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They have never learned how to take the pain.....
Guys that come through the fire learn that if it can go wrong it will go
wrong and plan accordingly.
I think that one of the greatest shames of the institutional world is the
lack of institutional or collective memory. But my experience has been that
collective memory only lasts as long as you are outperforming those around
you.
Each cycle makes for a different group of heros and even those who are
flexible enough (at least out on the periphery) to survive end up taking
chances that they aren't very comfortable with in order to keep up.
At 11:02 AM 10/6/98 -0500, Timothy Morge wrote:
>Stewart:
>
>First problem with many of these spread traders is that, as in most of the
>markets today, we're talking about an abnormal market that was *13* years
ago.
>The majority of the risk takers out there in the trenches of institutions
>weren't around in 1985. There's very little collective memory out there of
these
>types of markets, and the models that *some* of these people are using as
their
>guiding light can't capture such abnormal market behaviour.
>
>I not only wonder how much this guy is going to give up, but if he even has
>thought that perhaps he was one of the lucky guys and hence, views this as an
>opportunity to take windfall profits.
>
>Best,
>
>Tim Morge
>
Stewart Taylor
Taylor Fixed Income Outlook
Voice: 501-219-9774
Fax: 501-228-0963
E-Mail: staylor@xxxxxxx
Web Site: http://www.cei.net/~staylor/
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