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Technology Stocks : LAST MILE TECHNOLOGIES - Let's Discuss Them Here -- Ignore unavailable to you. Want to Upgrade?

To: axial who wrote (11429)	6/14/2001 3:15:04 PM
From: Raymond Duray	Respond to of 12823

Hi Jim, Re: I think my problem has been insufficient cynicism; I'm taking booster shots, now. >smile< You aren't even in the ballpark yet, if you want to succeed in public market trading. Here's your next lesson: The Setup: Message 15371138 The Reality of Wall Street: siliconinvestor.com ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ I recently read a fascinating book by Frank Partnoy called F.I.A.S.C.O. (Fixed Income Annual Shooting Clay Outing), it was an annual event for the MSDW DPG (Derivative Products Group) and it was a real eye opener. One anecdote.... Partnoy, who was creating some of the most exotic and complex financial instruments happened to overhear a trader working the phone, the trader was in conversation with one of his very worried customers, a Treasurer of a Midwestern insurance company, who fears he's ruined his career. Here's a re-creation of the phone call and the follow-up. Treasurer: "What in the hell is going on here? I'm down $7 million on this contract? How can that be? I thought I was involved in a Yen carry trade and you are telling me that because the Thai Baht has been devalued that I've lost this much? I never even had anything to do with the Thai baht." Trader: "If you will review the swaps contract, you'll see at the bottom of page 17 that your position in the Yen was conditional on its trading against the Baht. Didn't you read your contract?" Treasurer: "No, I guess I didn't read that far into it. What the hell can I do now? If I can't get out of this position I'm screwed. Trader: "Let me see what kind of a hedge we can put on against this position. I'll get back to you." Partnoy: "So, what was that all about." Trader: "Oh, I just ripped (my customer's) face off." ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Fun, huh? Best, Ray