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Cohan, Money and Power

Goldman Sachs is not exactly the number one brand in the world. Admittedly, it’s hard to beat Apple these days in popularity contests. But Goldman doesn’t even come close: on the contrary, it’s a firm that people love to hate. William D. Cohan’s Money and Power: How Goldman Sachs Came to Rule the World (Doubleday, 2011) provides fodder for the Goldman haters, exposing among other things a long history of conflicts of interest.

Cohan’s long book is not, however, the stuff that tabloids (or Rolling Stone—think of Matt Taibbi’s piece, later expanded into
Griftopia) are made of. It’s carefully researched, with well-crafted portraits of Goldman’s leading players, definitely worth reading.

Since Cohan’s book has been extensively reviewed, for this post I decided to extract some lessons for individual traders from Goldman’s successes and failures. And Goldman, lest we forget, had a lot of failures.

One lesson is to exploit the weaknesses (or laziness) of others. For instance, a Goldman trader recalled that his boss always called Friday “Goldman Sachs Day,” the rationale being that traders at other firms were goofing off on Friday. If the Goldman traders came in on Friday intent on actually doing something while others had their guard down and were less competitive, their focused energy could make a big difference. (more…)

Happiness and Trader

“Happiness is not to be achieved at the command of emotional whims. Happiness is not the satisfaction of whatever irrational wishes you might blindly attempt to indulge. Happiness is a state of non-contradictory joy—a joy without penalty or guilt, a joy that does not clash with any of your values and does not work for your own destruction, not the joy of escaping from your mind, but of using your mind’s fullest power, not the joy of faking reality, but of achieving values that are real, not the joy of a drunkard, but of a producer. Happiness is possible only to a rational man, the man who desires nothing but rational goals, seeks nothing but rational values and finds his joy in nothing but rational actions. Just as I support my life, neither by robbery nor alms, but by my own effort, so I do not seek to derive my happiness from the injury of the favor of others, but earn it by my own achievement. Just as I do not consider the pleasure of others as the goal of my life, so I do not consider my pleasure as the goal of the lives of others. Just as there are no contradictions in my values and no conflicts among my desires—so there are no victims and no conflicts of interest among rational men, men who do not desire the unearned and do not view one another with a cannibal’s lust, men who neither make sacrifices nor accept them. The symbol of all relationships among such men, the moral symbol of respect for human beings, is the trader. We, who live by values, not by loot are traders, both in manner and spirit. A trader is a man who earns what he gets and does not give or take the undeserved. A trader does not ask to be paid for his failures, nor does he ask to be loved for his flaws. A trader does not squander his body as fodder, or his soul as alms. Just as he does not give his work except in trade for material values, so he does not give the values of his spirit—his love, his friendship, his esteem—except in payment and in trade for human virtue, in payment for his own selfish pleasure, which he receives from men he can respect. The mystic parasites who have, throughout the ages, reviled the trader and held him in contempt, while honoring the beggars and the looters, have known the secret motive of the sneers: a trader is the entity they dread—a man of justice.”

The Inanity Of Asking Questions On Blue Channels

Last week I was watching a investor query an analyst on a television show , the analyst in his most humble opinion on a particular stock said “Fundamentally it is good , technically it is not looking so good ” . What should I do asked the investor ? , the analyst replied ” I think you should hold on ” . the investor prompted “can I buy more , should I sell some ” . up came the analyst in his humble opinion ” buy on a fall , and sell on a rise ” and in wisdom he added “it is a volatile stock anything can happen “.. I failed to understand what the investor achieved of this conversation . the conversation had incorporated everything viz. . buy ,sell , hold and the standard disclaimer , “anything can happen ” . Investors are bombarded with packets of irreconcilable data which cause their little hard drives to collapse under pressure and confusion . Partly to blame for this are investors themselves , who ,in the quest for more information buy themselves a box of contradictions . !
What an investor needs is a modicum of authenticated information and to be phlegmatic .. however most investors these days are contrarian’s and hence , they follow up with every pink paper , and investment magazine , add to it the daily dose of ‘analysis’ on television … Those Score’s of analyst reciting their pedantic verses and the numerous phone calls by altruists souls that ring in to tell you ‘what’s hot on the street’ .! What do we have at the end of all this ? Ans.: An agglomeration of profligate et irreconcilable information and a confused individual — who can barely find his way in the heap of ‘ information ‘.
Serpents In the financial Eden :
All the information an investor has access to is at most sciolism , what lies beneath is above the reach of the common man on dalal street .Distortion and dilution are the two most plaintive facets of information today . Mostly intentional , distortion and dilution is carried out by interested quarters and the fodder is fed to the people , the public domain as we are all aware has the ability to Xerox information at the speed of light , and before you know it a distorted Piece of information has taken the shape of a ‘hot news’ on the street. (more…)
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