from our general personal life than decisions as a finance professional.

Appropriate Financial structure is extremely important for the growth of the economy. Lack of inappropriate financial
Vladislav Burda
Jan 08, 2018 rated it it was amazing
The book is tremendous help for me as entrepreneur to understand the history, the values and boundaries of finance.
Mihir is right - finance is everywhere. And their omnipresence could be found not only in business, but in literature, movies and even art.
I was not only reading the book with pleasure but watched some movies like Double Indemnity & Working Girl, for which book was perfect illustrator of their use.
The main concept of:
Risk taking,
Jonathan Carey
Oct 25, 2017 rated it really liked it
I think that the book brings up many things to consider in life and in finance. My favorite is how he describes how a Revolutionary War financier ended up in debtor's prison and how that experience led to future reforms in bankruptcy law so that risk takers would not be punished too severely. "Failure, when we encounter in ourselves or in others, should not be understood or seen as a moral defect. Inevitably, risk-taking will lead to failure, and failure should be viewed as a bad outcome with an ...more
Bryan McNeil
Aug 09, 2017 rated it it was amazing
Those who know me will think I've lost my mind, but this book is categorically awesome. Professor Desai is a true master of weaving together wildly disparate examples from all corners of human life to illustrate concepts from unrelated fields. The chapter on leverage is one of several high points. I understand leverage in terms of Archimedes, basic physics, and even carpentry and related applications. As relates to finance, however, leverage takes on a dark and ominous tone of jargon, not for ...more
The Wisdom of Finance is a provocative title for any book. One, it has to provide wisdom, and two, the wisdom must be traceable to finance. It is to Mihir Desai's credit that he's able to do both, albeit with a slight stretch of credulity.

Desai's greatest accomplishment here is to humanize Finance. As he himself acknowledges, Finance has become a kind of bad word even among those who rely upon it. Being the very foundation of both modern economics and modern society, Finance cannot afford to be
Gaurav Moghe
Aug 12, 2017 rated it it was amazing  ·  review of another edition
Finance can sound both cryptic and evil. Cryptic, because of various financial instruments with tedious names which keeps the lay person from trying the understand them. Evil, because of the image problem that it has created for itself since time immemorial. Finance, as the conventional wisdom goes, is ultimately about extracting profits at the expense of, well, anything.

But one guy wasn't okay with how finance gets viewed. Mihir Desai, Professor of Finance at HBS, decided to come up with this
Jul 02, 2017 rated it liked it
Novel explanation of financial notions via classic literature and daily life. No maths, minimal jargon, no tangents. A text the NPR crowd would like to think of as accessible (oh, I read those books too I "get" it), but for those of a broader mindscape. Unfortunately, the links to highfalutin literature excludes a swath of populace who could also benefit from the layman's interpretation. The lessons contained within the tomb are beneficial to all.

Greatest pique of interest was towards book's
May 21, 2019 rated it it was amazing
This is one of the few books that explain finance very clearly so that anyone can understand. Clearly Desai knows his stuff very well. He lamented that finance has been vilified too much and some perspectives are needed. He did just that very well indeed.

1. Insurance: take average risk and provide protection. Beware of averse selection: healthy people don’t buy so Options are a kind of insurance; however it can encourage excess risk taking.
2. Talents: real talent in finance (better than
Cullen Haynes
Dec 20, 2018 rated it it was amazing  ·  review of another edition
One of the most unique and refreshing books on finance I've ever come across; graphs are replaced with quotes from the classic texts and films of our day 'Remains of the Day', Pride and Prejudice' and 'The Producers' to name but a few.

Josef de la Vega, once described finance in 1688 as both "the fairest and most deceitful business...the noblest and the most infamous in the world, the finest and the most vulgar on earth".

Obviously incidents such as the GFC show it's darker side, however, what of
Aug 21, 2017 rated it really liked it  ·  review of another edition
Mihir Desai was my favorite lecturer when I attended the seven week General Management Program at HBS last year. In our last lecture with him he presented something different, an attempt to link all the core principles we learned with real life. Then he told us that he was developing the ideas for a book coming in 2017. Needless to say, I bought this book the day it came out.

I am very interested in the book's premise which is "why finance needs more humanity" as well as Mihir's goal of finding
Jun Chen
May 24, 2018 rated it it was amazing
I was so excited when hearing Mihir Desai was doing the opening remark at the Annual CFA Conference in Hong Kong last week (closing was by Danny Kehneman). Desai wrote one of the best books I have ever read - the only book I have come across so far that perfectly marries the rule of Finance (Economics) with humanity. Coming from a liberal arts background, I work my day job in a semi-finance field and find my solace in literature or philosophy at night - finance and the art of thinking seem to be ...more
Jul 07, 2017 rated it it was amazing
I hope having an undergraduate degree in Liberal Studies, which relies on a multidisciplinary approach to learning, problem solving and making sense of the world, grants me some authority to say it is an understatement to characterize Mihir Desai’s The Wisdom of Finance as an intellectual tour de force. In 178 pages, Desai craftily amalgamates deep insights from finance, theology, philosophy, history, literature (and even rap music) etc to give the practice of finance a heart and a soul, while ...more
Sep 05, 2019 rated it it was amazing
This book is hard to describe, but what isn't hard to tell is the brilliance of Desai. A Harvard professor, he uses examples from philosophy, literature, and all forms of media to describe the role that finance plays in our lives. His examples of financial terms in the context of how they affect everyday life somehow give you a more concrete and understandable definition of complex terms- even if you aren't a finance student. Options and leverage seem less scary with his capable writing.

He is
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