Daily Speculations
The Web Site of Victor Niederhoffer and Laurel Kenner
Dedicated to the scientific method, free markets,ballyhoo deflation, value creation and laughter.
A forum for us to use our meager abilities to make the world of specinvestments a better place.

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Kim Zussman

03/26/05
Milking a Bull

One of my favorite passages in "How to Become a Professional Con Artist" is the depiction of the big businessman as the ideal mark. "They're cows waiting to be milked," Marlock writes. "They are in abundance, they don't complain when being milked, they provide useful products, and they are used and abused by almost everyone. They are abused daily by employees, lawyers, stockholders, customers, suppliers, lenders, accountants, partners, tax collectors, and competitors."

As one of the cows waiting to be milked by Mr. Marlock, I like to take a Kris-like view of the true predator-prey relationship here. The aforementioned employees, lawyers, stockholders, et al.,. thicken the skin of the seasoned business owner. We have been sued for no good reason. We have been audited. We have seen employees scam the system. We have been overpromised and underdelivered a thousand times. And yet we not only survive, but thrive. Rate increases, fee increases, skyrocketing health-care costs - it doesn't matter.

As for the con man, we know what to do with such people.

When the con comes calling, you can rest assured we are ready, for we have seen his ilk before. You may be able to fool us once, but no matter what, we'll be back and it won't happen again. Therein lies the key, for there is no repeat business for the con. In fact, I would say that the con is a fool because he goes for the one time score rather than a recurring income. And sooner or later, the con will become the hunted as he will con the wrong person. If you think hit men are scary, try lawyers on the prowl.

As for me, I take a Rearden-style view to the situation. Rates can go through the roof, the economy can go to hell, disaster can strike on all fronts and I'll be here tomorrow - open for business and trading the markets.

Be careful not to milk a bull.