A Few Nuggets from “Backstage Wall Street”

Site Administrator | May 4, 2012

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At the TradingPub, whether or not we agree with someone, we appreciate those that put it on the line for all to see. Whether it be in trading, business or life in general, there is a saying that fortune favors the bold. Whether or not you agree with Joshua Brown's take in "Backstage Wall Street", it is definitely an eye opener that has caused quite the stir in investment circles. We do not intend to be a cliff notes version but rather to share a few glimpses from the book.

Special thanks to Richard Newman on providing this review of Joshua Brown's new book:


Backstage Wall Street, by Joshua M. Brown, is not a book that the Wall Street brokerage industry wants you to read. It is a cold and sometimes bitter account of the Wall Street brokerage industry that won’t lead you to new revelations but it will clarify in simple terms why the industry is flawed. The book is described by the author as satire and muckraking; I would describe the story as a broker’s journey to a better and more rewarding life as an adviser, where he and the client sit on the same side of the table with a common goal.

Mr. Brown does an excellent job communicating his point, with clear language, about the culture and goals of the brokerage industry. He points out that the wire houses spend billions of dollars in marketing portraying themselves as trustworthy, when in reality their sole focus is selling you stuff, no matter what the market is doing. He also includes tools to aid you in recognizing the pitches, scams and other “murder holes” one may encounter while managing wealth.

Here are a few of my favorite snippets from the book:

“Neither side is entirely innocent. Investors bring fear, greed, unrealistic expectations, intellectual laziness, and impatience to the table. Investment pros too often counter these faults with those of their own, such as conflicted business models, aggressive sales practices, deceitful marketing, and hidden fees.”

“Wall Street getting creative is almost never a good thing.”

“Sometimes a story is so powerful that even the teller forgets that it began as a way to sell stuff.”

“The constant, never ending search for the next great investment leads us to behavior that actually costs us money.” Carl Richards

For all of the negativity and eye opening examples, the book is concluded with a hopeful quote from Carl Richards:

“My hope is that somehow the traditional financial services industry will figure out that behind the money there are real people, living in the real world, with hopes and dreams and that helping them make smarter decisions about money is truly a sacred trust.”

I found this work to be educational as well as entertaining, and look forward to reading more from Joshua Brown on his blog The Reformed Broker.


We hope that you enjoyed a few of the nuggets that Richard picked out from the book.


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