Sep

17

 I would suggest from long experience and no contraries at all, when someone offers you a free lunch don't take it. When someone offer you a ride to the pent house, get off at the first floor. Never accept anything that's too good to be true, and that would require the firm or you to break the law or break the bank if they offered it to many other people. And above all, never do anything wrong yourself, as that's the first step to losing everything. When you are in Apache or Aborigine territory beware of an ambush. When you aren't in likely ambush territory, be double beware.

T.K Marks adds: 

The silver pit corollary: Never buy anything offered beneath the bid.

Especially a solid bid.

This took about 1 day's experience to figure out. If's it's 6 bid around the ring and some guy nonetheless starts 'energetically' offering 200 at 4, it doesn't mean he's a numbskull and those contracts are a bargain, it more than likely means he's "strategically" short and has 500 to sell at 2 stop.
 

An anonymous commenter writes in: 

 Such good advice. And nowhere do I find it more relevant than with people who make gifts of their trade recommendations. When portfolio managers have a view they truly believe is great, they are apt to keep it for themselves. No one wants to get other large players in the position only to have them front run one's exit. But if portfolio managers lack genuine conviction, they will try to bolster their confidence by attracting others to their side, sharing their recommendations widely. Often, these recommendations are made in a defensive tone that brooks no dissent, with scant evidence, as in, "Only a fool would be long, with money printing such as this." The purpose is not discussion–or enriching the accounts of others. Rather, it's a desperate search for confirmation–and a worthwhile tell at the market's poker table.

One bear recently provided such a perspective based upon the disastrous policies of central banks and the parlous circumstances of the Middle East. I responded by showing how stocks have behaved when more than 80% of shares within the S&P 500 Index were trading above their 5, 10, 20, 50, 100, and 200-day moving averages. Returns over the subsequent month have been quite bullish, as breadth and momentum have tended to persist. It was as if I had insulted the manager's mother: a huffy response tantamount to "this time is different" delivered in a condescending manner was the reward for my attempt at discussion. That was quite a few S&P points ago. The bear is now generously sharing a variation of his prior offering, in the form of a "bursting bubbles" thesis…more free lunches offering scant nutrition.
 


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6 Comments so far

  1. Greg Muncvick on September 17, 2012 12:13 pm

    Is the Chair making a direct reference to QE?

  2. Andre Wallin on September 17, 2012 8:27 pm

    Gangnam Style dance that Americans are getting into is similar to the Macarena from 1995. A popular dance from a far off place. Wonder if there are any market implications…

  3. steve on September 18, 2012 11:40 am

    two things here

    Big John in “The Hustler” “You mind if I give you some free advice?” Charlie “How much will it cost us?”

    “Just leave Fats don’t need your money.”

    My favorite quote which I believe I invented
    “Those who are the most willing to offer advice are the least qualified.”

    I was a pretty skilled card counter in my day. I would have placed myself in the top 5% of card counters in the country. I read every book from all the famous card counters in blackjack. I could count to three levels and was rated all over the country and Bahamas. Comps are very damgerous offers. I always got RFBE (room,food,beverage,entertainment) and flights. But I was careful. when you are on the company’s expense account you tend to overplay hands and your time at the table. I believe I played better when I played anonymously than when I was rated. And I had more fun.

    sl.

  4. John on September 19, 2012 11:27 pm

    Sound advice. However, I would have to recommend accepting an offer of a free lunch from Victor Niederhoffer. I am willing to bet he picks up the tab from time to time and that he doesn’t bite when he does.

  5. armidal7 on September 20, 2012 1:34 pm

    artie never went out to dinner without picking up the check. and I have followed suit. I like to do some things as well as my father. also, i hate to have to worry about trying someting expensive when some one else is paying. vic

  6. Never Accept a Free Lunch, from Victor Niederhoffer « flied on October 10, 2012 9:14 am

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