As I read a book, I mark any interesting quotes and copy them out - it’s a laborious process, but at least helps me remember some of what I have read.
I’m only twenty five pages into The Black Swan Taleb but if I carry on at this rate, I’m soon going to need another book-mark.
The film ‘21′ is based on the book ‘Bringing Down the House: How Six Students Took Vegas for Millions’ (by Ben Mezrich), which I found to be reasonably interesting and faced paced. I regret watching the film, however, as it didn’t add anything other than a few Hollywood plot twists.
Here are some quotes from the book:
“Overall, the team was still way up on the month. But it was a painful lesson to learn all at once. No matter the count, the cards could go bad. Over time, winning was inevitable, a matter of pure math. But in the short run, the game could go either way. Even math left room for luck.”
“Let’s assume you have a roughly 2% edge over the casino. …you need to have enough money to withstand any variant swings against you. A rule of thumb is that you should have at least a hundred basic units. Assuming you start with ten thousand dollars, you could comfortably play a hundred dollar unit.”
“He remembered what Micky had said when they kicked him off the team: The most important decision a card counter ever has to make is the decision to walk away.”
“Blackjack is the only game in the casino that is beatable over an extended period of time, because blackjack is subject to continuous probability. This simply means that what you see affects what you are going to see. Blackjack is a game with a memory. If an ace comes out in the first round of blackjack shoe, that means there is one less ace left in the rest of the deck…in other words, the past has an affect on the future.”
I’ve discovered this great little time-passer. Simple, brilliant, and a bit too addictive. Enjoy.
Many years ago, I burned up an FX trading account with Oanda. I left a mere £70 in the account as a reminder of my shame.
Well, I’ve recently been playing around with this account, and have doubled the equity. That’s a one hundred per cent increase in a matter of months … damn, I’m good*. There’s no magic involved here: I’m short gold and generally trade from the long USD side because that’s my predisposition, hinder me that it may! Anyway what’s the point here? Oh yes, I recently added a small long USD/CHF to the book because this trade always pays out a little in interest. Alas, to my surprise it was carry negative. This is shocking because for as many years as I have been in the FX mkts, USD/CHF has always paid out on the long side. I guess times change.
The word ‘idiot’ is derived from the Greek ‘idiōtēs’, meaning a ‘person lacking professional skill’. I qualify as a first class idiot for not paying any attention to US and Swiss policy rates crossing over.
* Sarcastic self-congratulation.
Made it back from ‘nam and have decided to pretty much put a halt on trading as a serious full time occupation. As expected, holiday expenses took my account below the designated point-of-ruin (£10k), but my oh my, what a holiday. I can’t recommend Vietnam highly enough.
I’m still reading the regular trading blogs (Trader Gav, Financial Philosopher, etc), and have much material stuff to post here (mainly from my notebook), but I’m no longer interested in the famous pink pages (Financial Times), I only read the non-economics stuff out of the Economist, and the business news on the box is a non-starter.
I’m not ruling out a return to this business in the future, but for now I am happy just enjoying the nice weather with a good book in one hand, and a cup of tea in the other!
Good luck to all.
I’m off to the Far East (HK, Vietnam, Cambodia) for few weeks, so no more blogging until early April. It is sad, I know. For my final post, I will share a teaching from ‘We Were Soldiers’, a Mel Gibson Vietnam war movie.
Before Lt.Colonel Hal Moore (Gibson) leads his troops off to war, he is shown making notes on the earlier mistakes of the French. I paused the DVD at this point and scribbled them down.
FRENCH IN INDOCHINA
- Did not know the terrain
- Poor intelligence
- Underestimated the enemy
- Overconfident
- Did not fight on home ground
= MASSACRE
I saw this poster for Vantage Point and immediately thought of trading the markets, of how there are so many traders with so many points of view. There is also the question of the the truth: is it the price, or is it where the price ’should’ be? Does the truth even exist? One thing is for sure and that is, like the characters in this film, no individual has the complete picture.
A million traders, a million points of view, no truth.
… reads the headline of a Financial Times article, on the day that gold prices plummeted some $20.
Reading beyond the headline reveals a more balanced picture from the quoted precious metals analyst, who says:
This is not a table-banging recommendation to buy gold; although the balance of arguments favours a move to the upside, any deterioration in sentiment could trigger profit taking.
I don’t read the financial press much these days, and this article reminded me why. Almost every piece boils down to ‘we with think it will go up … but it may down’, or ‘we think it could go down … but it may go up.’ It is all very tiresome and repetitive. I appreciate this is essentially what market research is all about, but I have a question:
If any piece of research is worth its salt, why publish it to the public? My answer is that it’s mostly worthless, which leads to the catch-22 is that any research that is published isn’t worth reading.
Morgan Stanley issues a ‘Petrodollar Tsunami Warning’
Bottom line: High oil prices will obviously increase the flow of petrodollars. But exactly how big are these flows? We calculate that the stock of the world’s proven oil reserves is now worth some US$121 trillion – higher than the combined market capitalisation of global equities and bonds, with annual flows (oil export receipts) of US$2.0 trillion. While up to 10% of these receipts may be spent on infrastructure and other investments, the rest will be invested in the global financial markets. A tsunami is coming.
- Morgan Stanley Economics, 21 Feb
Merrill Lynch assesses data that moves the markets
ML calculates the average close-to-close percentage change in USD/JPY and EUR/USD on days of important US data releases. Findings are presented in the table below. I don’t place much store in this but others may find it more useful.
Most of the most volatile days in USD-JPY and many in EUR-USD have been associated with financial concerns and risk sentiment rather than data in 2007.
This suggests that it is particularly important to gauge the market’s attitude to risk on a daily basis in order to be able to trade both the data and the additional information relating to the financial crisis.
With regard to the data, the release of US non-farm payroll data remains the most volatile trading day, while the real economic indicators have gained in importance. As long as the market remains uncertain about the global outlook, real data in both the US and the Euro area should remain very important.
- Merrill Lynch, 25 Feb
Just happened across this request from a lady asking how she can bag a millionaire husband. An investment banker kindly responds and puts her in her place.
