Categories
Quotes

How hedge funds get their edge

When a former trader from Galleon Group was asked what the word “edge” meant to him, he laughed and said that from the day he started at Galleon to the day he left, it was probably the most commonly used term around the office. It was such a priority, the trader added, that if you didn’t have it, you’d be quickly left behind. It meant that you knew something that others didn’t. Another trader—a witness in the government’s insider-trading investigation—was asked if he knew of any hedge fund that didn’t traffic in illegal information, according to the person familiar with the inquiry: No, the source answered, they would never survive. In this way, trading on nonpublic material information is similar to doping in professional cycling: Once someone like Lance Armstrong starts doing it, everyone else has to as well.

– from BusinessWeek

Categories
Economy

The job market in America is brutal

“Someone recently forwarded to me an ad that was posted on the electronic bulletin board for parents at a prestigious private school in Manhattan. Here it is, with names and some other details omitted:

 

My sister recommended a close friend and former classmate at Harvard who is looking for babysitting jobs in the NYC area. He studied psychology and graduated in 2011, and is currently working part-time as an intern in Midtown. He is a caring, gentle guy and is absolutely great with children.

 

If he didn’t get a scholarship the poor fellow must have spent $190,000 on that Harvard degree.”

 

-from Forbes

Categories
TEDTalks Video

Looks aren’t everything

Categories
Links

Weekend Mega Linkfest:Jan 19, 2013

Some interesting off beat reads for the weekend:

Left with no choice (Open)

Tuq Tuq Gaadi (Newslaundry)

What fixed income investors should look for (ForbesIndia)

Wealth Creators 2003-12 (Moneylife)

Shia anger against Gen Kayani (IDR)

There is more to life than being happy (Atlantic)

The accidental activist (VanityFair)

Harvard grads are seeking baby sitting jobs (Forbes)

A secret history of women and tattoo (NewYorker)

Revenge of the Kurds (ForeignAffairs)

Can your genes predict when you will die? (Smithsonian)

The euro zone crisis:Time to celebrate ? (Economist)

On the trail of SAC Capital’s Steven Cohen (BusinessWeek)

Notes from a discussion about cinema (JaiArjun)

Internet hoax: The long fake life of J S Dirr (Gawker)

Which way did the Taliban go? (NYTimes)

The “Sir, you have a puncture ” Scam (TeamBHP)

Travelogue: London 2012 (Ghumakkar)

Spoof: How Hina Rabbani handled Pakistan’s crises (UnrealTimes)

Two poems (Caravan)

Categories
Anecdotes BookExcerpt Observations

Geoge Soros on the difference between broking and market making

Recently, I had an opportunity to deal with Over The Counter (OTC) securities.Since they are not listed, prices are quoted in a large band with riders such as minimum ticket size etc.More often than not, prices are unreliable and vanish when you actually place the order.

In such a scenario, the role of the broker/intermediary becomes critical.But how much should he paid?I find this anecdote from George Soros’s life instructive:

My friend’s father asked me to change some dollars and being conscientious I went to the pain of visiting both of the two markets for this sort of thing,the old Stock Exchange and an orthodox synagogue in another part of town.It turned out that there was a significant difference in the exchange rate, and I was able to get some 20 percent more at the synagogue than at the the Stock Market, which was the only rate that my friend’s father knew about.So I brought him the larger amount and said that I deserved a higher cut, but he refused.

“He said,’You are a broker and it’s your job to get the best rate, that is what you are getting paid for.’ I remembered that years later when I became a market maker in over-the-counter securities.,” George Soros observed.”Because if you are a market maker and can make someone an extra 20 percent and raise your own cut by half a percent that’s different and better than being just a broker.So in the end by his refusal to raise my compensation he encouraged me to be a market maker rather than a broker, which turned out to be quite useful and I suppose I was paid for that experience.”

-from the book Soros by Michael Kaufman