Crew RaceProper preparation: Went to a boat race at St. Andrews recently and saw the senior crew rinsing and washing their boat one hour before game time. They said it adds a small fraction to their time and gives them pride. The importance of getting everything in place and order for your trading day, with every little thing, and every little extra and everything prideful is underlined. John Wooden's first meeting with his players where he teaches them how to wash their hands, and put on their socks, comes to mind.

Playing for keeps: Federer is having the worst start of a season ever, not getting into a final in his last six tournaments. Before he started competing for real, he played a series of exhibition matches with Sampras, and each went three sets into extras. He obviously was fooling around, trying to keep it interesting and this kind of "customer's game" is hard to extinguish — even the memory of it is odious for competition. How many times does a market player put on a reaching trade, for the fun of it, or just take a roll of a dice with a small edge after a series of big wins, and how often does he end up like Federer this year?

Pat EwingHall of Fame: Patrick Ewing was inducted into the Hall of Fame yesterday, and certainly Doc Greenspan would have been a better choice. His grotesque and sullen disposition, his outside game that prevented any rebounds, and the general aura that he created for the team during his last eight years there must have had much carryover effect on why the Knicks are still the world's worst. Sort of like the residue of the bridge player on the take-no-prisoners brokerage house that recently saw a 90% decline in stock price.

Success factors: The Memphis-Kansas game illustrates a myriad of truths about markets. First, the little things that were done wrong made the difference between success and failure. A Memphis player argued with the referee and saw Kansas score an easy basket while he procrastinated. How often does one argue with the floor, or the counterparty and lose much more than he would have by calling it a day? If litigation is involved, know that the legal costs in the typical court case are far greater than your net expectation.

KansasLittle things: The game decided by little things and letting up with Memphis ahead by nine with two minutes to go. It reminds me of days like today where the market was way up as of 1:00 or 2:00 or 3:00 and everything was grand for the bulls, the sun was shining, the water was beautiful (a la Memoirs of a Superfluous Man) and then one minute after the close, the market had dropped 2% from its three month high, a 20 day high, which, incidentally, took the longest to realize of any in the last eight years. One also notes that Chalmers seems to be the best thief in recent memory, and his four steals meant the difference between success and failure. Specialization in one market, one part of the day is often sufficient to give one the victory.

Steve Leslie adds:

I am reminded of the saying "G-d is in the details." This is generally attributed to Gustave Flaubert, who is often quoted as saying, "Le bon D-eu est dans le detail." Others have used this quote, such as Michelangelo and Le Corbusier. Paradoxically it is quoted by the architect Ludwig Mies Van de Rohe as "The Devil is in the details." Interestingly Mies and R. Buckminster Fuller are credited with the saying "Less is More." If one wants to get a healthy dose of attention to detail, watch a pit crew at a Formula One race. It is true poetry in motion. They can fuel a car and change tires in less than eight seconds.

Rodger Bastien comments:

I would agree that the difference in the Memphis-Kansas game was preparedness. The sequence leading up to the three-pointer by Chalmers that sent the game into overtime was badly mishandled by Memphis coach John Calipari and he knew it. You can't afford to overlook anything lest it cost you the game and it was evident that he didn't make it clear to his kids just what to do in that situation (which was clearly to foul to prevent the three-pointer). What's more, an immediate timeout should have been called with two seconds remaining in regulation — again, coach's fault. Reminds me of the poor judgment I too often demonstrate in fast market conditions…

Tim Hesselsweet suggests:

Be aggressive. The passive play of Derrick Rose, who advanced the ball beyond midcourt then promptly passed and ran to stand in the corner, diminished one crucial source of leverage for Memphis. Rose destroyed Texas's 1st-team All-America PG Augustin in the regional final and took advantage of UCLA's guards by penetrating to either score or draw additional defenders and find open teammates for easy baskets.

Alan Millhone notes:

Sean KempSaw on the news a current NBA player has 10 children by eight women and has not paid his support payments to any of them. Not a good example for any young athlete who aspires to greatness in basketball or anything else ! This player might get into the "Hall of Shame."

Nigel Davies assays:

There are two different forms of preparation here; technical preparation and psychological preparation via ritual. Washing the boat is technical whereas John Wooden's hand/sock washing would have been mainly ritual, which is not to underestimate its importance. Rituals provide valuable triggers to enter a particular state of mind.

At the chessboard both are used. For example one might study an opponent's games and/or prepare a particular variation (technical) before going to the board at a prescribed time (e.g. five or 10 minutes before the start), carefully filling out the score sheet, cleaning one's glasses or some such (all mainly ritual).

Good preparation includes proper consideration of both of these. And one of the main strengths of experienced players is that they often have their preparation routine well worked out.

J.P. Highland offers:

JuventusEuropean soccer is played in a way that guarantees the cream always comes on top at the end of the season. The winner is the team that obtains more points after a long 38 game season. The only problem with this system is that it leaves almost no chance for surprises. Real Madrid and Barcelona have won most championships in Spain, so have Juventus and Milan in Italy and Manchester United and Liverpool in England.

American sports are more socialistic, impose salary caps, revenue sharing, give a chance to bad teams to draft before winners and have a playoff system that gives a higher probability of having a winner th product of randomness by inviting underdog teams that are graciously called wild cards that can later become champions like the New York Giants.

Speculation is closer to the European system. You can get lucky some days and reap a good reward but in the long run the lack of sound money management and a strict trading plan will put you out of business.

Clive Burlin recounts:

I took an introductory flying lesson recently. I was shocked at how much checking gets done before you roll down the runway. While the instructor was going around the plane checking the propeller, flaps, gas, tail, etc., I was thinking to myself "you know, if you did half the amount of prep before putting on a trade, maybe your results would be a bit better." This thought was totally reinforced once inside the cockpit where the pilot sat with this long check-list seemingly checking every button and switch there was. A few more checks before take-off and we were barrelling down the runway.

Scott Brooks recalls:

Some years ago, I was listening to an interview of several NBA players and the focus was on Patrick Ewing. One thing all the players agreed on was that Ewing was cheap. He never picked up any tabs. Don't know if it's true or not, but I found it interesting that the biggest personal matter that they all agreed on, and spent a inordinate amount of time talking about, was his "cheapness."





Speak your mind

26 Comments so far

  1. Mark Candon on April 8, 2008 9:57 am

    Memphis had the title in the bag, but was unable to do two pretty simple things: make free throws in the last 90 seconds and take some time off the clock. All they needed to do was pass the ball around the periphery (instead of going in for the jam) until Derrick Rose got possession. This is something you can practice. I don't think it was a choke coaching job. Nothing will ever compare with Houston coach Guy Lewis pulling in the reins on Phi Slamma Jamma in the second half against NC State 25 years ago.

  2. George Parkanyi on April 8, 2008 11:22 pm

    I don't know - I guess I'm forever doomed to being just a "good approximation" kind of guy.

    I'm not sure how you can prepare with such precision for a specific trade. The outcome of a trade is subject to its being part of a non-linear system. SOME of the elements can be forseen in the fundamentals, but there are always other forces at play - especially the human element, that can be impacted by any number of other variables (which we tend to lump together as "genius" if they end up favouring us and "luck" if they don't).

    Even if you get direction right (which is where most of the public's analysis stops) with a pristine economic analysis, to get to your target profit you have to ask and answer a whole bunch more questions such as "How much capital should I deploy? When and how do I take profits? How much drawdown can I withstand? How much time do I want to give it? Is there an opportunity cost for not doing something else? Will my wife leave me if THIS trade doesn't work?"

    Where I think you might be able to apply successful rigour is more in the establishment of a trading plan that is designed to statistically produce a certain rate of return - OK, a system - with comprehensive trading and money management rules. The hard part there is maintaining discipline over a long period of time. (Who doesn't like to tinker? And who by now hasn't had the First Law of Systems beaten into them: "All systems immediately stop working the moment they are deployed". This actually has a sound basis in physics - as the act of just observing a particle changes it, so the act of deploying a system stops it.)

    What was my point? Oh yeah, can you really prepare for non-linearity?


  3. Lon Evans on April 9, 2008 3:15 am

    A word to the room,

    Once, a bit ago, I went head to head with the guru. I did so to test not him (he’s awesome), but those who cling too tightly, like crabs in a bucket that can’t let go.

    And man, did the crabs come at me. I expected little else, and appreciated the vitriol as it confirmed an opinion. It was just like a solid entry, even a perfect entry.

    I was raised in a cult. I know better than most how the mind can be manipulated. I’ve nothing but contempt for those, mature enough to discern, who willingly abrogate their will whether demanded or not.

    Vic has never asked for a following. He did no more than offer a site open for conversation, and good conversation does occur here. But there is a very ugly element in desperate search for a leader. A leader, I doubt, that Vic would offer to be.


  4. Lon Evans on April 9, 2008 3:47 am

    By the way,

    Citi is suddenly selling some billions in debt it “does have to.” And at loss. Does this mean another knee jerk rally?

    Lord, it’s like shooting fish in a barrel.


  5. Lon Evans on April 9, 2008 4:08 am

    One last, last thought,

    Was in N.C. recently, and , while listening to a local NPR broadcast, heard from a math dude that he had devised an algorithm, which could determine the NCAA Champion.

    His model chose Kansas. As acceptance of his dissertation was based upon this evaluation, it wasn’t made wantonly. Interesting isn’t it? Was it luck, or did the guy evade the pitfalls of ‘randomness’ with a particular genius?

    I guess only the future will tell. Either he’ll end up a multi-millionaire, or teaching High School math.

    Life’s funny, isn’t it?


  6. George Parkanyi on April 9, 2008 9:11 am

    I forgot to mention, the Second Law of Systems is "All systems start working again as soon as they are abandoned" and the other question you need to ask before making a trade is "Will my wife leave me if I make too much money on this trade?"


  7. steve leslie on April 9, 2008 10:45 am

    I must make a few comments about Patrick Ewing. He took Georgetown to the NCAA finals 3 out of 4 years winning the title in 1984 against the Houston Cougars. He played 17 years in the NBA 15 of those with the Knicks and took them to the NBA championship game in 1994 losing game 6 and game 7 on last second plays. On the way to the finals, the Knicks had to beat the Bulls and the Indiana Pacers. The battles between the Pacers Bulls and Knicks were legend through the years. He was an 11 time all star scored over 24,000 points in his career and over 11,000 rebounds. He also represented the US in the Olympics winning the Gold medal in 1984 and with the DREAM TEAM in 1992.

    In 2000 Alonzo Mourning needed a kidney and Ewing promised Alonzo that he would donate his to his friend if he needed one.
    Hardly the sign of being cheap.

    I met him in Tampa at Gameworks when he was with the Orlando Magic and he was very gracious signing autographs for children of all ages including me. He recently left coaching to spend more time with his family and cheer for his son Patrick Ewing Jr. who is also at Georgetown.

    At his age of 45, I bet he could beat Greenspan 10-0 in a game of 1 on 1. I am even willing to offer odds. Any takers?

    As for the Knicks woes, all the credit there goes to the management especially Isiah who not only thinks he can coach but who also put together that abysmal collection of overpaid, lazy, worthless players. Donnie Walsh GM of Pacers fame, has inherited that horrid dreck and barring some amazing acquisition of player or players, Knick basketball will be laughable for some years to come. It will take that long to unwind the generous contracts of Stephon Marbury, and get rid of a long list of nobody’s.


  8. Mulholland Drive Street Racer on April 9, 2008 4:57 pm

    Does Legg Mason’s Bill Miller exhibit symptoms of the M&A equivelent of Stockholm Syndrome?

  9. Nigel Davies on April 10, 2008 2:46 am


    Have you considered that your upbringing in a cult may be what’s making you think they are everywhere? Nobody forced you to come here and yet you did, voluntarily, and you’ve been picking a fight constantly. Why not go to one of the many more bearish forums instead? It could be that you’re compelled to go out and fight ‘cults’ wherever you imagine they are. Eeek.

    Let me repeat my advice, despite the fact that it may be better to just ignore you. Give up trading/shorting now, it’s a question of time before the market mistress takes you out again. You’ve got no self-control and no method, all that’s happened is that you’ve found yourself getting lucky.


  10. Lon Evans on April 10, 2008 3:35 am


    TOO much . . .!



  11. steve leslie on April 10, 2008 11:06 am

    I don’t understand how Stockholm Syndrome relates to Bill Miller. What exactly is the point? I would just love to hear the analysis of this one.

    Putting this curious statement aside, Bill Miller of Legg Mason, had a bad year. By many accounts a very bad year. This follow’s 15 exceptional years of outperforming the S&P 500 despite his flagship fund the Legg Mason Value trust gathering vast sums of assets. Perhaps there are better mutual fund managers and value managers out there however as they go he is a pretty good one and a very disciplined manager. I think the lesson here is that nobody can be great every year and markets are cruel and impartial.

    Tiger Woods won the Masters in 1997 by 12 strokes and in the process set records that nobody had foreseen. He completely destroyed the field. He then did something very unusual. He decided to change his swing under the guidance of Butch Harmon. He felt that he would need to do this to become a greater golfer. He struggled with his swing for 18 months but he quietly went about and took care of business. Then he won the Memorial tournament and followed with the U.S. Open in Pebble Beach winning by 10 strokes. This is in a tournament which ordinarily is decided by 1 or 2 strokes. Lessons here? too many to mention.

    When Celine Dion was just starting out in the music industry, her husband Rene Angellil mortgaged his home to finance her first recordings. Now she is one of the mostsought after, successful and highest paid entertaines in history.

    Allen Iverson was so poor as a child that his mother in Hampton Va had to turn the electric off in the winter so she could feed her children.

    Every great person in sports, business or in life goes through difficult seasons. The difference that makes them great is that they refuse to stay down they choose to rise up.

    You see it is very easy to kick someone when they are down. It is easy to find fault in others to throw stones and take delight in others failures. It is an easy trap to find and to fall into. It is called Schadenfruede. But remember the last chapter is never written in advance.


  12. Mulholland Drive Street Racer on April 10, 2008 1:23 pm

    Obviously I am referring to his recent response to Steve Ballmer's release Friday on MSFT's negotiating posture with respect to YHOO. After reading Miller's response, it sort of struck me as similar to behavior and reactions, I read, of hostages. Isn't Legg Mason and their investors sort of hostages in this deal?

  13. Merovingian on April 10, 2008 10:02 pm

    Nigel, Re Lon's comments: There have been some strong statements made on this site in the past by Vic and Laurel about a famous investor and some of his investing strategies. Some of those statements could now be characterized as wrong and yet neither they nor any of the regular contributors here have sought to revisit the subjects. I have learned a great deal from Daily Spec over the years but the absence of followup on these issues suggests they are more accurately described as articles of faith rather than avenues of inquiry. M

  14. Lon Evans on April 11, 2008 2:50 am

    Nigel, No one listens to your advice. Let it go. lon

  15. Nigel Davies on April 11, 2008 10:17 am


    Well, yes, it does seem like certain things were said which are now no doubt regretted. But given the situation I find the Lon's triumphalism and schadenfreude distasteful.

    It's not quite clear to me why many of Lon's comments have been published though I have two theories. Either the site editors are punishing themselves for their earlier enthusiasm or someone's making a very nice living fading his orgasms.


  16. steve leslie on April 11, 2008 11:34 am

    In defense of Dailyspec: I have been a visitor to this site for years and a contributor nearly as long. As I see it, this is a place for ideas to foster and germinate. Where else will someone postulate Lobagola, or surfing, music, chess, poker, barbeque and their correlation to the markets? Strategies and studies are constantly being presented by Vic and Laurel, Castaldo, McDonnell, Sogi, Zussman, Ellison, Fulco, Williams, Bollinger, Zachar, Haave, Kass et. al. It is an open forum. Contributors understand that it is to be perceived as one of conviviality as one would view a cocktail party or evening supper. A level of decorum should preside. It is up to the reader to discern that which is relevant and that which is not. Differences of opinion do abound. Debate at times is vigorous. Gross distortion of facts are ferreted out. All commentary regardless of the contributor is open to review. The chaff gets separated from the wheat. Piling on is discouraged. The Oracle of Omaha, the palindrome, the chronic uber Bear at Barrons are all discussed pro and con. Contrary to recent statements there is no particular Pied Piper leading the rats into the water to drown. Sightings of lemmings are overstated. It is what is it. It is not perfect nor intimates such. submitted, sl.

  17. Jeff Watson on April 11, 2008 8:21 pm

    Steve,Great spot on analysis of Daily Speculations. Something going on here with all the personal attacks and anti-social behavior reminds me of the great quote, "The winners sit back and tell stories, and the losers say "Shut up and deal."Jeff

  18. steve leslie on April 12, 2008 8:04 am

    Speaking of poker, and I love to: True story, I was in a game once where a guy, after losing a hand, tore up the deck, tossed it around the room like confetti, knocked over his chair, grabbed the hat I was wearing and threw it across the room. Funny thing was, I wasn't even in the hand. Do you know the difference between dogs and men playing poker? After a while the dogs stop whining. rim shot. sl.

  19. Lon Evans on April 12, 2008 10:09 pm

    Steve, The cult reference was made out of sympathy. Nigel had run short of material, and was beginning to repeat himself. I felt for the guy, truly, so I gave him a little more ammo. And Steve, 'Stockholm Syndrome' refers to the victim coming to relate with and support the victimizer. Obviously, I've exhibited no such sympathy. I'm puzzled by your question, but not surprised. lon

  20. Jeff Watson on April 13, 2008 7:41 pm


    I never lose my temper in a poker game, but had a real close call about a year ago. I was playing limit Hold’em(a game I don’t really like) and was dealt (2c,3c) in the BB. There were no pre flop raises, and the flop came(6c,4c,5c). I had a nut straight flush and decided to slow play to get as much money shoveled into the pot as possible. An aggressive player raised, a couple of guys dropped out, and I slow called. By the turn(3d) both players raised, and I reraised, both calling. The river was a (6h), and I had made one guy for a high flush, and one for a possible flush, trips or maybe a full boat. The betting went to the max, and when the showdown came, I lost my straight flush to the guy with (7c,8c) a higher straight flush. Flummoxed, I took a deep breath, congratulated him on a nice hand, got up and left. Sometimes, even a straight flush gets beaten. I’ve had a few straight flushes in the market get taken out by higher straight flushes, but haven’t we all.

    What kind of hat were you wearing….a fedora, perhaps?


  21. steve leslie on April 13, 2008 11:29 pm

    Let me say that this post is one of the most lively and spirited ones we have had for some time. A real treat. Sadly not a fedora but a mere baseball hat. A raw place to be with the low end to a straight flush and someone with a high end. I am sure it felt like a hot poker just went through your stomach. You sure you weren't cheated? Were the Maverick brothers in the hand? I don't know how you would even calculate the odds of that happening but I will tell you if the game is fair that will probably never happen to you again in your lifetime. Len Dykstra played high stakes poker and he related in a recent Sports Illustrated issue on the last page, how he once lost six figures in a poker game one night to a bunch of slow talkin' southern boys. Now I am told he is is one very good stock picker. His picks can be viewed on street.com In Lake Wales Fl. they used to have one of the highest stakes private games in the State and maybe the country. Dewey Tomko played in it. I know of guys who played in the game. One night masked gunmen broke in and robbed the room. They thought it was an inside job since the door was not locked. No police report filed no money recovered. Coincidence? This is a partial list of my favorite movies that have poker as a theme. Not in order: A Big Hand for the Little lady Rounders The Sting Maverick Havana My favorite The Cincinnati Kid. Steve McQueen is the King of cool. Others? sjl

  22. Jeff Watson on April 14, 2008 6:54 pm


    I’m reasonably sure that I wasn’t cheated at that game(having spent most of my misspent youth in illegal card rooms where cheating was rampant)….but you never know. When I play poker, I try to play in games where I’m the best player, and I was the best player at that game. I still play with those guys, and have never seen another hand like that. I try to lose with grace and congratulate my opponents on their good play. If only I could get some of my friends to play something other than hold-em, like lowball or 7 card stud.

    All of those movies that you mention happen to be on my favorites list. There’s another movie done by Robert Altman called “California Split,” that’s one of my favorites. Altman did a great job paring Elliot Gould and George Segal as a couple of degenerate gamblers, and capturing the essence of a couple of losers trying to make a big score.

    Whenever I hear a degenerate gambler mention that he needs to go to Gamblers Anonymous, I always ask, “How come you never see the winners at GA?”


  23. Merovingian on April 14, 2008 8:31 pm

    An interesting angle from time magazine - apparently the higher a trader’s morning testosterone level the more likely he will be profitable…


  24. steve leslie on April 15, 2008 8:04 pm

    I just watched a pretty terrific show on ESPN called E 60. It is shown At 7PM on Tuesdays. It is not your typical show in that they interviewed Steve Williams, Tiger Woods's caddie. They also looked into the dark side of gymnastics, Darren McFadden, and a man with prosthetic legs that allows him to run track. Check it out. sl.

  25. James Miles on April 16, 2008 2:04 pm

    I have spent the afternoon at the Oval cricket ground in London today (16 April), watching the first domestic game of the season between Surrey (the hosts) and Lancashire. It was a little cold and there were only a few hundred spectators in (the ground can seat around twenty thousand).

    Mark Ramprakash, a Surrey batsman who combines one of the highest levels of natural talent seen within this beautiful game in the last two decades with one of the highest levels of application over the same period had reached 31 runs from 91 balls when I arrived. Slow going, but he had played himself in. He reached his half century from 105 and his century from 164, closing the day on 102. His last seventy-one runs came from 74 balls. He remained compact, disciplined, putting away bad balls rather than playing anything expansive or forcing the pace. Ominously for Lancashire, he is playing well within himself, taking each ball on its merits, but seeing more each time it comes. His breadth of stroke is increasing, but you have the feeling he couldn’t give two hoots about slowing down if the bowling becomes tighter. I am buying runs next to his name tomorrow.

    The application to markets is obvious, so I won’t need to fill people unfamiliar with cricket in on what the above all means.

  26. acetrader on April 18, 2008 3:39 pm

    There is another obscure movie called “The Music of Chance” (I think) that starred James Spader as one of two guys who lose everything in a poker game and have to work it off by building a wall for two old southern gentlemen….think I will Google it right now.


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