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How John Succo Works


First of all, thank you all for your supportive emails concerning my comments on Wall Street (there were lots so I could not answer them). They show the spirit of Minyanville. For those of you expressing concern that I might waiver in my commitment to what I consider to be a great endeavor, please don't worry.

Secondly, the way Minyanville works is going to inevitably cause some problems with some given the nature of how truth is "known". It is unfortunately a messy process (for a variety of reasons ranging from human nature to economic systems) with those in the know and benefiting trying to hide it and most others fearful of really knowing it. Those that truly seek it do so knowing they may not like it, but to their credit, persevere.

Finally the way John Succo works is not very cut and dry. I readily admit I have had my problems with authority, but I believe they were born not out of envy, but out of a resistance to what I believe is necessary to conform.

You see when I was young I was like everyone else in this business. I nearly became corrupted by Wall-Street (or maybe more accurately I once was but have tried to redeem myself). The corruption began with allure, which turned into trying to please the people I worked for and looked up to, which finally turned into being trapped by money and the need to keep making it. I was lost.

But I changed. There was no epiphany, but more of a long, winding, and gradual "growing" into a philosophy of what I now believe to be important. I won't go into it, but suffice it to say that the truth is very important to this philosophy. At one time I felt guilty about the way I was (I was no monster, but certainly no saint), but no longer. I also have learned that we are what we are today in part for the mistakes that we have made in the past.

Wall Street is a regulated monopoly. Broker-dealers are basically guaranteed spreads through government regulation: a broker dealer is typically levered 20 to 40 times and can borrow at a rate only slightly higher than Fed Funds and then lend that money out at higher rates. By far the most profitable area in a broker-dealer is stock lending. No other kind of entity can do this. A broker-dealer then takes these guaranteed profits and "risks" it in other endeavors. If they succeed, shareholders benefit. If they fail miserably, the government (taxpayers) pick up the pieces. I cringed when they repealed the Glass-Steagall.

The buy-side of Wall Street, mutual funds, hedge funds, pension funds, etc., in general add little value. The average mutual fund has underperformed the stock market over the last 30 years. There was no pension fund (under-funded is the politically correct term) problem until Wall Street began advising them and put them into too many stocks. This problem is getting worse not better: many pensions are still using a much too high assumption on return on assets and are now using leverage to try to make up the short-fall (through hedge funds and other methods). Isn't it ironic that Jimmy Hoffa never ran an under-funded pension fund?

Minyanville is about sharing our knowledge of this Wall Street culture and the system under which it operates.

And that is why I write for Minyanville.
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No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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