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

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

Fun-filled, entertainment, but entirely purposeful and educational, the book, “The Wisdom of Finance: Discovering Humanity in the World of Risk and Return,” is a book that delves into writer and analyst, Josef de la Vega’s view on finance. He postulates that finance is a field that is both a boon and a bane. It is a boon in that it can be a venue for prosperity and a bane in that it can be a breeding ground for deceit. 

The latter is what is usually highlighted and seen by those who are well-versed with the game. What the book, “The Wisdom of Finance: Discovering Humanity in the World of Risk and Return,” is lobbying for the former: that finance can be good and principled. The focuses on financial basics such as pricing of assets, risk management, how mergers are done, why debt is incurred, and the horrors of bankruptcy are discussed with utter eruditeness. 

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

About the Author

Mihir A. Desai is a Finance Professor who teaches at Harvard Business School and Professor of Law at Harvard Law School. His tenure in the education sector saw a lot of awards and recognition. His studies concentrated on tax policy, international finance, and corporate finance. 

Professor Desai’s studies came into fruition with his lobby for a relevant tax policy design that should be adopted for the international market. 

Table of Contents

The eight chapters of Professor Desai’s magnum opus contain many subtopics that anchor the entire chapter into an organic whole. Below is the entire Table of Contents: 

Chapter 1: The Wheel of Fortune

  1. The Flitcraft Parable
  2. The Quincunx
  3. From Bottomry to Tontines
  4. We Are All Insurance Companies
  5. Wallace Stevens and Ideas of Order

Chapter 2: Risky Business

  1. Lizzy Bennet as Risk Manager
  2. If Isaac Newton Had Worked at Goldman Sachs
  3. I Would Prefer Not To
  4. Stephen Curry, Stringer Bell, and the Only Free Lunch in Finance
  5. The Negative Betas of Your Life

Chapter 3: On Value

  1. The Parable of the Talents
  2. The Cruel Logic of Value Creation
  3. Is Education Worth It?
  4. Your Terminal Values
  5. The Talents of Samuel Johnson and John Milton
  6. Alpha-Beta Soup
  7. Have You Financed? 

Chapter 4: Becoming a Producer

  1. Bialystock and Bloom on Corporate Governance
  2. Apple and Tootsie Roll
  3. A Daisy Chain of Principals and Agents
  4. Vyse vs. Emerson
  5. Mel Brooks on Freud
  6. A Blank Sheet of Paper

Chapter 5: No Romance Without Finance

  1. Working Girl
  2. The Dowry Fund of Renaissance Italy
  3. The M&A Pages
  4. A May-December Romance
  5. Mergers and Marriages Gone Wrong
  6. General Motors and Fisher Body
  7. Romance Without Finance

Chapter 6: Living the Dream

  1. Adam Smith vs. Jeremy Bentham on Leverage
  2. The Hooks of Gratitude and Obligation
  3. Jeff Koons vs. George Orwell on Leverage
  4. Mr. Stevens and Debt Overhang
  5. The Power of Commitments
  6. Popeye in Las Vegas

Chapter 7: Failing Forward

  1. The Man Who Could Have Been on the $10 Bill
  2. The Bankruptcy Act of 1800
  3. An Automatic Stay
  4. A Strategic Bankruptcy at American Airlines
  5. Agamemnon, Arjuna, Hecuba, and Bankruptcy

Chapter 8: Why Everyone Hates Finance

  1. The Temptation of Pakhom
  2. The Lobster and the Squid
  3. More and More Is Less and Less
  4. The Asshole Theory of Finance
  5. Alexandra Bergson as Finance Hero