Right, you see that girl over there, the one in that group that keeps looking right at you?'...'Right, let's say I'm convinced she's wearing black knickers - she looks like a black knickers kind of gal to me - and I'm so sure that's what she's wearing, so positive of that sartorial fact, I want to bet a million dollars on it. The trouble is, if I'm wrong, I'm wiped out. So I also bet she's wearing knickers that aren't black, but are any one of a whole basket of colours - let's say I put nine hundred and fifty thousand dollars on that possibility: that's the rest of the market; that's the hedge. This is a crude example, okay, in every sense, but hear me out. Now if I'm right, I make fifty K, but even if I'm wrong I'm going to lose fifty K, because I'm hedged. And because ninety-five per cent of my million dollars is not in use - I'm never going to be called on to show it: the only risk is in the spread - I can make similar bets with other people. Or I can bet it on something else entirely. And the beauty of it is I don't have to be right all the time - if I can just get the colour of her underwear right fifty-five per cent of the time I'm going to wind up very rich...
Robert HarrisTags: explanation finance
I see dead Presidents. Lincoln, Jefferson, Franklin, and Washington.
Nicole FendeTags: profit finance small-business
Many small businesses would rather face an angry barbarian horde than tackle their cash flow statement or price a new product.
Nicole FendeTags: profit finance small-business
If you don’t laugh reading this book I’ll eat my pocket protector. Wait, did I just admit I had a pocket protector?
Nicole FendeTags: fun profit finance small-business
Not a single person has died of boredom reading this book.
Nicole FendeTags: profit finance rock-star small-business
In many ways the effect of the crash on embezzlement was more significant than on suicide. To the economist embezzlement is the most interesting of crimes. Alone among the various forms of larceny it has a time parameter. Weeks, months, or years may elapse between the commission of the crime and its discovery. (This is a period, incidentally, when the embezzler has his gain and the man who has been embezzled, oddly enough, feels no loss. There is a net increase in psychic wealth.) At any given time there exists an inventory of undiscovered embezzlement in — or more precisely not in — the country’s businesses and banks. This inventory — it should perhaps be called the bezzle — amounts at any moment to many millions of dollars. It also varies in size with the business cycle. In good times people are relaxed, trusting, and money is plentiful. But even though money is plentiful, there are always many people who need more. Under these circumstances the rate of embezzlement grows, the rate of discovery falls off, and the bezzle increases rapidly. In depression all this is reversed. Money is watched with a narrow, suspicious eye. The man who handles it is assumed to be dishonest until he proves himself otherwise. Audits are penetrating and meticulous. Commercial morality is enormously improved. The bezzle shrinks.
…
Just as the boom accelerated the rate of growth, so the crash enormously advanced the rate of discovery. Within a few days, something close to a universal trust turned into something akin to universal suspicion. Audits were ordered. Strained or preoccupied behavior was noticed. Most important, the collapse in stock values made irredeemable the position of the employee who had embezzled to play the market. He now confessed.
Tags: crime finance bezzle embezzlement
The ascent of money has been essential to the ascent of man.
Niall FergusonTags: money history finance financial-history
If the financial system has a defect, it is that it reflects and magnifies what we human beings are like. Money amplifies our tendency to overreact, to swing from exuberance when things are going well to deep depression when they go wrong. Booms and busts are products, at root, of our emotional volatility.
Niall FergusonTags: money man humanity finance
A company could use bricks to measure their growth rate. How many bricks have angry investors thrown at you lately? If the answer is none, then your growth rate is probably pretty good… for the moment.
Amy SommersTags: humor random funny finance finance-humor brick-and-blanket-iq-test brick-and-blanket-responses brick-and-blanket-test brick-and-blanket-uses
Instead of stocks investors should invest in blankets, that way they’ll at least have something to keep them warm after they’ve lost all their money when the company goes under.
Amy SommersTags: humor random funny finance stocks brick-and-blanket-iq-test brick-and-blanket-responses brick-and-blanket-test brick-and-blanket-uses investors
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