Why this order
Five items, every one of them an evening, which is what makes this a weekend rather than a promise. Three films for the institutions and two genuinely short books for the ideas. Take the books on the Sunday: they are where the opinion comes from, and an opinion is the thing the films cannot give you.
The 5 of them, in order
1
It's a Wonderful Life
1946RecommendedFilmStart hereAn evening
Friday. A bank run, and the reason banking is not an ordinary business.
What to notice. A bank run is a maturity mismatch, not a solvency problem.
An eighty-year-old Christmas film contains the cleanest bank run ever put on screen. Maturity mismatch, why a solvent bank can still fail and the reason deposit insurance exists, in about four minutes.
Where it shows up in a roomWhere it shows up in a room
It is the most memorable way to explain why banks are regulated differently from other companies, which is a standard opening question.
2
The Big Short
2015EssentialFilmStart hereAn evening
Saturday. What an instrument is, and how a rating can be wrong at scale.
What to notice. A rating is a model output, and a model rests on a correlation assumption.
The clearest explanation on film of what a CDO and a synthetic CDO actually were. Watch it for the mechanics rather than the swagger, and be ready to say why a correlation assumption was the thing that failed.
Where it shows up in a roomWhere it shows up in a room
Asked what got you interested in markets, the useful answer names the correlation assumption and what you read next, not the film.
3
Margin Call
2011EssentialFilmStart hereAn evening
Saturday. One night inside a firm deciding what to do about it.
What to notice. A risk limit is a decision about who has to be woken up.
One night on a trading floor as a firm decides to sell a book it knows is worthless. The best study anywhere of risk limits, a VaR breach and how bad information travels up a bank.
Where it shows up in a roomWhere it shows up in a room
It gives you a concrete answer to what a risk function is for, which trips up most candidates applying to markets divisions.
4
Where Are the Customers' Yachts?
Fred Schwed Jr.RecommendedBookStart hereAn evening
Sunday, and short. Fees and incentives, unchanged since 1940.
What to notice. Follow the fee before you follow the advice.
A 1940 book about fees and incentives that has not dated in a single respect. Short, funny and quietly the most cynical thing on this list.
Where it shows up in a roomWhere it shows up in a room
Asked why active management is under pressure, the fee answer is the one that does not need a chart.
5
The Dhandho Investor
Mohnish PabraiRecommendedBookStart hereAn evening
Sunday, and shorter. Low risk and high uncertainty are different things, which is your one defensible opinion.
What to notice. Low risk and high uncertainty are not the same thing.
Low risk and high uncertainty are not the same thing, and the gap between them is where returns come from. A short book built entirely on that distinction.
Where it shows up in a roomWhere it shows up in a room
The distinction gives you a precise answer when you are asked what makes a situation attractive rather than merely cheap.