one question, Javelin...

Eight figures is $10 to $99 million.

What's the trade?

Are you saying you bop around like a bee, from flower to flower on the client side, finding and explaining opportunities, and structuring one-time deals?


Or do you go around, and teach the people on both sides of the deal better processes and habits to interface?


I'd be a derivatives evaluation consultant any day. It would be my dream job. I could spend the rest of my life saving idiots from going broke - kind of like the "dermatologist" ideal.


So how do you do it? How do you take an opportunity from one vantage point, and turn it into a product someone isn't afraid to swallow at another vantage point?


After all, credibility means being honest, but sales means lying. So how do you make Flintstones vitamins out of derivatives?


Is the whole trick that you're somehow "independent" - and therefore, like, unbiased?


I'd love to be a banker But I don't have even have a college degree.


eLROY

Just because every sale you've seen involved lying doesn't mean that selling requires lying. There are completely truthful ways to sell. It's in some of the stuff you've written. If a bartender can buy a pound of coffee beans for $3 and sell the coffee he makes from those beans for $5, then it is still possible to strike a deal with him to sell him coffee beans at $3 per pound even if you tell him that it costs you $1 per pound to get the beans. There are ways for you to avoid getting commoditized.


The sticking point for someone like David is that actually going around and pushing these deals through is not fun. Even if someone could provide him with a very effective presentation, lined him up with a series of highly receptive bartenders who could each move millions of pounds of beans annually, and was willing to pay him $1 per pound commission for each deal he closed, my guess is that he would rather do what he's doing now.

For me, all the fun in trading was in finding profitable opportunities. I should start a billion-dollar hedge fund, but then, when I'm done selling it - and have the strategy all mapped out - I'll have to screw down and trade for the next 10 years!


And I'm bored of poker, it's the same thing every round. I'm in almost every hand raising pre-flop, and then it's me and the big blind and one other guy - trying to pick me off or rope-a-dope or something. So all the sharks end up on my left, and all the fish on my right where I can "claim" them.


Any time a fish raises to my right, I re-raise with anything. If no one has opened, and it's nothing but sharks behind me to the button, I'll fold just about anything short of rockets. And so some people think I'm "changing gears" or something, other people think I'm a maniac, and they all make their silly, transparent little "adjustments" right before my eyes!


On the flop, if they both call, I muck. If one folds, I'll put a read on the other one, and either re-re-raise or muck. Then, they try to pick up on some pattern, and fire back with their own raises, or just call on the turn, but it's so obvious, it's the same thing every time. They spend a whole rack just trying to get up to speed.


I bluff bet and they fold. I bluff bet, they call, and I fold. Next time, I bet, they raise, and I fold. Next time, I bet, they raise, thinking I am bluffing, I reraise, they would fold the turn - but I check! Next time, I bluff, they bet, I check-raise, they re-raise with nothing, that's the point they're at. You catch them coming and going, lucky and unlucky, up, down, hand after hand after hand it goes.


And I'm not even that good! In the course of an hour, my opponents can give up about eleven big blinds, in bad capped-flop play and stupid river calls. And I give back about six of those in over-loose calling pre-flop, and still hope to end up with five. The only real skill I've aquired is to swim in a way that keeps about twelve feet of water between me and the other sharks.


So, anyway, I'd much rather push the people, and use my reading skills that way, it'd be much more fun. The only way to really have fun with people at a poker table is to make them all poor. And the only way to get to hang out with other fun people is to get poor yourself. Can you imagine playing at a table with Ray Zee, Tommy Angelo, and Abdul Jalib?


With poker, it's either a bust, or it's Romper Room. I'm bored of it, and I'd take another job, where I could talk to about a thousand different people on the phone each day, in a second. Heck, just to sell some guy a pound of beans, I'd be willing to give him as much attention as I used to give girls


So even if nobody actually bought a single bean for 10 years, I'd be having more fun just trying! Or, if it ever got easy, maybe then we'd start to have a problem. So, anyway, when I see someone like GummyWorm, and how much fun he is having playing poker, I have to admit I'm a little jealous.


eLROY

I won't lie to you... i didn't read your entire post, or half or even a quarter of it so i may have completely missed the point. But I think this is the point you are trying to make: people just need a low cost, efficient way to exchange information in an honest and trasparant manner... then we wouldn't need all these fancy derivatives.


And thats true... if you really break finance down to its core, its all about risk and the price of risk. THere are sellers of risk and buyers of risk and they come together in a marketplace and establish a price. This is true for bonds, stocks, and all their related derivatives. The point i want to make is that while derivatives have gotten a bad name in the press, they are a vital tool in facilitating the exchange of risk and allowing for the further development of an efficient capital allocation system.


If you really think about it, everything is a derivative. People tend to think in terms of derivatives and underlying securities like stocks and bonds, but they're all really the same thing: just instruments, tools to move risk around. What complex derivatives allow people to do is to definte more precisely the nature of the risk being traded and to customize this according to one's needs.

I wondering, once someone becomes immunized, and transfers the risk of finding counterparties for some stream of transactions to someone else, can he buy his way out?


Meaning, suppose I lock in that you have to provide me with one of these five things, at these prices, under these circumstances, at these points in the future.


Do I ever then say, like, okay, just give me a lump sum of cash right here and forget about it?


Or, do I ever say, here is some cash for the effort, thanks, but no thanks?


How often are these obligations erased early with lump-sum cash payments?


Thanks!!!!!!!!


eLROY