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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: macavity who wrote (5234)	12/8/2001 7:25:46 AM
From: Henry Volquardsen	Read Replies (2) \| Respond to of 33421

First, are you any relation to Ian Macavity? He's a newsletter writer of Canada, I used to enjoy his work whenever I saw it. My point is really about the quality of management. You say "Management are all to happy about money coming in." Not true. Good management is cynical. I managed a business segment that was a market maker in several derivatives and ran several arbitrages. My attitude was always that there was no free lunch and made sure I knew every detail before we proceeded and took the most conservative accounting approach possible. The reason was I didn't care about 1 years bonus but a long term business. And even so we occassionally missed something. Of course it was never a big deal because we had been so conservative. And every year I had to explain every item in detail to the firm's accountants. I even had meetings with the Chairman where he wanted to know exactly what we were doing. Imo, that is what you want to see in management. But, getting back to your post, our attitude WAS 'We made that money very easily. How did we do it?' We were always skeptical. Thats why we didn't get in trouble. It's the firms that don't that do. The last part of your post can only happen in a badly managed firm. That WAS the m.o. of a lot of firms and players in the early days but management and shareholders at serious firms and bank and insurance regulators have gotten the joke. More and more steps have been taken to control that stuff. Henry