I realized that numbers don’t lie when I encountered a young woman at the exchange who worked as a guide in the gallery showing groups around and explaining the workings of the CME. Kristine Martino would lead a group of foreign visitors and speak to them in their own language. As someone
who was taught rudimentary Armenian at an early age, I’ve always been fascinated with anyone who could speak several languages. Kristine had the ability to carry on a series of conversations in various languages with- out missing a beat, and many visitors even told her that her accent and pronunciation were perfect.
It became a habit of mine to wander up to the visitors’ gallery before my shots to chat with Kristine. Occasionally she would ask me to speak to a group of visitors or answer questions that were a bit more detailed than she was prepared to answer. She was, after all, trained in languages, not in trading. I would listen to her translate the conversation and was never quite sure whether the meaning of my comments was being expressed precisely, but when it comes to market prices, the language is universal. The language in which you receive information on the markets doesn’t matter—numbers don’t lie! The story itself might have lost something in the translation, but the numbers that we were all looking at were understood by everyone. For example, I’ve met officials from the Central Bank of Armenia and found that I could not understand a word they were saying. Their Eastern Armenian dialect was so strong that I asked them to speak English. But through all the misinterpretations of conversation there stood the truth of the numbers.
One of the interesting things that has happened over the course of the technological revolution concerns the way people look for information. It used to be that traders or investors could not be islands unto themselves and hope to find success in the financial markets—on the contrary, the most important thing any trader could have was a network of people. Humans were the information pipeline that allowed traders to get an edge. Today the situation is much different. Traders can lock themselves in a room and isolate their trading from other people and find that it’s still possible to turn a profit. The human factor has evolved into a technological variable. Now it’s a question of knowing where to look in cyberspace for the needed infor- mation, as opposed to knowing the right person for the right information.
But one thing remains constant: Good information must be kept a well- guarded secret. Having worked with the Japanese at Nikko, the French at Credit Agricole, and the Germans at Commerzbank, I came to understand that information is a precious commodity. The Japanese would fly traders into the United States so that they could spend days with us to pick our brains and get a better understanding of our capital market structure. It was astounding how they would ship people around like clockwork every three years from Japan in order to give as many employees as possible the needed experience in the U.S. markets.
One reason for this, as I found out years later, was that many of the Japanese workers who came to this country ended up staying here and renouncing their Japanese citizenship. It had gotten to the point that the ex- ecutives began to fear a flight epidemic among Japanese nationals working
in America. The solution for the futures group was to maintain a cultural barrier between U.S. personnel and our Japanese coworkers. Regardless of this attempt to keep us separate, I went to extremes to acquire the trust of my Japanese colleagues. Emulating them, I worked long hours, went out drinking with them, and most important, I took them to play golf! This kept me in the loop as far as any vital market information was concerned, and I still have contact with many former colleagues who are now living back in Japan.
As I look back on the various institutions that I have worked with, I find that they were all very different in their approaches to garnering market in- formation. The Japanese were meticulous in the way they researched every aspect of the capital markets universe. In fact, my Japanese friends had a very annoying habit of asking the same question in several different ways, drilling for a new take on a given subject. Their style was intensely interroga- tive, and they usually ended up getting the information they wanted. Anyone who works with the French, however, realizes that when it comes to the fi- nancial services industry, the French know it all. In fact, during a managerial meeting, I asked whether I should throw out every book in the office that had been written on the markets. When they asked me why, I responded, “Because you guys obviously know it all!” The stereotype of French arro- gance aside, culturally they understood the need for proper information dissemination, and they, like the Japanese, found what they needed most of the time. Both the Japanese and the French digested the changing land- scape around them and adjusted accordingly. They both started managed futures divisions, which kept the profitability of the futures FCMs intact for years.
The Germans were a completely different story. The overbanked and entrenched middle bureaucracy of the German system made the process much more cumbersome. I came to the conclusion that they just did not get it! The German philosophy was to maintain a presence without a plan. I found it absolutely extraordinary that a country that produces some of the finest and most efficient exports is lost when it comes to understand- ing the nature of the marketplace. Much of that might be cultural. The entrenched German hierarchy makes individualism a problem. Unlike the Japanese, who stress the collective in place of the individual, the German management philosophy is more dictatorial. Many of the German banking institutions have floundered, however, making way for a wave of modern German portfolio managers who are revolutionizing the investing landscape of the entire country.
As far as I’m concerned, there are only a few places I trust for good information. Having come of age in the 1960s and 1970s, I am a TV addict. Maybe that’s why I find it so easy to go on TV and voice an opinion or break down an economic report. Television is where I get the bulk of my
information. Between Bloomberg and CNBC, there isn’t much left to cover. If I don’t know what is happening abroad, all I need to do is turn on cable TV and find the Bloomberg or CNBC feed from Europe or Asia. Sometimes I’ll be watching the Asian market report and see myself talking on tape about the U.S. markets earlier that day, and I reflect on the fact that people are basing market opinions on the information I provide. At a certain point I feel that I have a fiduciary responsibility to the audience of any show to give them accurate and useful information. Business TV has become so much better over the last decade that it has moved from being pure after-the-fact analysis to being an intricate part of every trader’s day. Traders risk capital because of the comments made or not made by someone on one of the broadcasts.