The world runs on information.
And so much of that information is at your fingertips. In newspapers, online…you too can be an expert and compete with world-beaters, assuming you’ve got the interest, the desire and the smarts.
Stevie Cohen is very smart.
I wanted to read a book. So I began my research. Of recently released items, highly-rated items, that’s the world we live in, of course personal recommendations are important, but whenever I get a sincere one I immediately go online and check it out, and if the tome doesn’t get four stars, I’m out, my time is just too precious, too valuable, and there’s nothing worse than a second-rate experience, a boring one in a world that is so exciting and is moving so quickly.
You too can become an expert on hedge funds if you read “Black Edge.”
But you won’t know what went through Steve Cohen’s mind, because he was never interviewed by Sheelah Kolhatkar, and he was never personally convicted. That’s what Andrew Ross Sorkin said, that “Black Edge” is for amateurs, and he almost dissuaded me from reading it, but the other reviews were so positive and I am an amateur, so I dove in.
And I could not stop reading. “Black Edge” is UNPUTDOWNABLE!
Now the author separates the financial world into two groups. The rich and privileged, groomed for this life, and those educated and smart with a chip on their shoulder who have something to prove. You can separate today’s society into two groups also… Those who want to know the truth and those who do not care. In the latter category you’ve got the followers of celebrity, those who adore Kim Kardashian and the two-dimensional pop stars. But you’ve also got the team players, the ones who e-mail me the Twin Towers were blown-up, who believe Hillary is the devil and everything on Fox News is true. I hate to tell them, everybody’s on the same team. Hill and Bill went to Donald and Melania’s wedding. Everybody went to Harvard. Or Wharton. It’s a club. And you’re either a member or you’re not. Either you know how the game is played or you don’t. And if you want to know how the financial game is played, the game that runs America today, and has for decades…
Read “Black Edge.”
This is not news. If you read the financial page, “Bloomberg,” you know all the highlights. But it’s the nuances that are scintillating.
Yes, Steve Cohen’s SAC Capital paid a huge fine, more than half a billion, and Cohen can only trade for himself until 2018, but then…
And hedge funds have recently had lousy returns. But if you think Lloyd Blankfein is the enemy, you’ve got no idea his salary is a pittance compared to the men in t-shirts and flip-flops at hedge funds.
Now it’s a moving target. If you’ve been reading recently you’re noting the ascension of the quants. But that’s how you survive in this world to begin with, by adapting.
Steve Cohen did not grow up as disadvantaged as the author portrays, and he had an interest in Wall Street (and poker, oftentimes the same thing!) from his high school days. Proving you’ve got to follow your interests, you can’t be someone you’re not, although many people in this book are, because of the MONEY!
That’s right, you go work at the hedge fund for a couple of years and if all goes right you never have to work again! And chances are you can’t, not at this level of remuneration, people wash out faster than they do from MLB. You’re hot and then you’re not, and then you’re done and no one will hire you.
But, if you want to make money, you go where it is.
So Cohen is a natural trader. In a pre-computer world for a third-rate financial firm.
And then he goes solo. Note that, all the greats cannot be contained, they write their own rules, they take risks, huge risks, and do what they wanna do whenever they wanna do it.
When he first goes to work at Gruntal, it’s about beating the spread. Noticing price differences. But then computers eliminate this option and…
Cohen becomes a glorified day trader and he buys so much from Goldman Sachs that he insists they give him information first. Yup, you call this leverage. Information comes first, leverage comes second, usually with a bit of cash sprinkled in.
But everybody gets the memo and it’s harder to compete so what does SAC Capital focus on?
It’s no different from working radio promotion. Your boss says he needs adds, he doesn’t care how you get ’em, you’ve just got to deliver ’em or you get canned. So you bend the rules, after all, you’ve got a family to feed.
And the truth is…THEY’RE ALL CROOKS! All those people buying triple-digit million paintings, sitting courtside for the Knicks, on multi-hundred foot yachts….when someone says they make this money legitimately, don’t believe it, after all, Microsoft charged for Windows even if you put Linux on the box.
But these are the people running this country. Whether it be Geithner working for Obama or a Cohen guy helping Trump pick his Justice Department. You can bitch all you want to, say it’s unfair, but that’s the way it is.
And they’re living in a dark world and skating free. They’re untouchable. The government is green and gun-shy, without resources, and the best and the brightest flip to the other side, the private sector, anyway.
And that’s mightily depressing.
But the first half of the book is mightily exciting. Because the players are so damn SMART!
These are not entertainers, nitwits afraid to take a stand. These are people like the dearly departed Jerry Perenchio, who refuse to talk to the press, who most people have no idea even exist, even if they consume their products. You want to come into contact with these geniuses, glean some of their wisdom, as opposed to the public rabble-rousers on Twitter who know no one but are convinced they’ve got the one true truth but are unaware how the game is played.
Do you know how the game is played?
Let’s start from the beginning. There’s no money in music, in most of entertainment, it’s dwarfed by finance and tech. And you might think that is irrelevant, but why is Vivendi testing the waters, thinking of selling Universal Music? FOR THE MONEY! Now is not the time if you’re a long term player, the labels are only gonna go up in value, but Vivendi does not care about music, the financial players aren’t interested in the asset, they’re interested in the CASH!
It’s a funny world we live in. A bifurcated one where the rich get richer and the poor get poorer but all the smart people are rich. Yup, I hate to say that. But the truth is so many poor people are uninformed or holier-than-thou, they think their lack of cash makes them better, but the truth is it only takes them out of the game.
I wish it weren’t so. It didn’t used to be so. Fifty years ago, forty years ago, a successful musician was as rich as anybody in America. But not today, today they’ve all got tech investments, they too want to make bank, whereas their power lies elsewhere, which is speaking truth to power, but they abdicate this ability, because they’re enthralled by power.
Wanna know what that power is?
READ THIS BOOK!
via Lefsetz Letter http://bit.ly/1UlTzoa
May 25, 2017 at 05:20AM