Mercenary Trader

fuzzy vs concrete, May 24 2002

Before going out on my own, I worked in an office where the music was always too loud or too soft. The problem was the volume control mechanism embedded in the wall. At setting 1, the music was audible but too low to hear. At setting 2, the music was loud enough to disrupt concentration and made you jam the phone against your ear. I longed for a round knob control that offered a continuum, but had to be satisfied with 1 or 2. This throwaway analogy illustrates Kosko's frustration with "bivalence." We do not live in a black and white world. Many things are in between, and science is silly to pretend otherwise. It is not just the engineers and physicists- economists also suffer greatly from… Read more

an objective defense, May 12 2002

Jim Cramer's love/hate relationship with the public illustrates the problem of fame. It also illustrates why most top traders avoid the limelight like the plague. Being well known as a trader is a losing game.

On the one hand, you have a bunch of know nothings who worship the ground you walk on because they think you are some kind of magician. All this does is puff up your ego and tempts you into developing a superman complex, an extremely dangerous thing for a trader (I'm not aware of any studies, but I'd be willing to bet my last dollar there is a positive correlation between fame and flameout).

On the other side of the coin, you have an equal number of people who mindlessly… Read more

equal parts humor and wisdom, April 8 2002

Much to my surprise, I find myself in agreement with a prize winning economist (Paul Samuelson has dubbed the book a "modern classic," and it is). A brief but insanely great read, Adam Smith made me laugh out loud at least half a dozen times with his dry sarcasm and sardonic wit. If 'Reminiscences of a Stock Operator' is the all time ultimate classic for traders, then 'The Money Game' is the all time ultimate classic for investors.

Written almost a decade before I was born, the book is just as relevant today as it was in the latter half of the sixties. The high flyers Smith writes about are so similar to those of the 1990's bubble, it is literally as if nothing but the symbols have… Read more