Let just start off with a warning: the following contains subject matter that may be somewhat off-putting to those with more delicate sensibilities..
It's actual inevitable (well, not really, I am just making it so)that a blogger with children will eventually get around to blogging about...poop.
Tonight I put my sweet little man (almost ten months old) into his little tub. He cried for a moment, and then put himself into a position wherein his chin was hanging almost over the edge, and he looked relaxed. Very relaxed. So relaxed that as I got the soap in my hand to wash him, I saw why he looked so content. Let's just say I needed to get him out of there quickly, the floating pieces not something I'd want him to bathe in. I yanked him out, rinsed him off in the sink, and gave up on the bath (no I did not wash his hair, those "long flowing locks" would have to wait to be washed). He thought this all the height of hysteria and smiled and giggled throughout. After everything was bleached and cleaned (the tub, etc, not the baby), I was reminded of another bath time mishap with another child.
She must have been about two years old. She got in the tub, and after about two minutes, I noticed an object floating along with the rubber duckies. Out she came, the tub was drained and cleaned with Comet, rinsed, and I let the water in again. I may have even sat her on the toilet (not that she was trained, but she needed to be somewhere "safe").
New water, in she went, two minutes passed, and another object floating around. Out she came, drainage, Comet, rinse. I felt she needed to be washed, so I let the water in again. She stood there watching as the water filled up. I turned off the tub, and as I was about to lift her in, she urinated on the floor.
I laughed uncontrollably. She couldn't do THAT in the tub???????
Monday, March 28, 2011
Wednesday, March 23, 2011
Uncle Harvey....
Dear World,
There is a phrase that seems to be making a comeback that grates on my nerves so badly that I think if I hear it again I will possibly crack my teeth or potentially even break my jaw from clenching them so hard. It puts me so on edge, and tonight I figured out why.
I was speaking to my daughter and she said something that was not the offending phrase, but the words were so eerily similar to that maxim of misery, that I finally understood why I hate it so much.
What is this calamitous catchphrase?
"It's All Good."
I loathe this locution. Firstly, it is mostly untrue. But what I learned tonight is that it is used to avoid having to judge anything. Really though, for society to work and to be able to maintain a civil and moral way of life people need to judge. They need not necessarily condemn other people to the outer edges of life, they need not discard other people, but if we don't judge- and by that I mean we do not weigh the actions of others against a set of behaviors we consider appropriate-if everything is "good" and there are no value judgments, well then there are problems.
Is man good or evil? Neither, he is swayed by both, but man is very swayed by the opinion of others, and if things are deemed unacceptable, then those negative behaviors are more likely to be stopped, or at least not become the norm. Is this a double edged sword in which goodness can also be judged, and thereby attacked? Absolutely. Yet, a world of "It's all good," is a world of moral relativity, it's a world where whims of man take on more weight then they should.
There are those who may argue they say this when referring to frustrating moments in their lives, moments when they need to remind themselves that there is a Creator who is looking out for us, even if we do not always see the goodness in His ways, we know that they are good. Absolutely, I believe that, but I honestly do NOT believe that this expression is trying to convey this lofty idea.
So please, please, please-stop using this.
My dentist is rooting against me on this one.
There is a phrase that seems to be making a comeback that grates on my nerves so badly that I think if I hear it again I will possibly crack my teeth or potentially even break my jaw from clenching them so hard. It puts me so on edge, and tonight I figured out why.
I was speaking to my daughter and she said something that was not the offending phrase, but the words were so eerily similar to that maxim of misery, that I finally understood why I hate it so much.
What is this calamitous catchphrase?
"It's All Good."
I loathe this locution. Firstly, it is mostly untrue. But what I learned tonight is that it is used to avoid having to judge anything. Really though, for society to work and to be able to maintain a civil and moral way of life people need to judge. They need not necessarily condemn other people to the outer edges of life, they need not discard other people, but if we don't judge- and by that I mean we do not weigh the actions of others against a set of behaviors we consider appropriate-if everything is "good" and there are no value judgments, well then there are problems.
Is man good or evil? Neither, he is swayed by both, but man is very swayed by the opinion of others, and if things are deemed unacceptable, then those negative behaviors are more likely to be stopped, or at least not become the norm. Is this a double edged sword in which goodness can also be judged, and thereby attacked? Absolutely. Yet, a world of "It's all good," is a world of moral relativity, it's a world where whims of man take on more weight then they should.
There are those who may argue they say this when referring to frustrating moments in their lives, moments when they need to remind themselves that there is a Creator who is looking out for us, even if we do not always see the goodness in His ways, we know that they are good. Absolutely, I believe that, but I honestly do NOT believe that this expression is trying to convey this lofty idea.
So please, please, please-stop using this.
My dentist is rooting against me on this one.
Monday, March 21, 2011
Soda Wars
As an avid consumer of soft drinks, I've always taken an interest in the business side of soda. Therefore, it was with a good deal of interest that I reviewed Beverage-Digest's Top 10 CSD (carbonated soft drinks) list for 2010 when it was released last week.
Here are the top 10, based upon unit sales volumes:
(1) Coke
(2) Diet Coke
(3) Pepsi Cola
(4) Mountain Dew
(5) Dr. Pepper
(6) Sprite
(7) Diet Pepsi
(8) Diet Mountain Dew
(9) Diet Dr. Pepper
(10)Fanta
A few interesting points:
* Diet Coke overtook (regular) Pepsi Cola as the #2 brand for the first time.
* Both Diet Mountain Dew and Diet Dr. Pepper increased by more than 5% over 2009's levels, which is considered a very large increase for a mature brand. Incidentally, both of these drinks contain caffeine.
* Overall, Diet drinks made up over 30% of total carbonated soft drink sales, which is a new high.
* The top 10 brands combined for a 65% share of the overall market.
* In terms of overall company rankings, Coca Cola remained #1, with a 42% market share. PepsiCo was second, with a 29.3% share.
* Energy drink sales continue to grow at a substantially higher rate than the rest of the industry's volumes. Red Bull and Rockstar grew total volumes by 13% and 19%, respectively.
* The overall U.S. carbonated soft drink business declined 0.5%. This category last grew in 2004, and overall sales are back to where they were in 1996. Obviously, given the country's population increase over the past decade and a half, per capita consumption of carbonated soft drinks is lower than it has been in a long time.
Putting some of this information together, I conclude (perhaps erroneously, but then again, I'm not being paid for my analysis) that in general, the soft drink-consuming public is moving away from sugar, and towards caffeine.
It will be interesting to see whether or not this trend towards diet drinks intensifies if certain municipalities (like New York City) implement a tax on sugary soft drinks.
Hopefully, we'll never find out.
In the meantime, I'm glad to hear that I'm not the only one who is consuming caffeine.
Then again, I might have single-handedly pushed Diet Coke past Pepsi-Cola into the #2 spot.
That should be good for a free soda or two, shouldn't it?
Here are the top 10, based upon unit sales volumes:
(1) Coke
(2) Diet Coke
(3) Pepsi Cola
(4) Mountain Dew
(5) Dr. Pepper
(6) Sprite
(7) Diet Pepsi
(8) Diet Mountain Dew
(9) Diet Dr. Pepper
(10)Fanta
A few interesting points:
* Diet Coke overtook (regular) Pepsi Cola as the #2 brand for the first time.
* Both Diet Mountain Dew and Diet Dr. Pepper increased by more than 5% over 2009's levels, which is considered a very large increase for a mature brand. Incidentally, both of these drinks contain caffeine.
* Overall, Diet drinks made up over 30% of total carbonated soft drink sales, which is a new high.
* The top 10 brands combined for a 65% share of the overall market.
* In terms of overall company rankings, Coca Cola remained #1, with a 42% market share. PepsiCo was second, with a 29.3% share.
* Energy drink sales continue to grow at a substantially higher rate than the rest of the industry's volumes. Red Bull and Rockstar grew total volumes by 13% and 19%, respectively.
* The overall U.S. carbonated soft drink business declined 0.5%. This category last grew in 2004, and overall sales are back to where they were in 1996. Obviously, given the country's population increase over the past decade and a half, per capita consumption of carbonated soft drinks is lower than it has been in a long time.
Putting some of this information together, I conclude (perhaps erroneously, but then again, I'm not being paid for my analysis) that in general, the soft drink-consuming public is moving away from sugar, and towards caffeine.
It will be interesting to see whether or not this trend towards diet drinks intensifies if certain municipalities (like New York City) implement a tax on sugary soft drinks.
Hopefully, we'll never find out.
In the meantime, I'm glad to hear that I'm not the only one who is consuming caffeine.
Then again, I might have single-handedly pushed Diet Coke past Pepsi-Cola into the #2 spot.
That should be good for a free soda or two, shouldn't it?
Monday, March 14, 2011
A Purim Tale: Part I
As the holiday of Purim approaches, IcebergCarwash is pleased to bring you a somewhat modernized version of the Purim story, presented in seven installments, the first of which is presented in this post, with subsequent installments presented consecutively below:
And it was in the days of Ahasueres, a mighty king, whose dominion covered nearly all of the inhabited world, and who possessed an investment portfolio to match. After one particularly profitable year, during which the king’s portfolio handily beat all of its benchmarks, he made a lavish holiday party for all of his portfolio managers, traders, analysts, and the entire back office staff. He invited representatives of the regulatory agencies as well, just to stay in their good graces. For a period of 180 days, spanning the entire football season, and the majority of the baseball, basketball and hockey seasons, the king entertained party goers with his unparalleled collection of season tickets. The VIPs were granted access to the king’s luxury suites at these events. Needless to say, the alcohol flowed ceaselessly for the entirety of the 180 day party. Sure, it was highway robbery to charge $10 for a cup of watered down stadium swill, but with the king picking up the tab, who really cared? Attendees drank to their heart’s content, and the king’s popularity ratings hit an all-time high.
Unfortunately, the king’s wife, Queen Vashti, was not impressed by his investment returns. For one thing, the king had merely served as an investor. The actual decision-making was made by his vast army of money managers. The king had not made a single buy or sell decision all year. If anything, Queen Vashti had been much more directly involved than her husband in choosing the money managers. Why, the king had not even made an overall asset allocation decision for the portfolio! Queen Vashti doubted that he even knew how to use the asset allocation software that one of his people had developed.
Flush with the success of his portfolio, the king became a sought-after “expert” on investment matters. He was a frequent guest on financial TV and radio shows. As the 180-day party was winding down, he decided to host an investor conference for finance professionals located in the capital city of Shushan. The king himself would serve as the keynote speaker at this conference, dispensing his sage advice.
The investor conference was well-attended, probably more for the free food, wine and giveaways than for the pearls of wisdom the attendees would glean from the various speakers. As the king’s keynote address approached, he decided to put together a panel discussion for the Q&A session which would follow his speech. Naturally, he asked Queen Vashti to chair the panel. She was a knowledgeable panelist, and her inclusion in the proceedings would allow the king to show off his wife’s admirable financial acumen.
When she learned of the king’s request, Queen Vashti was incensed. “A panelist, is that all I’m good for?” she fumed. “He won’t even allow me to give a presentation? When I met him, his "investment research" involved hanging out at the racetrack, looking for tips, and now he's an expert?” Queen Vashti flatly refused the king’s request, going so far as to sign up as an attendee at a small-cap biotechnology stock conference, held at a small, out-of-the-way facility. To ensure that she would be unavailable for the king’s conference, she arrived at her conference a day early, which allowed her to participate in the pre-conference festivities, such as the “best ball” golf tournament. Her team finished fourth, which was considered a decent showing.
Upon hearing that Queen Vashti would not be attending his conference, much less chairing a panel discussion, the king became enraged (although he did seem mildly impressed by her team’s fourth-place finish in the “best ball” tournament). He gathered his seven closest financial advisors, and asked them what to do.
Now, most of these advisors were “low beta” types, who hated to take risks, financial or political. These guys didn’t look for alpha, they hid from it. Not surprisingly, they didn’t really have any solid suggestions for the king. One manager, though, a fellow by the name of Memukan, was more than happy to chime in. Memukan had a real bone to pick with the Queen. The Queen was no saint, and Memukan knew it. As the key decision-maker for the king when it came to choosing specific money managers to invest the king’s money, she had been running a pay-for-play scam for years. Even that particular process was not even-handed. Despite the fact that his firm had paid a substantial amount of graft to the Queen, they had never been entrusted with more than a token amount of the king’s assets. Memukan was determined to receive a substantially larger allocation for his fund, and the dramatically increased fees and prestige that would result, and now he had his chance.
“Your Highness should immediately remove Queen Vashti from her position on the king’s Investment Committee,” stated Memukan. “In fact, I recommend that she lose her license entirely, and be permanently barred from the investment industry in each of the 127 countries over which Your Highness so splendidly rules.”
Memukan’s words resonated with the fuming king. Who did Vashti think she was, anyway? He was the king, so it was his portfolio they were managing, not hers. And, if he wanted to put together a conference, it was her duty to not only attend, but to also participate in the manner which he requested. Besides, despite her obvious talents as a portfolio manager, Vashti had proven completely incapable of managing tail risk. Memukan’s recommendation was invoked, and the Queen was thusly banished forever. For good measure, the king implemented a decree, which stated that from that day forward, in matters pertaining to the investment of household funds, men would have the final say over their wives, in the event of a dispute.
And it was in the days of Ahasueres, a mighty king, whose dominion covered nearly all of the inhabited world, and who possessed an investment portfolio to match. After one particularly profitable year, during which the king’s portfolio handily beat all of its benchmarks, he made a lavish holiday party for all of his portfolio managers, traders, analysts, and the entire back office staff. He invited representatives of the regulatory agencies as well, just to stay in their good graces. For a period of 180 days, spanning the entire football season, and the majority of the baseball, basketball and hockey seasons, the king entertained party goers with his unparalleled collection of season tickets. The VIPs were granted access to the king’s luxury suites at these events. Needless to say, the alcohol flowed ceaselessly for the entirety of the 180 day party. Sure, it was highway robbery to charge $10 for a cup of watered down stadium swill, but with the king picking up the tab, who really cared? Attendees drank to their heart’s content, and the king’s popularity ratings hit an all-time high.
Unfortunately, the king’s wife, Queen Vashti, was not impressed by his investment returns. For one thing, the king had merely served as an investor. The actual decision-making was made by his vast army of money managers. The king had not made a single buy or sell decision all year. If anything, Queen Vashti had been much more directly involved than her husband in choosing the money managers. Why, the king had not even made an overall asset allocation decision for the portfolio! Queen Vashti doubted that he even knew how to use the asset allocation software that one of his people had developed.
Flush with the success of his portfolio, the king became a sought-after “expert” on investment matters. He was a frequent guest on financial TV and radio shows. As the 180-day party was winding down, he decided to host an investor conference for finance professionals located in the capital city of Shushan. The king himself would serve as the keynote speaker at this conference, dispensing his sage advice.
The investor conference was well-attended, probably more for the free food, wine and giveaways than for the pearls of wisdom the attendees would glean from the various speakers. As the king’s keynote address approached, he decided to put together a panel discussion for the Q&A session which would follow his speech. Naturally, he asked Queen Vashti to chair the panel. She was a knowledgeable panelist, and her inclusion in the proceedings would allow the king to show off his wife’s admirable financial acumen.
When she learned of the king’s request, Queen Vashti was incensed. “A panelist, is that all I’m good for?” she fumed. “He won’t even allow me to give a presentation? When I met him, his "investment research" involved hanging out at the racetrack, looking for tips, and now he's an expert?” Queen Vashti flatly refused the king’s request, going so far as to sign up as an attendee at a small-cap biotechnology stock conference, held at a small, out-of-the-way facility. To ensure that she would be unavailable for the king’s conference, she arrived at her conference a day early, which allowed her to participate in the pre-conference festivities, such as the “best ball” golf tournament. Her team finished fourth, which was considered a decent showing.
Upon hearing that Queen Vashti would not be attending his conference, much less chairing a panel discussion, the king became enraged (although he did seem mildly impressed by her team’s fourth-place finish in the “best ball” tournament). He gathered his seven closest financial advisors, and asked them what to do.
Now, most of these advisors were “low beta” types, who hated to take risks, financial or political. These guys didn’t look for alpha, they hid from it. Not surprisingly, they didn’t really have any solid suggestions for the king. One manager, though, a fellow by the name of Memukan, was more than happy to chime in. Memukan had a real bone to pick with the Queen. The Queen was no saint, and Memukan knew it. As the key decision-maker for the king when it came to choosing specific money managers to invest the king’s money, she had been running a pay-for-play scam for years. Even that particular process was not even-handed. Despite the fact that his firm had paid a substantial amount of graft to the Queen, they had never been entrusted with more than a token amount of the king’s assets. Memukan was determined to receive a substantially larger allocation for his fund, and the dramatically increased fees and prestige that would result, and now he had his chance.
“Your Highness should immediately remove Queen Vashti from her position on the king’s Investment Committee,” stated Memukan. “In fact, I recommend that she lose her license entirely, and be permanently barred from the investment industry in each of the 127 countries over which Your Highness so splendidly rules.”
Memukan’s words resonated with the fuming king. Who did Vashti think she was, anyway? He was the king, so it was his portfolio they were managing, not hers. And, if he wanted to put together a conference, it was her duty to not only attend, but to also participate in the manner which he requested. Besides, despite her obvious talents as a portfolio manager, Vashti had proven completely incapable of managing tail risk. Memukan’s recommendation was invoked, and the Queen was thusly banished forever. For good measure, the king implemented a decree, which stated that from that day forward, in matters pertaining to the investment of household funds, men would have the final say over their wives, in the event of a dispute.
A Purim Tale: Part II
The Story So Far: King Ahasueres dismisses the insubordinate Queen Vashti from her post as the head of his Investment Committee, and bans her for life from the securities industry.
After a while, the king’s investment fortunes began to change for the worse. Amid general market weakness, his portfolio sagged, and underperformed even the anemic general market benchmarks. He and his army of financial advisors and portfolio managers had seemingly lost their touch. One day, while preparing to ring the opening bell at the Shushan Stock Exchange, in commemoration of one event or the other, the king’s thoughts turned to his deposed queen. He remembered Vashti and the positive influence she had on his portfolio, and missed her well thought-out asset allocation decisions, and her ability to gain a quick, thorough understanding of even the most exotic securities. Unfortunately, there would be no bringing her back now. Vashti was damaged goods, and even if he could get her reinstated by the authorities, her return would bring unwanted additional scrutiny to any firm even loosely associated with his portfolio. It was also clear to the king that there was no one within his shop who was prepared to take over that position. He would have no choice but to look outside to find someone.
The king set up a meeting with his outside counsel, at their offices. The king sat at the head of a massive table in a conference room on the 32nd floor of an office building in downtown Shushan, as several partners (billing an average of $825/hour) tossed recommendations his way. Finally, an associate (billing a relatively modest $450/hour) came up with a really good idea. “Your majesty should gather together portfolio managers from all over the land, and sequester them in a small, WiFi-equipped office building on the royal campus. These money managers should be given everything they need to do their jobs. Each portfolio manager will receive a laptop preloaded with the trading software of his/her choice, a subscription to whichever daily/weekly/monthly financial publication he/she desires, a Bloomberg terminal (with two screens!), and a personal “Excel jockey” to do his/her spreadsheet work. Each manager will be given a $10 million model portfolio, and will invest/trade that portfolio over a period of six months. After six months, each portfolio will be reviewed, to see how the portfolio managers fared. In addition, each portfolio manager will spend the entirety of a single trading day with the king, so that he/she can be witnessed in a “live” setting. After that, the portfolio manager will be given 60 minutes to describe his/her investment style to the king, and to discuss how he/she would invest the king’s portfolio.”
This idea pleased the king greatly, and he decided to proceed accordingly.
Feeling quite full of himself, the young associate added, “Of course, I’d also recommend that Your Majesty sign a nondisclosure/non-compete agreement with each portfolio manager. The last thing we need is for Your Highness to run into any intellectual property issues down the road.”
At this point, the king frowned deeply, whereupon the uppity associate was promptly removed from the conference room (and the firm’s fast track) and sentenced to 10 years of proofreading regulatory filings.
After a while, the king’s investment fortunes began to change for the worse. Amid general market weakness, his portfolio sagged, and underperformed even the anemic general market benchmarks. He and his army of financial advisors and portfolio managers had seemingly lost their touch. One day, while preparing to ring the opening bell at the Shushan Stock Exchange, in commemoration of one event or the other, the king’s thoughts turned to his deposed queen. He remembered Vashti and the positive influence she had on his portfolio, and missed her well thought-out asset allocation decisions, and her ability to gain a quick, thorough understanding of even the most exotic securities. Unfortunately, there would be no bringing her back now. Vashti was damaged goods, and even if he could get her reinstated by the authorities, her return would bring unwanted additional scrutiny to any firm even loosely associated with his portfolio. It was also clear to the king that there was no one within his shop who was prepared to take over that position. He would have no choice but to look outside to find someone.
The king set up a meeting with his outside counsel, at their offices. The king sat at the head of a massive table in a conference room on the 32nd floor of an office building in downtown Shushan, as several partners (billing an average of $825/hour) tossed recommendations his way. Finally, an associate (billing a relatively modest $450/hour) came up with a really good idea. “Your majesty should gather together portfolio managers from all over the land, and sequester them in a small, WiFi-equipped office building on the royal campus. These money managers should be given everything they need to do their jobs. Each portfolio manager will receive a laptop preloaded with the trading software of his/her choice, a subscription to whichever daily/weekly/monthly financial publication he/she desires, a Bloomberg terminal (with two screens!), and a personal “Excel jockey” to do his/her spreadsheet work. Each manager will be given a $10 million model portfolio, and will invest/trade that portfolio over a period of six months. After six months, each portfolio will be reviewed, to see how the portfolio managers fared. In addition, each portfolio manager will spend the entirety of a single trading day with the king, so that he/she can be witnessed in a “live” setting. After that, the portfolio manager will be given 60 minutes to describe his/her investment style to the king, and to discuss how he/she would invest the king’s portfolio.”
This idea pleased the king greatly, and he decided to proceed accordingly.
Feeling quite full of himself, the young associate added, “Of course, I’d also recommend that Your Majesty sign a nondisclosure/non-compete agreement with each portfolio manager. The last thing we need is for Your Highness to run into any intellectual property issues down the road.”
At this point, the king frowned deeply, whereupon the uppity associate was promptly removed from the conference room (and the firm’s fast track) and sentenced to 10 years of proofreading regulatory filings.
A Purim Tale: Part III
The Story So Far: Acting on the advice of his outside counsel, King Ahasueres arranges an investment contest to determine the successor of Queen Vashti as head of his Investment Committee.
There was a sage, veteran portfolio manager, whose name was Mortimer (“Morty”) Kai, who had been through countless bull and bear markets, had seen numerous asset bubbles inflate and then collapse, who had witnessed the destructive effects of the unencumbered use of leverage. He had a particularly promising trainee by the name of Hadassah (known to her Facebook friends as “Esther”), to whom he was giving over as much as he could of his vast investment knowledge.
Esther had been making something of a name for herself in certain investment circles, having proved adept at deriving profits from the currency markets by using options to construct synthetic baskets of otherwise illiquid currencies.
Still, she was quite new to the managed money game, so it was something of a surprise to her – and to her mentor Morty Kai – when she was asked to join the king’s portfolio manager contest. At first, she protested, fearful that she would only end up making a fool of herself. However, the king’s people made it clear that this was not really an optional invitation. “Besides,” they said almost dismissively, “At least you’ll provide some liquidity.” Her ears still stinging with this most heinous insult, Esther was practically dragged to the designated office building.
Morty Kai was gravely concerned for his protégé’s well-being. He was well aware of the rules of the king’s portfolio contest, and he feared that the short-term nature of the six-month performance assessment period would cause Esther to take undue risks. Sure, Morty Kai could day trade with the best of them, if needed. How could he forget the profits he had made in Consolidated Silk within a couple of frantic hours so many years ago? Still, his experience had taught him that the really big money was made from positions that sometimes took years, not weeks or months, to establish. A six-month contest was nothing more than a spin of the roulette wheel.
Another problem was presented by the king’s insistence that the money managers all describe their investment style, allowing him to lump a bunch of them into one category or the other, such as “growth” “value,” “growth at the right price (GARP),” “momentum,” “contrarian,” and so on. Morty Kai had instructed Esther to avoid this trap, and to resist allowing anyone to boil her investment style down to a single word or phrase. Ever loyal to Morty Kai, Esther in fact resisted these canned descriptions of her investment style, and refused to tell anyone about the specifics of her investment approach, no matter how often they asked.
As she put her model portfolio into place, Esther went about things in a curiously low-key manner. She hardly ever used her Bloomberg terminal, nor the sophisticated charting software on her laptop. She didn’t bother watching the financial news or reading the various financial periodicals, dismissing it as so much “noise.” In fact, she even put together her own spreadsheets. Unlike the other participants in the contest, she did not update the value of her portfolio on a continuous basis, or even daily. From the standpoint of an outside observer, it almost appeared as though she had no interest whatsoever in winning the contest.
Amazingly, as time went on, Esther’s hands-off portfolio management style worked like a charm. As the contest neared its end, her portfolio was ranked above the 95th percentile. In her investment interview with the king, she carried the day with her simple, down-to-earth explanation of her investment philosophy. This proved to be a great relief to the king, who had spent months meeting with a bunch of professional investors who threw enough charts at him to choke a McKinsey consultant. Just the other day, he had half jokingly concluded that the next money manager who showed him a chart overlaying the 50-and 200-day moving average of three currencies, two commodities and four major stock indices on a single chart would promptly be escorted to the royal gallows.
King Ahasueres found himself completely taken by both Esther and her investment style. He chose her as his new Queen and Chief Investment Officer, and arranged a celebrity pro-am golf tournament in her honor, drawing A-listers from every corner of the kingdom.
With Esther now settled into her new position, Morty Kai decided that he needed to get an office near the king’s palace, where he could better monitor Esther’s progress. He rented a small office a couple of blocks away, swallowing hard as he signed a one-year lease at $60/square foot (and that didn’t include utilities!).
One day, shortly after the market closed, as he was getting a coffee from the Starbucks located about a block from the royal palace, Morty Kai overheard two somewhat obscure portfolio managers he knew, XM and Sirius, discussing some inside information they had received. Apparently, one of the region’s largest wine manufacturers was about to report absolutely disastrous earnings, owing to disappointing sales volumes and significant cost overruns at their largest plant. They would also reveal that their pension plan was woefully underfunded, and that they were experiencing difficulty in refinancing their substantial debt load. Without question, this stock would absolutely tank.
Not content with simply shorting the stock in question, and collecting an easy-if-illicit profit, XM and Sirius were going for the really big score. Why short the stock at its current level, if they could generate rumors to drive the stock higher, then short it at those levels, and make an even larger profit when the inevitable crash came? Their plan was rather simple. XM would call up a college fraternity buddy of his, who happened to produce the “Market Rumors” segment on the Empire’s most widely-watched financial news network. During the early afternoon of every trading day, this guy would go on the air, and discuss the latest hot rumor in the marketplace. Without fail, these rumors, bullish or bearish, moved markets up or down, respectively. In addition, Sirius had once worked as a junior analyst at the same firm as a guy who was now one of the king’s biggest portfolio managers. This guy was a real sucker for tips, and would undoubtedly bite on this rumor. With a large portion of the king’s portfolio behind him, Sirius’s former coworker would certainly push the stock higher. Sure, the king would lose millions in the process, but who cared? He had more money than he knew what to do with anyway.
Hearing this plot, Morty Kai knew immediately what he must do. Alert the king, to prevent him from potentially massive losses, and report the two rogue portfolio managers to the authorities. Certainly, Morty Kai could have simply waited a while, and even taken advantage of this inside information. In fact, he was already bearish on the stock of this particular wine manufacturer, based upon his own independent research. However, his actions had always been governed by what was right, not necessarily what was most profitable, and he wasn’t about to change his approach now.
Morty Kai texted Esther about the plot, and she immediately reported it to the king’s compliance department, giving Morty Kai credit for having given her the heads-up. She let the compliance folks report it to the authorities, knowing that the king would be pleased with the positive exposure it would give his administration. He’d now be able to refer to his efforts to clean up the markets. The compliance department investigated the matter, and alerted the regulatory authorities, who banned XM and Sirius from the securities industry for life. The king asked his compliance manager to record the fact that Morty Kai had served as a whistleblower in this case, and that he should eventually be rewarded.
There was a sage, veteran portfolio manager, whose name was Mortimer (“Morty”) Kai, who had been through countless bull and bear markets, had seen numerous asset bubbles inflate and then collapse, who had witnessed the destructive effects of the unencumbered use of leverage. He had a particularly promising trainee by the name of Hadassah (known to her Facebook friends as “Esther”), to whom he was giving over as much as he could of his vast investment knowledge.
Esther had been making something of a name for herself in certain investment circles, having proved adept at deriving profits from the currency markets by using options to construct synthetic baskets of otherwise illiquid currencies.
Still, she was quite new to the managed money game, so it was something of a surprise to her – and to her mentor Morty Kai – when she was asked to join the king’s portfolio manager contest. At first, she protested, fearful that she would only end up making a fool of herself. However, the king’s people made it clear that this was not really an optional invitation. “Besides,” they said almost dismissively, “At least you’ll provide some liquidity.” Her ears still stinging with this most heinous insult, Esther was practically dragged to the designated office building.
Morty Kai was gravely concerned for his protégé’s well-being. He was well aware of the rules of the king’s portfolio contest, and he feared that the short-term nature of the six-month performance assessment period would cause Esther to take undue risks. Sure, Morty Kai could day trade with the best of them, if needed. How could he forget the profits he had made in Consolidated Silk within a couple of frantic hours so many years ago? Still, his experience had taught him that the really big money was made from positions that sometimes took years, not weeks or months, to establish. A six-month contest was nothing more than a spin of the roulette wheel.
Another problem was presented by the king’s insistence that the money managers all describe their investment style, allowing him to lump a bunch of them into one category or the other, such as “growth” “value,” “growth at the right price (GARP),” “momentum,” “contrarian,” and so on. Morty Kai had instructed Esther to avoid this trap, and to resist allowing anyone to boil her investment style down to a single word or phrase. Ever loyal to Morty Kai, Esther in fact resisted these canned descriptions of her investment style, and refused to tell anyone about the specifics of her investment approach, no matter how often they asked.
As she put her model portfolio into place, Esther went about things in a curiously low-key manner. She hardly ever used her Bloomberg terminal, nor the sophisticated charting software on her laptop. She didn’t bother watching the financial news or reading the various financial periodicals, dismissing it as so much “noise.” In fact, she even put together her own spreadsheets. Unlike the other participants in the contest, she did not update the value of her portfolio on a continuous basis, or even daily. From the standpoint of an outside observer, it almost appeared as though she had no interest whatsoever in winning the contest.
Amazingly, as time went on, Esther’s hands-off portfolio management style worked like a charm. As the contest neared its end, her portfolio was ranked above the 95th percentile. In her investment interview with the king, she carried the day with her simple, down-to-earth explanation of her investment philosophy. This proved to be a great relief to the king, who had spent months meeting with a bunch of professional investors who threw enough charts at him to choke a McKinsey consultant. Just the other day, he had half jokingly concluded that the next money manager who showed him a chart overlaying the 50-and 200-day moving average of three currencies, two commodities and four major stock indices on a single chart would promptly be escorted to the royal gallows.
King Ahasueres found himself completely taken by both Esther and her investment style. He chose her as his new Queen and Chief Investment Officer, and arranged a celebrity pro-am golf tournament in her honor, drawing A-listers from every corner of the kingdom.
With Esther now settled into her new position, Morty Kai decided that he needed to get an office near the king’s palace, where he could better monitor Esther’s progress. He rented a small office a couple of blocks away, swallowing hard as he signed a one-year lease at $60/square foot (and that didn’t include utilities!).
One day, shortly after the market closed, as he was getting a coffee from the Starbucks located about a block from the royal palace, Morty Kai overheard two somewhat obscure portfolio managers he knew, XM and Sirius, discussing some inside information they had received. Apparently, one of the region’s largest wine manufacturers was about to report absolutely disastrous earnings, owing to disappointing sales volumes and significant cost overruns at their largest plant. They would also reveal that their pension plan was woefully underfunded, and that they were experiencing difficulty in refinancing their substantial debt load. Without question, this stock would absolutely tank.
Not content with simply shorting the stock in question, and collecting an easy-if-illicit profit, XM and Sirius were going for the really big score. Why short the stock at its current level, if they could generate rumors to drive the stock higher, then short it at those levels, and make an even larger profit when the inevitable crash came? Their plan was rather simple. XM would call up a college fraternity buddy of his, who happened to produce the “Market Rumors” segment on the Empire’s most widely-watched financial news network. During the early afternoon of every trading day, this guy would go on the air, and discuss the latest hot rumor in the marketplace. Without fail, these rumors, bullish or bearish, moved markets up or down, respectively. In addition, Sirius had once worked as a junior analyst at the same firm as a guy who was now one of the king’s biggest portfolio managers. This guy was a real sucker for tips, and would undoubtedly bite on this rumor. With a large portion of the king’s portfolio behind him, Sirius’s former coworker would certainly push the stock higher. Sure, the king would lose millions in the process, but who cared? He had more money than he knew what to do with anyway.
Hearing this plot, Morty Kai knew immediately what he must do. Alert the king, to prevent him from potentially massive losses, and report the two rogue portfolio managers to the authorities. Certainly, Morty Kai could have simply waited a while, and even taken advantage of this inside information. In fact, he was already bearish on the stock of this particular wine manufacturer, based upon his own independent research. However, his actions had always been governed by what was right, not necessarily what was most profitable, and he wasn’t about to change his approach now.
Morty Kai texted Esther about the plot, and she immediately reported it to the king’s compliance department, giving Morty Kai credit for having given her the heads-up. She let the compliance folks report it to the authorities, knowing that the king would be pleased with the positive exposure it would give his administration. He’d now be able to refer to his efforts to clean up the markets. The compliance department investigated the matter, and alerted the regulatory authorities, who banned XM and Sirius from the securities industry for life. The king asked his compliance manager to record the fact that Morty Kai had served as a whistleblower in this case, and that he should eventually be rewarded.
A Purim Tale: Part IV
The Story So Far: We are introduced to veteran fund manager Morty Kai, and his protege Esther, who reluctantly joins the king's investment contest. Despite competing with many money managers with much more developed resumes and reputations, Esther wins the contest, and becomes the new head of the king's Investment Committee. Morty Kai foils an insider trading scandal before it can get off the ground, saving the king a substantial amount of money in the process.
As most major markets continued to trade aimlessly in those months, with trading volumes still well below their long-term averages, a money manager by the name of Haman started to grab some headlines. No one seemed to know how he was doing it, but Haman had delivered consistently high returns for his investors, with performance variability that would make a municipal bond fund manager proud. In a very uncertain market environment, Haman’s various hedge funds were the closest thing you could get to a sure thing. Investors practically tripped over each other in their zeal to invest with Haman, who could raise nearly $5 billion within days of announcing a new fund. Haman also had a flair for marketing, appearing on all of the financial news shows in his trademark three-cornered hat. Flamboyant and successful, Haman soon became a household name, a true investing “rock star.”
Haman became so big that other money managers attempted to imitate him. Countless hedge funds were opened, attempting to mimic Haman’s investing “style” (although no one seemed capable of accurately and completely describing that style). CEOs of asset management firms referred to their companies as “Haman shops,” and their style of investing as “Hamanesque.” It was all getting a bit ridiculous, but Haman was reveling in it.
Of course, not everyone was willing to bow to Haman, and to worship at his altar. Morty Kai, who had seen plenty of hot fund managers suddenly turn cold, then practically disappear from sight, did not buy into the Haman hype. In fact, these two men had something of a shared history. Many years earlier, when they were young portfolio managers, Morty Kai and Haman found themselves on the opposite ends of a major trade. Haman had shorted water futures in a certain municipality, believing that a recent price rise had left the commodity overbought. Morty Kai, on the other hand, sensing that the market was still in the very early stages of what would prove to be a significant, demand-driven price rise, was on the long side of the market. For weeks, the battle raged, as each side continued to add to its position as the market for water futures struggled for direction. Finally, the market broke through its upside resistance, and didn’t pause to catch its breath until it had appreciated another 40%. Morty Kai made an enormous profit, while Haman was caught in a classic short squeeze, decimating his portfolio. The ensuing margin calls made Haman close out his fund, and practically hide from his enraged investors, who, in retrospect, took the position that he had been altogether too reckless with their money. This ushered in the “lean years” for Haman, who was forced to toil in relative obscurity as a junior chemicals industry analyst for a third-tier investment firm. Having been a first-hand witness to Haman’s folly, Morty Kai would forever view Haman as an impulsive and reckless - albeit sometimes lucky - money manager.
Technically, Haman should not have been concerned about Morty Kai’s opinion at this stage of his career, but the lack of respect that Morty Kai displayed towards him just gnawed at him, like when your favorite team loses a close game due to a bad officiating decision. He just couldn’t let it go. Haman was sickened by Morty Kai’s folksy investment style, and all of his blather about things like P/E ratios, operating cash flow, expanding versus contracting margins, balance sheet ratios, blah, blah, blah. Did he really still believe all of that old-fashioned stuff? Hadn’t he heard about the new paradigm? Why, nowadays, an urgent message could travel from one end of the kingdom to the other in less than six months. If you didn’t adjust your methodologies to deal with this rapid pace of information flow, you were toast. The old valuation methodologies just weren’t valid anymore. Morty Kai’s thinking was quaint, and definitely still in favor with the tweed-and-bowtie wearing set, but in the real world? It was simply outdated. “Follow the Cash?” What did that even mean? Morty Kai was a relic. A dinosaur. “Morty Kai = Loser,” Haman tweeted one day. Surely, his 250,000 Twitter followers agreed.
Eventually, Haman realized that he was spending way too much time worrying about Morty Kai’s opinion. It wouldn’t be sufficient to simply trash him in the media. Haman wanted to decimate the various hedge funds under Morty Kai’s control, and put Morty Kai out of business for good. By the time Haman was done with him, Morty Kai would be considered toxic in the investment industry, and would be relegated to serving as a part-time professor at some small-town college, teaching Portfolio Analysis & Theory to a bunch of architecture majors. Haman would find out about Morty Kai’s largest positions, and then simply take the opposite position, doing so in such size that he would eventually move the market decidedly against Morty Kai, leading to a significant drawdown for his funds. For example, if Morty Kai had a significantly large long position in galbanum futures, Haman would short it in even larger volumes, pushing the price down.
Unfortunately for Haman, Morty Kai was a relatively conservative investor, who was practically allergic to leverage, and always highly diversified, with a focus on a low correlation among his major holdings. Taking him down would require some well-executed market manipulation. While Haman was willing and able to carry out such a campaign, Morty Kai had a decent amount of assets under management, and wouldn’t cave easily. To carry out his plan, Haman needed to put a lot more money into play. It would require the type of assets under management (AUM) that only someone like King Ahasueres could provide.
At the time, Haman already had more of the king’s assets under management than did any other money manager. The king was a classic front-runner, always seeking to increase his exposure to the hottest money manager. Haman was already the Flavor of the Month among the custodians of the royal portfolio, as King Ahasueres had already raised his profile above that of all of the other money managers in his employ. Still, this was not enough for Haman. To destroy Morty Kai and “his type,” Haman would need to control all of the king’s liquid assets. (Note that Haman never told people what he meant by “Morty Kai’s type,” perhaps wishing to remain politically correct. He didn’t want to jeopardize his frequent guest appearances on the financial networks, which were good for business. However, perhaps we can assume that Haman wished to eradicate all of the “value” investors).
Winning the king over would be reasonably easy, but would require doing a bit of homework. First, Haman constructed a model Morty Kai portfolio, based largely upon public filings, which indicated the funds’ largest holdings. He filled in the blanks in the mock portfolio by drawing lots and throwing darts at a dartboard. Then, with the help of a quantitatively-inclined intern, Haman performed a Monte Carlo simulation, which showed that Morty Kai’s model portfolio would underperform its benchmarks over the next six months (as indicated above, the king was a big fan of semi-annual performance evaluation) in more than 70% of the simulations. He took his “findings” and incorporated them into a few brightly-colored charts (Haman chuckled as he did this, wondering whether or not Morty Kai even knew how to use PowerPoint), scheduled a meeting with the king, and left his office holding his laptop and a large attaché case.
Haman’s briefcase held the key to obtaining access to the entirety of the king’s assets. The king had always managed his business on a pay-to-play basis, and Haman had brought along 10,000 talents of silver to cement his argument. This was considered a tremendous amount of money in those days. It was enough money to rent a three-bedroom cottage in the Hamptons (with direct beach access!) for two summers, with enough left over for fractional ownership in a private Gulfstream 4 jet for a year.
At the meeting with the king, Haman got right to the point. “Your majesty, I need to alert you to a risk factor, which could lead to the systemic failure of the kingdom’s entire financial ecosystem.” Having thus grabbed the king’s attention, he proceeded with his presentation. “There’s a certain group of money managers out there, scattered throughout the finance industry, whose investment methodologies are different from the mainstream. If allowed to continue, their activities could lead to a market meltdown, which would require significant government intervention, perhaps necessitating the injection of enormous amounts of liquidity from the king’s own treasury.” Haman paused for effect. “Do you mean that my treasury department would be forced to buy the sovereign debt of each of the 127 nations in the kingdom, just to keep interest rates artificially low, thereby propping up asset values?” asked the king. Haman simply nodded, then went in for the kill. “In fact, your Highness, some of these very money managers to whom I’m referring are currently managing significant portions of the king’s own portfolio!” The king was taken aback, and began to panic. “Haman, this is terrible. We must stop them! Is there anything we can do? What do you suggest?” “Well,” Haman answered, “The first thing we can do is to make sure to clean up the roster of the royal portfolio managers. I recommend that from this day forward, management of the king’s entire portfolio be outsourced to my firm, Amalek Capital. We will be solely responsible for settling upon an asset allocation strategy and for choosing the sub-managers.” The king nodded in apparent agreement, so Haman continued. He lifted his heavy attaché case onto the conference room table, and popped it open, revealing its shiny contents. “Of course, I have long subscribed to the king’s position that an effective manager needs to have some ‘skin in the game.’ As you can see, I’m very committed to the notion of mutual value creation.” The king smiled broadly. “Yes, Haman, I can see that your incentive program is properly designed to align the interests of the fund manager with those of his client. Very well done. You are now my sole money manager.”
Having accomplished that part of his plan, Haman now went for the coup de grace. “In addition, your Highness, I’m going to need you to pass a decree, or as we call it, a ‘regulatory directive.’ In order to prevent continued unfettered speculation in the kingdom’s various financial markets, beginning on the 13th day of the month of Adar (allowing for a soft phase-in period for the new regulations), each and every hedge fund in the kingdom will have to be registered with the Persian Exchange Commission, and their entire portfolios will need to be marked-to-market on a daily basis.” The king was all too happy to comply with this request for a royal regulatory directive. After all, it would make it clear to everyone that King Ahasueres was cleaning up the markets, once again making them safe for the little guy. It was time to level the playing field, and shut down the casino. “Haman, that is a brilliant idea. We will put this directive in place right away. In fact, to save time, because you are the driving force behind it anyway, let your firm’s outside counsel draft something, and I’ll just rubber-stamp it. We’ll then e-mail it to every Registered Investment Manager, and follow-up with a hard copy via horse mail in the coming weeks.”
“By the way,” added the king, “Feel free to take back your briefcase. The anticipated excess return on my portfolio, once we’ve removed these troublesome managers, will amount to many multiples of your generous…processing fee.” Haman was pleased. This had been an enormously successful meeting. “Your Highness, what do you say we grab a couple of beers at O’Lunney’s Pub down the block? They have Guiness on tap, and there’s a bartender there who serves it up with a head so thick you can float a gold coin on it.” So the king and Haman went to drink, while for many money managers, the world would never be the same.
As most major markets continued to trade aimlessly in those months, with trading volumes still well below their long-term averages, a money manager by the name of Haman started to grab some headlines. No one seemed to know how he was doing it, but Haman had delivered consistently high returns for his investors, with performance variability that would make a municipal bond fund manager proud. In a very uncertain market environment, Haman’s various hedge funds were the closest thing you could get to a sure thing. Investors practically tripped over each other in their zeal to invest with Haman, who could raise nearly $5 billion within days of announcing a new fund. Haman also had a flair for marketing, appearing on all of the financial news shows in his trademark three-cornered hat. Flamboyant and successful, Haman soon became a household name, a true investing “rock star.”
Haman became so big that other money managers attempted to imitate him. Countless hedge funds were opened, attempting to mimic Haman’s investing “style” (although no one seemed capable of accurately and completely describing that style). CEOs of asset management firms referred to their companies as “Haman shops,” and their style of investing as “Hamanesque.” It was all getting a bit ridiculous, but Haman was reveling in it.
Of course, not everyone was willing to bow to Haman, and to worship at his altar. Morty Kai, who had seen plenty of hot fund managers suddenly turn cold, then practically disappear from sight, did not buy into the Haman hype. In fact, these two men had something of a shared history. Many years earlier, when they were young portfolio managers, Morty Kai and Haman found themselves on the opposite ends of a major trade. Haman had shorted water futures in a certain municipality, believing that a recent price rise had left the commodity overbought. Morty Kai, on the other hand, sensing that the market was still in the very early stages of what would prove to be a significant, demand-driven price rise, was on the long side of the market. For weeks, the battle raged, as each side continued to add to its position as the market for water futures struggled for direction. Finally, the market broke through its upside resistance, and didn’t pause to catch its breath until it had appreciated another 40%. Morty Kai made an enormous profit, while Haman was caught in a classic short squeeze, decimating his portfolio. The ensuing margin calls made Haman close out his fund, and practically hide from his enraged investors, who, in retrospect, took the position that he had been altogether too reckless with their money. This ushered in the “lean years” for Haman, who was forced to toil in relative obscurity as a junior chemicals industry analyst for a third-tier investment firm. Having been a first-hand witness to Haman’s folly, Morty Kai would forever view Haman as an impulsive and reckless - albeit sometimes lucky - money manager.
Technically, Haman should not have been concerned about Morty Kai’s opinion at this stage of his career, but the lack of respect that Morty Kai displayed towards him just gnawed at him, like when your favorite team loses a close game due to a bad officiating decision. He just couldn’t let it go. Haman was sickened by Morty Kai’s folksy investment style, and all of his blather about things like P/E ratios, operating cash flow, expanding versus contracting margins, balance sheet ratios, blah, blah, blah. Did he really still believe all of that old-fashioned stuff? Hadn’t he heard about the new paradigm? Why, nowadays, an urgent message could travel from one end of the kingdom to the other in less than six months. If you didn’t adjust your methodologies to deal with this rapid pace of information flow, you were toast. The old valuation methodologies just weren’t valid anymore. Morty Kai’s thinking was quaint, and definitely still in favor with the tweed-and-bowtie wearing set, but in the real world? It was simply outdated. “Follow the Cash?” What did that even mean? Morty Kai was a relic. A dinosaur. “Morty Kai = Loser,” Haman tweeted one day. Surely, his 250,000 Twitter followers agreed.
Eventually, Haman realized that he was spending way too much time worrying about Morty Kai’s opinion. It wouldn’t be sufficient to simply trash him in the media. Haman wanted to decimate the various hedge funds under Morty Kai’s control, and put Morty Kai out of business for good. By the time Haman was done with him, Morty Kai would be considered toxic in the investment industry, and would be relegated to serving as a part-time professor at some small-town college, teaching Portfolio Analysis & Theory to a bunch of architecture majors. Haman would find out about Morty Kai’s largest positions, and then simply take the opposite position, doing so in such size that he would eventually move the market decidedly against Morty Kai, leading to a significant drawdown for his funds. For example, if Morty Kai had a significantly large long position in galbanum futures, Haman would short it in even larger volumes, pushing the price down.
Unfortunately for Haman, Morty Kai was a relatively conservative investor, who was practically allergic to leverage, and always highly diversified, with a focus on a low correlation among his major holdings. Taking him down would require some well-executed market manipulation. While Haman was willing and able to carry out such a campaign, Morty Kai had a decent amount of assets under management, and wouldn’t cave easily. To carry out his plan, Haman needed to put a lot more money into play. It would require the type of assets under management (AUM) that only someone like King Ahasueres could provide.
At the time, Haman already had more of the king’s assets under management than did any other money manager. The king was a classic front-runner, always seeking to increase his exposure to the hottest money manager. Haman was already the Flavor of the Month among the custodians of the royal portfolio, as King Ahasueres had already raised his profile above that of all of the other money managers in his employ. Still, this was not enough for Haman. To destroy Morty Kai and “his type,” Haman would need to control all of the king’s liquid assets. (Note that Haman never told people what he meant by “Morty Kai’s type,” perhaps wishing to remain politically correct. He didn’t want to jeopardize his frequent guest appearances on the financial networks, which were good for business. However, perhaps we can assume that Haman wished to eradicate all of the “value” investors).
Winning the king over would be reasonably easy, but would require doing a bit of homework. First, Haman constructed a model Morty Kai portfolio, based largely upon public filings, which indicated the funds’ largest holdings. He filled in the blanks in the mock portfolio by drawing lots and throwing darts at a dartboard. Then, with the help of a quantitatively-inclined intern, Haman performed a Monte Carlo simulation, which showed that Morty Kai’s model portfolio would underperform its benchmarks over the next six months (as indicated above, the king was a big fan of semi-annual performance evaluation) in more than 70% of the simulations. He took his “findings” and incorporated them into a few brightly-colored charts (Haman chuckled as he did this, wondering whether or not Morty Kai even knew how to use PowerPoint), scheduled a meeting with the king, and left his office holding his laptop and a large attaché case.
Haman’s briefcase held the key to obtaining access to the entirety of the king’s assets. The king had always managed his business on a pay-to-play basis, and Haman had brought along 10,000 talents of silver to cement his argument. This was considered a tremendous amount of money in those days. It was enough money to rent a three-bedroom cottage in the Hamptons (with direct beach access!) for two summers, with enough left over for fractional ownership in a private Gulfstream 4 jet for a year.
At the meeting with the king, Haman got right to the point. “Your majesty, I need to alert you to a risk factor, which could lead to the systemic failure of the kingdom’s entire financial ecosystem.” Having thus grabbed the king’s attention, he proceeded with his presentation. “There’s a certain group of money managers out there, scattered throughout the finance industry, whose investment methodologies are different from the mainstream. If allowed to continue, their activities could lead to a market meltdown, which would require significant government intervention, perhaps necessitating the injection of enormous amounts of liquidity from the king’s own treasury.” Haman paused for effect. “Do you mean that my treasury department would be forced to buy the sovereign debt of each of the 127 nations in the kingdom, just to keep interest rates artificially low, thereby propping up asset values?” asked the king. Haman simply nodded, then went in for the kill. “In fact, your Highness, some of these very money managers to whom I’m referring are currently managing significant portions of the king’s own portfolio!” The king was taken aback, and began to panic. “Haman, this is terrible. We must stop them! Is there anything we can do? What do you suggest?” “Well,” Haman answered, “The first thing we can do is to make sure to clean up the roster of the royal portfolio managers. I recommend that from this day forward, management of the king’s entire portfolio be outsourced to my firm, Amalek Capital. We will be solely responsible for settling upon an asset allocation strategy and for choosing the sub-managers.” The king nodded in apparent agreement, so Haman continued. He lifted his heavy attaché case onto the conference room table, and popped it open, revealing its shiny contents. “Of course, I have long subscribed to the king’s position that an effective manager needs to have some ‘skin in the game.’ As you can see, I’m very committed to the notion of mutual value creation.” The king smiled broadly. “Yes, Haman, I can see that your incentive program is properly designed to align the interests of the fund manager with those of his client. Very well done. You are now my sole money manager.”
Having accomplished that part of his plan, Haman now went for the coup de grace. “In addition, your Highness, I’m going to need you to pass a decree, or as we call it, a ‘regulatory directive.’ In order to prevent continued unfettered speculation in the kingdom’s various financial markets, beginning on the 13th day of the month of Adar (allowing for a soft phase-in period for the new regulations), each and every hedge fund in the kingdom will have to be registered with the Persian Exchange Commission, and their entire portfolios will need to be marked-to-market on a daily basis.” The king was all too happy to comply with this request for a royal regulatory directive. After all, it would make it clear to everyone that King Ahasueres was cleaning up the markets, once again making them safe for the little guy. It was time to level the playing field, and shut down the casino. “Haman, that is a brilliant idea. We will put this directive in place right away. In fact, to save time, because you are the driving force behind it anyway, let your firm’s outside counsel draft something, and I’ll just rubber-stamp it. We’ll then e-mail it to every Registered Investment Manager, and follow-up with a hard copy via horse mail in the coming weeks.”
“By the way,” added the king, “Feel free to take back your briefcase. The anticipated excess return on my portfolio, once we’ve removed these troublesome managers, will amount to many multiples of your generous…processing fee.” Haman was pleased. This had been an enormously successful meeting. “Your Highness, what do you say we grab a couple of beers at O’Lunney’s Pub down the block? They have Guiness on tap, and there’s a bartender there who serves it up with a head so thick you can float a gold coin on it.” So the king and Haman went to drink, while for many money managers, the world would never be the same.
A Purim Tale: Part V
The Story So Far: A fund manager named Haman becomes the man of the moment in the investment industry. Mordy Kai refuses to give him his due, making Haman determined to destroy Kai and his fellow value investors. Haman meets with the king, becoming the sole money manager for the royal portfolio, and convinces the king to introduce a regulation which was certain to put Kai at a distinct competitive disadvantage.
In his office located just off the trading floor, Morty Kai read the regulatory directive with disbelief. The decision to move to daily marking-to-market for all hedge funds would practically be a death sentence for his funds, and those of so many within his close-knit fraternity of traders and hedge fund managers. Morty Kai’s funds often took “unpopular” positions, seeking to profit from “Black Swans,” events which were deemed highly unlikely, so therefore priced inefficiently low in the marketplace. No one believed that either Hodu or Kush would ever default on their municipal bonds, but if they did, Morty Kai would make a killing on the credit default swaps he had bought. However, until that occurred, his positions typically showed significant losses. By being forced to mark-to-market every day, his funds would show big losses, leading to investor redemption requests, and possibly the loss of his credit lines.
Morty Kai called a large group of his colleagues, whom he believed to be similarly affected by the new ruling, and proposed that they gather at a three-day, off-site conference to discuss possible solutions. As Morty Kai put it in his e-mail invitation, “We will lock ourselves in that conference room for three days, until we figure it out. No one is leaving the room until we have a solution.” The latest versions of Microsoft Excel were distributed to the public.
Morty Kai then contacted Queen Esther and told her of Haman’s evil plan. Having seen a blurb on the Wall Street Journal’s web site about Haman taking over sole responsibility for managing the king’s portfolio, he knew intuitively that Haman was behind this regulatory ruling as well. Morty Kai requested that Esther approach the king, and ask him to reconsider his decision to give Haman authority over the entire royal portfolio. Esther was worried about this. “The king is not interested in hearing unsolicited investment ideas from me. We haven’t even spoken about investments since the last monthly Investment Committee meeting. Why, if I even bring something up about the portfolio’s correlation coefficient, he’s bound to kick me off the Committee altogether. Still, I’ll approach him and do my best. Good luck at your three-day off-site meeting.”
Queen Esther then spent the next three days performing due diligence and investment research. After this period, she approached the king, as he sat in his office, looking at his Bloomberg terminal. Esther approached, and said “Your Majesty, I’d like to discuss the royal portfolio with you.” The king nodded, and said, “Okay, what is it?” “I actually don’t want to discuss it here, during market hours. I’d prefer to invite you and Haman for a round of golf tomorrow at Royal Pines, and we can discuss it as a team.” “Very well,” said the king. “Let’s notify Haman, and I’ll see you on the links.”
The next day, at the golf course, the king was in good spirits. With the exception of having three-putted on the 11th hole for a bogey, he was having an excellent day. “So, Esther,” he said, “What would you like to discuss regarding the royal portfolio? I’m always happy to get a recommendation from you. Mention any idea regarding the investment of up to half my portfolio, and it shall be done.” “Actually, your Majesty,” she answered, “I would like to invite you and Haman for another round of golf tomorrow.”
Haman left the golf course brimming with confidence over his new status with the Queen. He recalled all of the people who had ridiculed him when he was toiling away for 16 hours a day as a trainee at an investment bank, from the egghead quants who had said that he was “more than two standard deviations below the mean,” to those trust fund preppies, with their Paul Stuart blazers and summer homes on the Cape. Where were they now, huh? Surely, they weren’t golfing with the King and Queen…for two days in a row. Life was good, Haman thought.
In his office located just off the trading floor, Morty Kai read the regulatory directive with disbelief. The decision to move to daily marking-to-market for all hedge funds would practically be a death sentence for his funds, and those of so many within his close-knit fraternity of traders and hedge fund managers. Morty Kai’s funds often took “unpopular” positions, seeking to profit from “Black Swans,” events which were deemed highly unlikely, so therefore priced inefficiently low in the marketplace. No one believed that either Hodu or Kush would ever default on their municipal bonds, but if they did, Morty Kai would make a killing on the credit default swaps he had bought. However, until that occurred, his positions typically showed significant losses. By being forced to mark-to-market every day, his funds would show big losses, leading to investor redemption requests, and possibly the loss of his credit lines.
Morty Kai called a large group of his colleagues, whom he believed to be similarly affected by the new ruling, and proposed that they gather at a three-day, off-site conference to discuss possible solutions. As Morty Kai put it in his e-mail invitation, “We will lock ourselves in that conference room for three days, until we figure it out. No one is leaving the room until we have a solution.” The latest versions of Microsoft Excel were distributed to the public.
Morty Kai then contacted Queen Esther and told her of Haman’s evil plan. Having seen a blurb on the Wall Street Journal’s web site about Haman taking over sole responsibility for managing the king’s portfolio, he knew intuitively that Haman was behind this regulatory ruling as well. Morty Kai requested that Esther approach the king, and ask him to reconsider his decision to give Haman authority over the entire royal portfolio. Esther was worried about this. “The king is not interested in hearing unsolicited investment ideas from me. We haven’t even spoken about investments since the last monthly Investment Committee meeting. Why, if I even bring something up about the portfolio’s correlation coefficient, he’s bound to kick me off the Committee altogether. Still, I’ll approach him and do my best. Good luck at your three-day off-site meeting.”
Queen Esther then spent the next three days performing due diligence and investment research. After this period, she approached the king, as he sat in his office, looking at his Bloomberg terminal. Esther approached, and said “Your Majesty, I’d like to discuss the royal portfolio with you.” The king nodded, and said, “Okay, what is it?” “I actually don’t want to discuss it here, during market hours. I’d prefer to invite you and Haman for a round of golf tomorrow at Royal Pines, and we can discuss it as a team.” “Very well,” said the king. “Let’s notify Haman, and I’ll see you on the links.”
The next day, at the golf course, the king was in good spirits. With the exception of having three-putted on the 11th hole for a bogey, he was having an excellent day. “So, Esther,” he said, “What would you like to discuss regarding the royal portfolio? I’m always happy to get a recommendation from you. Mention any idea regarding the investment of up to half my portfolio, and it shall be done.” “Actually, your Majesty,” she answered, “I would like to invite you and Haman for another round of golf tomorrow.”
Haman left the golf course brimming with confidence over his new status with the Queen. He recalled all of the people who had ridiculed him when he was toiling away for 16 hours a day as a trainee at an investment bank, from the egghead quants who had said that he was “more than two standard deviations below the mean,” to those trust fund preppies, with their Paul Stuart blazers and summer homes on the Cape. Where were they now, huh? Surely, they weren’t golfing with the King and Queen…for two days in a row. Life was good, Haman thought.
A Purim Tale: Part VI
The Story So Far: Facing the potential for heavy investment losses, and the possible dissolution of his funds, Morty Kai mobilizes his fellow fund managers, and asks Queen Esther to appeal to the king. She invites the king and Haman to play golf on consecutive days.
That night, the king couldn’t sleep, no matter what he tried. He had taken three Ambiens, the last one more than an hour ago, but to no avail. Resorting to a desperate measure, he asked for the head of the Compliance Department to come to his room, and read all of the entries in the Compliance Log. If that didn’t put him to sleep, nothing would.
The Head of Compliance began to read, until he came upon the entry about Morty Kai the fund manager, who had broken the XM and Sirius insider trading scandal, and reported it to compliance, also saving the king millions of dollars in the process. “Stop right there,” the king ordered. “Have we done anything to reward him for blowing the whistle on these guys?” When told that Morty Kai had not been rewarded for his good deeds, owing to a significant amount of backlog and recent budget cuts in that particular department, the king made a note of the need to recognize Morty Kai for his actions.
At that very moment, Haman appeared at the king’s door. He had decided that rather than wait for the mark-to-market regulations to take effect, he would attempt to put Morty Kai out of business immediately. His plan was to ask the king to order that Morty Kai’s credit lines with his clearing house be canceled, and that the king order that any bank which agreed to give Morty Kai a new credit line would not be given any of the government’s substantial bond underwriting business.
Before Haman could make this suggestion, however, the king asked him. “Haman, if I were to institute a ‘Fund manager of the Year’ award, what would we do to honor the person upon whom we bestowed that title? Hearing this, Haman figured, “’Fund Manager of the Year?’ To whom else could the king be referring but me? No one has generated the returns that I have.”
Haman described the ceremony. “The person who receives this designation shall receive a new wardrobe, consisting of three Oxxford suits, six Brioni ties, two pairs of Ferragamo shoes, and a dozen custom-made shirts from Ascot Chang. For the next year, he shall be able to borrow and wear the watch of his choice from the king’s collection of luxury timepieces (Haman had his eye on a certain diamond-encrusted Franck Muller watch the king owned). He shall be given a ticker-tape parade through the financial district in the king’s Aston Martin convertible, with a well-known fund manager behind the wheel, calling out as he drives, ‘congratulations to the Fund Manager of the Year.’”
The king smiled and said, “Excellent idea. Do exactly as you describe for Morty Kai, the inaugural recipient of the ‘Fund Manager of the Year’ award, for his excellent investment returns and his unshakable ethics. And you’d better not scratch my Aston Martin while you’re driving it, Haman.”
Haman was shocked, and more than a little displeased, but he did what he was told. What choice did he have?
The parade was a disaster for Haman. He was covered with ticker tape, as he watched all the annoying, conservative value investors rejoicing in Morty Kai’s recognition, dancing around with their dog-eared copies of Benjamin Graham’s “Security Analysis” and “The Intelligent Investor.” To make matters worse, he got an urgent call on his Blackberry from the office that one of his traders had entered the wrong ticker symbol on a trade, and the firm had lost several thousand dollars unwinding the trade. Then, a policeman on horseback gave him a ticket for using his cell phone while driving.
When he got back home, his miserable wife, Zeresh, who seemed to live for kicking him whenever he was down, started to give him a hard time. “You think you’re better than Morty Kai? You’ll never generate better long-run investment returns than him. And shorting galbanum futures? Any idiot knows that’s a sucker’s play. You’re about to get squeezed big time, buddy.”
Haman blocked out her shrill rantings, and went to his home office, closing the door behind him. He had another appointment to play golf with the king and queen that afternoon, and if he didn’t get his head straight, there was no way he’s shoot a decent round.
That night, the king couldn’t sleep, no matter what he tried. He had taken three Ambiens, the last one more than an hour ago, but to no avail. Resorting to a desperate measure, he asked for the head of the Compliance Department to come to his room, and read all of the entries in the Compliance Log. If that didn’t put him to sleep, nothing would.
The Head of Compliance began to read, until he came upon the entry about Morty Kai the fund manager, who had broken the XM and Sirius insider trading scandal, and reported it to compliance, also saving the king millions of dollars in the process. “Stop right there,” the king ordered. “Have we done anything to reward him for blowing the whistle on these guys?” When told that Morty Kai had not been rewarded for his good deeds, owing to a significant amount of backlog and recent budget cuts in that particular department, the king made a note of the need to recognize Morty Kai for his actions.
At that very moment, Haman appeared at the king’s door. He had decided that rather than wait for the mark-to-market regulations to take effect, he would attempt to put Morty Kai out of business immediately. His plan was to ask the king to order that Morty Kai’s credit lines with his clearing house be canceled, and that the king order that any bank which agreed to give Morty Kai a new credit line would not be given any of the government’s substantial bond underwriting business.
Before Haman could make this suggestion, however, the king asked him. “Haman, if I were to institute a ‘Fund manager of the Year’ award, what would we do to honor the person upon whom we bestowed that title? Hearing this, Haman figured, “’Fund Manager of the Year?’ To whom else could the king be referring but me? No one has generated the returns that I have.”
Haman described the ceremony. “The person who receives this designation shall receive a new wardrobe, consisting of three Oxxford suits, six Brioni ties, two pairs of Ferragamo shoes, and a dozen custom-made shirts from Ascot Chang. For the next year, he shall be able to borrow and wear the watch of his choice from the king’s collection of luxury timepieces (Haman had his eye on a certain diamond-encrusted Franck Muller watch the king owned). He shall be given a ticker-tape parade through the financial district in the king’s Aston Martin convertible, with a well-known fund manager behind the wheel, calling out as he drives, ‘congratulations to the Fund Manager of the Year.’”
The king smiled and said, “Excellent idea. Do exactly as you describe for Morty Kai, the inaugural recipient of the ‘Fund Manager of the Year’ award, for his excellent investment returns and his unshakable ethics. And you’d better not scratch my Aston Martin while you’re driving it, Haman.”
Haman was shocked, and more than a little displeased, but he did what he was told. What choice did he have?
The parade was a disaster for Haman. He was covered with ticker tape, as he watched all the annoying, conservative value investors rejoicing in Morty Kai’s recognition, dancing around with their dog-eared copies of Benjamin Graham’s “Security Analysis” and “The Intelligent Investor.” To make matters worse, he got an urgent call on his Blackberry from the office that one of his traders had entered the wrong ticker symbol on a trade, and the firm had lost several thousand dollars unwinding the trade. Then, a policeman on horseback gave him a ticket for using his cell phone while driving.
When he got back home, his miserable wife, Zeresh, who seemed to live for kicking him whenever he was down, started to give him a hard time. “You think you’re better than Morty Kai? You’ll never generate better long-run investment returns than him. And shorting galbanum futures? Any idiot knows that’s a sucker’s play. You’re about to get squeezed big time, buddy.”
Haman blocked out her shrill rantings, and went to his home office, closing the door behind him. He had another appointment to play golf with the king and queen that afternoon, and if he didn’t get his head straight, there was no way he’s shoot a decent round.
A Purim Tale: Part VII
The Story So Far: Haman is surprised to learn that his bitter rival, Morty Kai, has been named the inaugural winner of the king's "Fund Manager of the Year" award...and that Haman himself must participate in the award ceremony.
At the golf course that day, on the 13th hole, the king once again asked Esther, “What would you like to discuss about my investments? Any logical recommendation, even one covering up to 50% of my investable assets, and it shall be put in place.”
Esther paused, and then said, “Your highness, I need to warn you about a terrible impending calamity that will befall the markets. There is someone who is attempting to squeeze a certain type of investor out of the marketplace, in the process creating an enormous asset bubble, from which he will profit greatly. At first, everyone will feel good about things, watching the paper value of their portfolios climb inexorably higher. However, once this fund manager’s pump-and-dump scheme has run its course, and he closes out his positions, the markets will crash, and the domino effect will roil all of the kingdom’s markets for the foreseeable future. Investors will lose confidence in the markets, credit will tighten, the increased borrowing costs will put a major damper on overall economic activity, unemployment will soar, and your Treasury will nearly be depleted trying vainly to single-handedly prop up the economy.”
Upon hearing this dire forecast, the king demanded to know, “Who is this person, who seeks to gain personal financial benefit at the expense of the public?”
Esther pointed at Haman and said, “It is him, the evil fund manager Haman!”
As she spoke these words, the king, in his surprise, badly sliced his tee shot, sending the ball deep into a thicket of trees approximately 50 yards to the right of the fairway. He angrily flung his club as far as he could, and stormed off.
Haman knew that he was finished, and that he’d never be able to raise funds in this kingdom again. Still, acting out of desperation, he approached Queen Esther where she sat in the golf cart, and did the only thing he could do…he offered her a job. “How much is he paying you?” Haman asked. “I’ll double it, guarantee your bonus for the first three years, and give you about 3% of the firm’s equity. We’ve already registered for the IPO. The S-1 was filed last week. I’d expect that we’ll go public by the fall, depending on overall market conditions, of course.”
Queen Esther was not swayed. “A publicly traded hedge fund? Is that even possible?” she asked. Haman had just begun to walk her through the highlights of his investment bankers’ pitch book when the king returned. Hearing part of their conversation, he flew into a rage.
“I can’t believe this! Not only are you planning to cause the collapse of the entire financial market superstructure, but you’re trying to hire the Queen away, on my golf course!? Are you kidding me?”
On the spot, the king fired Haman, and demanded that he disgorge all of the trading profits and fees he had earned while managing the king’s money.
At this point, Charvonah, who had been serving as the group’s caddy, mentioned to the king that Haman had also conspired to get the clearing house to cancel Morty Kai’s credit line, thereby effectively shuttering his operation. This, after Morty Kai had blown the whistle on what could have been a major insider trading scandal, averting an enormous financial and public relations disaster for the king.
Hearing this, the king permanently barred Haman from the securities industry, and forbade him from ever holding an officer or director position at any publicly traded company.
After this, Queen Esther formally introduced King Ahasueres to Morty Kai, pointing out that he was her mentor, and the person she would most often consult on investment matters. The king put Morty Kai in charge of his entire portfolio.
Morty Kai and Esther then worked with the king and the regulators to undo the mark-to-market regulation, which was still poised to go into effect. Unfortunately, according to Persian law, repealing such regulation would require a 2/3 majority of the parliament. As there were many within that body who were still loyal to Haman, scores of legislators simply left the kingdom for a “vacation,” so as not to be present for the vote, thereby blocking any legislative action.
Undaunted, Morty Kai and Esther obtained a temporary restraining order from a sympathetic royal judge, thereby putting the mark-to-market regulation on hold indefinitely.
They then requested that Haman’s ten sons, who worked closely with their father at Amalek Capital, and were therefore certainly aware of his evil plans, also be banned permanently from the securities industry. This wish was also granted by the king.
Thus was chaos averted and order restored to the kingdom and its financial markets, and the people rejoiced. The day was forever commemorated with the consumption of food and drink and the sharing of stock tips between each man and his fellow. The resulting improved information flow had the effect of allowing the markets to assimilate all information, both public and non-public, almost immediately, greatly increasing market efficiency. This put the professional arbitrageurs and high-frequency traders out of business, but no one had ever liked them much, anyway.
Morty Kai and Esther then crafted the foregoing story into a best-selling book (receiving a large advance from the publisher). The book, which received almost unanimously favorable reviews, soon became an essential part of business school curricula throughout the kingdom, serving as a cautionary tale for generations of investment professionals.
And Morty Kai the fund manager, assisted by Queen Esther, managed the king’s portfolio for many years to come in a prudent manner, generating positive risk- and inflation-adjusted returns and soundly outperforming his benchmarks.
THE END
At the golf course that day, on the 13th hole, the king once again asked Esther, “What would you like to discuss about my investments? Any logical recommendation, even one covering up to 50% of my investable assets, and it shall be put in place.”
Esther paused, and then said, “Your highness, I need to warn you about a terrible impending calamity that will befall the markets. There is someone who is attempting to squeeze a certain type of investor out of the marketplace, in the process creating an enormous asset bubble, from which he will profit greatly. At first, everyone will feel good about things, watching the paper value of their portfolios climb inexorably higher. However, once this fund manager’s pump-and-dump scheme has run its course, and he closes out his positions, the markets will crash, and the domino effect will roil all of the kingdom’s markets for the foreseeable future. Investors will lose confidence in the markets, credit will tighten, the increased borrowing costs will put a major damper on overall economic activity, unemployment will soar, and your Treasury will nearly be depleted trying vainly to single-handedly prop up the economy.”
Upon hearing this dire forecast, the king demanded to know, “Who is this person, who seeks to gain personal financial benefit at the expense of the public?”
Esther pointed at Haman and said, “It is him, the evil fund manager Haman!”
As she spoke these words, the king, in his surprise, badly sliced his tee shot, sending the ball deep into a thicket of trees approximately 50 yards to the right of the fairway. He angrily flung his club as far as he could, and stormed off.
Haman knew that he was finished, and that he’d never be able to raise funds in this kingdom again. Still, acting out of desperation, he approached Queen Esther where she sat in the golf cart, and did the only thing he could do…he offered her a job. “How much is he paying you?” Haman asked. “I’ll double it, guarantee your bonus for the first three years, and give you about 3% of the firm’s equity. We’ve already registered for the IPO. The S-1 was filed last week. I’d expect that we’ll go public by the fall, depending on overall market conditions, of course.”
Queen Esther was not swayed. “A publicly traded hedge fund? Is that even possible?” she asked. Haman had just begun to walk her through the highlights of his investment bankers’ pitch book when the king returned. Hearing part of their conversation, he flew into a rage.
“I can’t believe this! Not only are you planning to cause the collapse of the entire financial market superstructure, but you’re trying to hire the Queen away, on my golf course!? Are you kidding me?”
On the spot, the king fired Haman, and demanded that he disgorge all of the trading profits and fees he had earned while managing the king’s money.
At this point, Charvonah, who had been serving as the group’s caddy, mentioned to the king that Haman had also conspired to get the clearing house to cancel Morty Kai’s credit line, thereby effectively shuttering his operation. This, after Morty Kai had blown the whistle on what could have been a major insider trading scandal, averting an enormous financial and public relations disaster for the king.
Hearing this, the king permanently barred Haman from the securities industry, and forbade him from ever holding an officer or director position at any publicly traded company.
After this, Queen Esther formally introduced King Ahasueres to Morty Kai, pointing out that he was her mentor, and the person she would most often consult on investment matters. The king put Morty Kai in charge of his entire portfolio.
Morty Kai and Esther then worked with the king and the regulators to undo the mark-to-market regulation, which was still poised to go into effect. Unfortunately, according to Persian law, repealing such regulation would require a 2/3 majority of the parliament. As there were many within that body who were still loyal to Haman, scores of legislators simply left the kingdom for a “vacation,” so as not to be present for the vote, thereby blocking any legislative action.
Undaunted, Morty Kai and Esther obtained a temporary restraining order from a sympathetic royal judge, thereby putting the mark-to-market regulation on hold indefinitely.
They then requested that Haman’s ten sons, who worked closely with their father at Amalek Capital, and were therefore certainly aware of his evil plans, also be banned permanently from the securities industry. This wish was also granted by the king.
Thus was chaos averted and order restored to the kingdom and its financial markets, and the people rejoiced. The day was forever commemorated with the consumption of food and drink and the sharing of stock tips between each man and his fellow. The resulting improved information flow had the effect of allowing the markets to assimilate all information, both public and non-public, almost immediately, greatly increasing market efficiency. This put the professional arbitrageurs and high-frequency traders out of business, but no one had ever liked them much, anyway.
Morty Kai and Esther then crafted the foregoing story into a best-selling book (receiving a large advance from the publisher). The book, which received almost unanimously favorable reviews, soon became an essential part of business school curricula throughout the kingdom, serving as a cautionary tale for generations of investment professionals.
And Morty Kai the fund manager, assisted by Queen Esther, managed the king’s portfolio for many years to come in a prudent manner, generating positive risk- and inflation-adjusted returns and soundly outperforming his benchmarks.
THE END
Water, Water Everywhere...
...including the basement floor.
We check the basement every so often when there is heavy rain, even though we've never had a problem. We did construction a few years ago so the crazy half of the MBB/FBB couple has always felt it necessary to check the basement more regularly since then.
Usually I send one of the kids down and tell them to take off their shoes and run their foot along the perimeter of the room so they can feel if anything has seeped in.
Thursday night I asked MBB if we should check, and he said yes, but we got busy cleaning up the kitchen (yes, I know that's the funniest thing written on this blog in a long time), and forgot about checking and went to sleep.
The next morning I asked one of the kids to go downstairs and check. She came up and said:
"Uh, we have a big problem, and I don't need to take off my shoe to see it!"
There was about an inch of water in one of the basement bedrooms, the puddle pooling between the beds. It could have been worse. I heard of a few people who had upwards of four inches in their basements. Good thing we forgot to check the night before, had we known sooner, I doubt there was anything we could have done about it at 11:30 at night except worry (one of us, anyway)
Instead when I found out, I did what any good American does when faced with water in the basement. I called my homeowners insurance company. I don't know if they cover the "extraction and remediation"( a really fancy way of saying "sucking out all the water and spraying anti-microbial solution"), but I figured I'd get them involved first and let them tell me what to do.
Since the rains had been so prolific, and there had been so much melting snow, the cleaning companies were,pardon the pun, deluged with work. No one could come until Saturday, so it was going to be Sunday. In a way I was glad, (once they told me waiting seventy two hours would be no problem), because then we would know if more was coming in. MBB opted to spend two hours getting rid of the water we could see pooling atop the carpet (we have a wet-dry vac), then ran a dehumidifier and turned on the ceiling fans.
They came Sunday, checked the walls for water (anyone know a sheetrock guy?), got rid of the rest of the water IN the carpet, and left us with dehumidifiers and fans. Thanks to my sister's flood issue many moons ago we did not use padding when we put down the basement carpet, it's glued right to the cement. It's a little hard if you sit on it, but the kids don't seem to mind, and it saved us from needing to rip up the carpet.
I'm waiting to hear if we're actually covered, and figure out if this was a fluke thing, or if I need to re-waterproof the outside walls. One guy seem to think it was because the water was SO high, a lot of people who never had problems were having problems.
I'm not sure that this doesn't fall in the "They don't make things like they used to category," - this room is only four and half years old.
We check the basement every so often when there is heavy rain, even though we've never had a problem. We did construction a few years ago so the crazy half of the MBB/FBB couple has always felt it necessary to check the basement more regularly since then.
Usually I send one of the kids down and tell them to take off their shoes and run their foot along the perimeter of the room so they can feel if anything has seeped in.
Thursday night I asked MBB if we should check, and he said yes, but we got busy cleaning up the kitchen (yes, I know that's the funniest thing written on this blog in a long time), and forgot about checking and went to sleep.
The next morning I asked one of the kids to go downstairs and check. She came up and said:
"Uh, we have a big problem, and I don't need to take off my shoe to see it!"
There was about an inch of water in one of the basement bedrooms, the puddle pooling between the beds. It could have been worse. I heard of a few people who had upwards of four inches in their basements. Good thing we forgot to check the night before, had we known sooner, I doubt there was anything we could have done about it at 11:30 at night except worry (one of us, anyway)
Instead when I found out, I did what any good American does when faced with water in the basement. I called my homeowners insurance company. I don't know if they cover the "extraction and remediation"( a really fancy way of saying "sucking out all the water and spraying anti-microbial solution"), but I figured I'd get them involved first and let them tell me what to do.
Since the rains had been so prolific, and there had been so much melting snow, the cleaning companies were,pardon the pun, deluged with work. No one could come until Saturday, so it was going to be Sunday. In a way I was glad, (once they told me waiting seventy two hours would be no problem), because then we would know if more was coming in. MBB opted to spend two hours getting rid of the water we could see pooling atop the carpet (we have a wet-dry vac), then ran a dehumidifier and turned on the ceiling fans.
They came Sunday, checked the walls for water (anyone know a sheetrock guy?), got rid of the rest of the water IN the carpet, and left us with dehumidifiers and fans. Thanks to my sister's flood issue many moons ago we did not use padding when we put down the basement carpet, it's glued right to the cement. It's a little hard if you sit on it, but the kids don't seem to mind, and it saved us from needing to rip up the carpet.
I'm waiting to hear if we're actually covered, and figure out if this was a fluke thing, or if I need to re-waterproof the outside walls. One guy seem to think it was because the water was SO high, a lot of people who never had problems were having problems.
I'm not sure that this doesn't fall in the "They don't make things like they used to category," - this room is only four and half years old.
Monday, March 7, 2011
Pearls of Wisdom?
My dear darling laundry room sleeping seven year old, has become funnier and funnier.
Apparently she is pro-choice:
"Why do you care when I go to bed? It's not YOUR body!"
Her nose is quite small, basically she has no bridge, just a small little bump at the bottom with nostrils:
"When the Malach touched me here {pointing to the indentation above her lip}...he SMASHED my nose!"
I was feeding the baby, and I asked her to get something from downstairs. She said she couldn't, so I said I would. She asked if I would go "like that," (i.e., feeding the baby). I gave a non-committal eyebrow raise. A minute later:
"If there was a book about feeding your baby, I think it would say 'DO NOT FEED YOUR BABY WHILE WALKING DOWN THE STEPS.'"
Apparently she is pro-choice:
"Why do you care when I go to bed? It's not YOUR body!"
Her nose is quite small, basically she has no bridge, just a small little bump at the bottom with nostrils:
"When the Malach touched me here {pointing to the indentation above her lip}...he SMASHED my nose!"
I was feeding the baby, and I asked her to get something from downstairs. She said she couldn't, so I said I would. She asked if I would go "like that," (i.e., feeding the baby). I gave a non-committal eyebrow raise. A minute later:
"If there was a book about feeding your baby, I think it would say 'DO NOT FEED YOUR BABY WHILE WALKING DOWN THE STEPS.'"
Thursday, March 3, 2011
What is THAT?????
I took one of the girls, a young teenager (13), to the pediatrician. Calamity Jane, as she is lovingly referred to in Chez Blogberg, had just been to the doctor for her "bronchial spasms," as she so heartily reminded us. Time and Time and Time again.
Now, she was nebulizing twice a day to help her with expectoration, but she had AWFUL ear pain, and her face hurt. I diagnosed a possible ear infection, which I usually opt not to treat with antibiotics if the pain is remedied with ibuprofen. I also diagnosed a possible sinus infection, based on where her face hurt if it was touched.
She had a little fluid in her ears, but she had a sinus infection. The doctor pulled out his phone, and was ready to send her medication information directly to the pharmacy, when he turned and asked "liquid or pills?
Quite confidently, and more than a little proud of herself she replied "PILLS!"
I don't think she was expecting this:
I'm not exactly sure who they think is taking these pills (the advil is in the picture for comparative purposes), but my first thought was some sort of supplement or medication for a very large four legged mammal -most likely tusked.
Right now she's rinsing her sinuses with some sinus wash, and getting ready to down her oversized caplet.
She's in her glory!
Now, she was nebulizing twice a day to help her with expectoration, but she had AWFUL ear pain, and her face hurt. I diagnosed a possible ear infection, which I usually opt not to treat with antibiotics if the pain is remedied with ibuprofen. I also diagnosed a possible sinus infection, based on where her face hurt if it was touched.
She had a little fluid in her ears, but she had a sinus infection. The doctor pulled out his phone, and was ready to send her medication information directly to the pharmacy, when he turned and asked "liquid or pills?
Quite confidently, and more than a little proud of herself she replied "PILLS!"
I don't think she was expecting this:
I'm not exactly sure who they think is taking these pills (the advil is in the picture for comparative purposes), but my first thought was some sort of supplement or medication for a very large four legged mammal -most likely tusked.
Right now she's rinsing her sinuses with some sinus wash, and getting ready to down her oversized caplet.
She's in her glory!
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