looking forward to the television series which accompanies it.
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A profile of Stephen Colbert in the Chicago Tribune, marking his appointment to succeed David Letterman, noted that when he was at the Second City improvisational comedy troupe in Chicago, he proved a great salesman.
According to Second City’s CEO Andrew Alexander: “He was working in the box office and became the highest-selling T-shirt salesman we had. I suspect he was very focused, and it sort of speaks to his mentality: ‘This is my job and I’m going to do it well.’” Alexander described Colbert as the “quintessential Second City player.” “That axiom of working at the top of your intelligence was a mantra for Stephen,” he said.
The playwright Israel Horowitz, 75 years old, the author of more than 70 plays, winner of numerous prizes, on selling his new movie “My Old Lady”, the first he had ever directed because he wanted “to do something terrifying”:
“At Festival de Cannes, I had 15-minute meetings with potential distributors, one after another. At some point, I felt like a storm door and window salesman. I had to keep reminding myself that if I wanted to have a movie, I needed to go with it.”
I also recommend reading Ian Leslie’s new book Curious, which I just reviewed for the WSJ. It’s a very well put together inquiry into the value of deep, engaged curiosity, and how the easy answers we can all summon up using technology is jeopardizing it.
I have a piece in the NYTimes today about soccer – my own memories of the game vs. the way it’s seen today, its not so distant grim past vs. the game for brainy parents and kids who know tapas.
Also delighted to say I’ve written another thriller, Black Edge, under my pseudonym of James Welsh and published it using the excellent Creatavist. You can read it online or on your phone once you’ve downloaded the free Creatavist app. For now Black Edge is free. I’d like to think that Welsh is to me as Robert Galbraith is to J.K. Rowling, with the only difference being a slight gulf in our sales figures. Nor have I ever written about wizards.
All three of my thrillers are now available here at Creatavist.
Do let me know what you think.
My defense of high-frequency trading in todays NYTimes is here.
Had I another couple of hundred words, I’d have elaborated on the fact that HFT can be viewed as the revenge of the sell side. After years of being condescended to by the buy side, regulated and having their margins squeezed, the sell side has found revenue in HFT. It’s still not an easy way to make a lot of money – it’s highly competitive and takes a lot of investment in infrastructure – but given the beating the sell side has taken in recent years, it’s not surprising they’ve been happy to make money of HFT.
I’d also not that IEX, the platform described by Lewis in Flash Boys is not the first to try to offer a cleaner platform for institutional traders. Pipeline Trading Systems, which existed from 2004-2012, offered an exchange for large investors to trade away from the high-frequency traders. It leased software from Fidelity and declared itself “predator proof.” Unfortunately, Pipeline could not drum up enough natural buyers and sellers on its exchange, and was found by the SEC to be illegally funneling them in from a trading affiliate.
Liquidnet is another platform which has struggled to become more than a marginal player. The biggest traders have been reluctant to antagonize the investment banks by using alternative exchanges. IEX’s solution of delaying trades so they hit the exchanges simultaneously may prove to be the solution to the market inefficiency the block traders have discerned. Time will tell if they’re really onto something.
And finally, investors I’ve spoken too seem very mixed on this. Some say, if you’re sweating fractions lost to HFT, you’re not much of an investor. Others that’s it’s a real and considerable cost on their trading. Others say that the real rigging of the system is in favor of short-term traders, who are rewarded with low commissions for trading a lot, and long-term traders who pay higher commissions because they trade less often. Yet for the health of the economy, who’d you rather have in business?
My friend Mungo Wilson at the Said Business School pointed me to this wonderful piece by Brad Barber and Terrance Odean from the Journal of Finance, April 2000: Trading is Hazardous to your Wealth. If you find HFT such a nuisance, perhaps easiest to avoid it altogether as well all the other frictional costs of trading, by trading less.
A great book on all kinds of levels: a takedown of high-frequency trading; a Dirty Dozen yarn of outsiders taking on the Wall Street establishment; a righteous tirade against the excessive complexity and insanity of the financial system; a cry for finance to stop sucking money and smart young people out of the rest of the economy. (There is even a wonderful echo from Lewis’ previous book, The New New Thing. On one side of the HFT industry, building a fiber-optic line from New York to Chicago to carry financial data, is Jim Barksdale, the former CEO of Netscape. On the other, backing an HFT-proofed exchange, IEX, is Jim Clark, Netscape’s co-founder. These guys never go away. They are always there applying technology in new, disruptive ways.)
My only caveat is that Lewis may be over-stating the villainy and importance of HFT. Long-term investors don’t worry about a few fractions of a cent when they buy or sell a stock. And even short-term investors may not either. Then there’s the ever rising cost of building the infrastructure for HFT, paying to see order flow etc. This is not a cheap business to get into and sustaining healthy margins is a sweat.
(I note in the review that there are reasonable arguments that the HFTs provide liquidity and greater price efficiency. You don’t have to agree with them, but here’s one, a paper published by the European Central Bank last fall.)
More convincing to me was Lewis’ point that all the frenzied HFT activity renders the exchanges unstable, and has already caused flash crashes and other market spasms. But again, how much of this is due to the simple onward march of technology vs. HFT? Standing athwart progress and shouting “stop, it’s all getting too complicated for the human mind” doesn’t seem the right answer.
Regulators are already all over HFT. I wonder if they’ll find any evidence of actual criminality. Even Lewis concedes the HFTs’ actions are legal. Not pleasant, but legal, the result of a regulatory loophole.
Flash Boys provides yet another cudgel for those who loathe Wall Street and blame it for all the economy’s ills. HFT will likely now be squeezed out of existence. I never thought I’d say this, but I hope this marks a temporary end to this recent era of Wall Street bashing. What’s transforming economic life in America isn’t Wall Street anymore. It’s the vaunted technology companies of Silicon Valley. They are rightly admired for their innovation and daring. But they’re also draining the economy of jobs much faster than they create them. And their revenues dwarf any made on Wall Street. They represent the toughest paradox in the US economy today. Taking them on will make HFT bashing look as one-sided as seal-clubbing.
Late last year, I finally became an American citizen. It was long overdue. At one point in the process, an immigration official had to test my spoken and written English, though it was clear both were adequate. “What do we pay the United States government?” he asked me. “Taxes,” I replied. “Correct. Now please write this sentence. ‘We pay taxes'”. And with that, I passed.
When I started the process, it felt merely bureaucratic. But by the end, as I raised my hand in a New Haven court house to swear the oath of citizenship, it felt like far more than paperwork. I describe it in the Wall Street Journal today, in a piece Why I Chose the Red, White and Blue.
The other night, my neighbor and most excellent friend Visko Hatfield, appeared at my door with a box. In it was a flag flown over the Capitol to mark the occasion. Must now find a Marine to teach me to fold it properly.
There’s real promise in these things, but a way to go yet. Still a lot of content dumping with not enough consideration of how students might actually complete the courses, or what collectively they add up to. A real MBA alternative, for free? Something employers take seriously? Or are the big MBA programs just doing what those threatened with disruption always do, push out a few experiments in the hope that’ll be enough to stop the threat?
One of my favorites, the ultra-deadpan Christian Terwiesch on Operations Management.
A fascinating extract from Mark Halperin and John Heileman’s Double Down in New York magazine this week explains how the President and his team corrected course after the debacle of the first debate vs. Obama. It’s a powerful lesson in how everyone can benefit from ruthless self-examination and outside scrutiny. How our instincts can betray us. And how to present yourself under the very brightest stage lights.
As Halperin and Heileman tell it, Obama was reeling after the first debate. Romney had beaten him soundly and the polls were showing it. But in private prep sessions for the next debate, the President seemed disengaged, rambling, haughty. He used the classic bad salesman’s excuse: “I’m a naturally polite person.” His team feared another fiasco would sink the campaign. They presented him a memo to remind of “the Six A’s” vital to debating:
Advocate (don’t explain)
Answers with principles and values
Allow your self to take advantage of openings
Halperin and Heilemann are skilled storytellers, and the story is framed very much as one of triumph over impending disaster, and reflects very well on the President and his team, who evidently told the writers this story. That said, the President recognized he was having trouble in these debates. He tells his staff he cannot just perform. He’s a lawyer by nature and training. He likes to be logical. He resents the fakery of these debates.
It’s against my instincts just to perform. It’s easy for me to slip back into what I know, which is basically to dissect arguments. I think when I talk. It can be halting. I start slow. It’s hard for me to just go into my answer. I’m having to teach my brain to function differently. I’m left-handed; this is like you’re asking me to start writing right-handed.
In the subsequent training sessions, Obama did improve. When he started to digress, his advisors yelled “Fast and hammy!” to keep him on track. And fast and hammy he was.
One paragraph in the book really caught my attention, and applies just as well to sales as it does to politics. Sales is often the last thing you have to do, after all the hard work of developing a product. So it’s worth taking the time to get it right. Here’s how Ron Klain explained the debates to the President:
Klain employed a sports analogy. The Tennessee Titans lost the Super Bowl a couple of years ago because their guy got tackled on the one-yard line, he said – the one-yard line! That’s where we are. The hardest thing for any candidate in a debate is to know the substance. You have that down cold. All we need is a little more effort on performance. You need to go in there and talk as fast as you can. You need to add a little schmaltz, talk about stuff the way that people want to hear it. This isn’t about starting from scratch. We’ve got most of it right. The part we have left to get right is small. But as the Titans proved, small can mean the difference between winning and losing.
Knowing the substance is one thing. Adding the sauce of sales may not be what you want to do, but without it you’ll be at least one yard short.