STREET DOGS
It’s high time for a cross-border European banking merger
Larry Hite comments on a traumatic experience caused by a failure to heed market risk: If you don’t take a hard look at risk, it will take you. When I got my first motorcycle, I had an older friend who said to me: "Larry, when you are on a motorcycle, never argue with a car. You will lose." The same thing applies to trading: if you argue with the market, you will lose. I have a good friend who started from very humble beginnings; his father was a sanitation man. Anyway, he is a very bright guy and he got into option arbitrage. He was extremely good at it and made a fortune. I remember visiting him at a palatial estate he bought in England. Well, he may have been a great arbitrageur, but he turned out to be a bad trader. He developed a trading system that made money. One day he said to me: "I am not taking the sell signal in gold; it doesn’t look right to me. Besides, almost 50% of the signals are wrong anyway." Not only didn’t he take the sell signal, he actually wound up going long...
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