Review: Backstage Wall Street

There are a lot of potential pitfalls when a blogger decides to write a book.  As a reader, I always have the nagging suspicion that the book will end up being a rehashing of old posts or some sort of sales pitch.  Luckily, this book doesn’t fall falls into any of those traps.  With the exception of a few graphs and lists the content is wholly original and there’s no sales pitch to be found.  Just real talk from a guy who has worked tirelessly to bring honesty, transparency, and some much needed humor to the investment world.

The book tackles three distinct story arcs.  The first arc is the closest thing you’ll get to an oral history of sell-side Wall Street.  This is not some timeline copied and pasted from Wikipedia but an authentic look at how we got here from the perspective of a former foot soldier.  The second arc is an investor education in how to spot the bad guys, bad products, and bad firms.  If you’re an investor with a shitty broker, or you’re in the process of looking for a financial adviser, these chapters are invaluable.  This section is especially good at teaching people what to look for when the next new new financial product is introduced and how not to get suckered in and subsequently blown up.  The third arc is the personal story of Josh and his crisis of conscience and redemption.  Believe me when I tell you that any one of those three alone would be worth the full price of admission.

My favorite part of the book when Josh lays out the pitch structure of a broker sales call.  This is known as the “straight line pitch,” and according to Josh, it’s the first time anyone has ever published it.  This part of the book will resonate if you’ve ever received a sales call from a broker or remember the line from the film Boiler Room:

There is no such thing as a no-sale call. A sale is made on every call you make. Either you sell the client some stock, or he sells you on a reason he can’t. Either way, a sale is made. The only question is: who’s gonna close? You or him?! Now be relentless. That’s it, I’m done.

The straight line pitch was pioneered by Martin Shafiroff and the brokers at Shearson Lehman in the 1970s.  Over the decades it has been passed down and used by everyone from white shoe firms to boiler room brokers.  In the book, Josh enunciates every persuasive syllable of the various opens, rebuttals, and closes.  It is truly fascinating, both as a study in human psychology and as a true insiders perspective.  As a reader with the curtain pulled back, you can see both why it works, and how absurd the whole charade is.  The only other place you can learn about the straight line pitch is by actually getting a job as a junior broker.

This is a great read.  Definitely an original and hopefully not the last.

Backstage Wall Street: An Insider’s Guide to Knowing Who to Trust, Who to Run From, and How to Maximize Your Investments — (Amazon)

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