Random Thoughts: Life and Death on Wall and Broad
We used to play for silver, now we play for life.
Editor's Note: Todd posts his vibes in real time each day on our Buzz & Banter.
Imagine living in a world where it didn’t matter if you made money so long as other people lost more. Not so bad, right? You could eat, sleep, drive, go to the movies, take vacations, and otherwise be quite happy.
There’s a catch, though. If a time arrives when other people begin to make money, you not only have to make money too—you have to make at least as much as the average moneymaker in order to live.
Sounds like a bad game show, right? It’s called Full Financial Makeover and it’s happening as we speak!
While you may not have heard of it, it’s been around a long time. It was traditionally a niche show available only for the privileged, and besides, nobody really kept score anyway.
Word eventually spread—this thing called the “Internet”—and strange things began to happen when the digital economy took root.
Everyone and their sister played the game. People mortgaged their homes, leverage expanded recklessly , derivatives redistributed risk on a global scale, and complex algorithms arrived with split-second decisions.
The world’s most powerful governments joined together in an attempt to ban the game—but they were too late. They began arguing about who to blame. They took measures to protect themselves. Everyone got testy and social unrest took root.
The game is still played, all right, on every level. Fund managers around the world are watching the clock at this very second, waiting to see where the average comes in.
They know their investors will be watching too; if they underperform or—GASP!—lose money, it’s game-over. Fini. Poof!
Good luck into quarter-end, and remember that you don’t get paid for activity; you get paid for performance, relative as it may be.
Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at firstname.lastname@example.org.
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