Overconfidence on Wall Street

“Wall Street is a confidence game, in the strictest sense of that phrase.”

– Malcolm Gladwell, “Cocksure”
The New Yorker, July 27, 2009

One of the best storytellers writing today about financial and economic topics, Malcolm Gladwell, takes a shot at Wall Street’s overconfidence in the current New Yorker. It’s one of the wittier dissections of the financial crisis that I’ve seen.

The specific targets are Bear Stearns and Jimmy Cayne, the failed investment bank’s former CEO. If you’re weary of retrospectives on those two subjects, this piece might serve as one last thing to read about them. Along the way, Gladwell weaves together readable tales of overconfidence in war and other settings.

All this has, well, not very much to do with investor relations – except perhaps as a cautionary tale if your boss or you are among those who might earn a label of “cocksure.” But Gladwell offers up an insightful, if uncomplimentary, look behind the curtain on Wall Street. The New Yorker, of course, supplies the cartoons.

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