Jim Cramer gets Pounded by John Stewart on the Daily Show

[Anonymous]

[quote=kewp][quote=davelj] Inside information is probably the most overrated “advantage” in the financial markets. [/quote]
[…]

However, I suspect what you are discussing is the fact that much ‘inside’ information is actually bogus. Which may be true, but I wouldn’t exactly consider it ‘inside’ then.[/quote]

Inside information is one of the only advantages in the financial markets. But like kewp said, it has to to be legit, and that is a rare thing.

There are a handful of other possible advantages: special relationships that can lower transaction costs, or a monopoly like some market-makers or NYSE specialists have. And none of these are available to anyone but the big-boys.

[davelj]

[quote=Allan from Fallbrook]Dave: Ah, yes, but then what do you say about someone like Frank Quattrone (CSFB’s Tech Group)?

Being a “Friend Of Frank” in the dot.com runup certainly had it’s advantages, didn’t it?[/quote]

I never had a problem with Frank Quattrone’s shenanigans. He and CSFB played favorites among their customers and offered preferential IPO access to their largest, most profitable clients. This never bothered me. (And, to be clear, I’ve never participated in a “hot” IPO or had an account with CSFB.)

Again, personally, not a problem to me. But, in the eyes of the public – the “level playing field” issue – it looks bad. So I understand why we have laws against that sort of thing. I realize that it’s in our national interest to have the public feel that our financial markets aren’t rigged.

[davelj]

[quote=Allan from Fallbrook]Dave: Ah, yes, but then what do you say about someone like Frank Quattrone (CSFB’s Tech Group)?

Being a “Friend Of Frank” in the dot.com runup certainly had it’s advantages, didn’t it?[/quote]

I never had a problem with Frank Quattrone’s shenanigans. He and CSFB played favorites among their customers and offered preferential IPO access to their largest, most profitable clients. This never bothered me. (And, to be clear, I’ve never participated in a “hot” IPO or had an account with CSFB.)

Again, personally, not a problem to me. But, in the eyes of the public – the “level playing field” issue – it looks bad. So I understand why we have laws against that sort of thing. I realize that it’s in our national interest to have the public feel that our financial markets aren’t rigged.

[davelj]

[quote=Allan from Fallbrook]Dave: Ah, yes, but then what do you say about someone like Frank Quattrone (CSFB’s Tech Group)?

Being a “Friend Of Frank” in the dot.com runup certainly had it’s advantages, didn’t it?[/quote]

I never had a problem with Frank Quattrone’s shenanigans. He and CSFB played favorites among their customers and offered preferential IPO access to their largest, most profitable clients. This never bothered me. (And, to be clear, I’ve never participated in a “hot” IPO or had an account with CSFB.)

Again, personally, not a problem to me. But, in the eyes of the public – the “level playing field” issue – it looks bad. So I understand why we have laws against that sort of thing. I realize that it’s in our national interest to have the public feel that our financial markets aren’t rigged.

[davelj]

[quote=Allan from Fallbrook]Dave: Ah, yes, but then what do you say about someone like Frank Quattrone (CSFB’s Tech Group)?

Being a “Friend Of Frank” in the dot.com runup certainly had it’s advantages, didn’t it?[/quote]

I never had a problem with Frank Quattrone’s shenanigans. He and CSFB played favorites among their customers and offered preferential IPO access to their largest, most profitable clients. This never bothered me. (And, to be clear, I’ve never participated in a “hot” IPO or had an account with CSFB.)

Again, personally, not a problem to me. But, in the eyes of the public – the “level playing field” issue – it looks bad. So I understand why we have laws against that sort of thing. I realize that it’s in our national interest to have the public feel that our financial markets aren’t rigged.

[davelj]

[quote=Allan from Fallbrook]Dave: Ah, yes, but then what do you say about someone like Frank Quattrone (CSFB’s Tech Group)?

Being a “Friend Of Frank” in the dot.com runup certainly had it’s advantages, didn’t it?[/quote]

I never had a problem with Frank Quattrone’s shenanigans. He and CSFB played favorites among their customers and offered preferential IPO access to their largest, most profitable clients. This never bothered me. (And, to be clear, I’ve never participated in a “hot” IPO or had an account with CSFB.)

Again, personally, not a problem to me. But, in the eyes of the public – the “level playing field” issue – it looks bad. So I understand why we have laws against that sort of thing. I realize that it’s in our national interest to have the public feel that our financial markets aren’t rigged.

[davelj]

[quote=kewp][quote=davelj] Inside information is probably the most overrated “advantage” in the financial markets. [/quote]

You should read “Fortune’s Formula”.

If can glean even a slight edge, via inside information, you can generate phenomenal returns.

However, I suspect what you are discussing is the fact that much ‘inside’ information is actually bogus. Which may be true, but I wouldn’t exactly consider it ‘inside’ then.[/quote]

What I’m saying is that most inside information – at least where M&A is concerned – turns out to be wrong (I wouldn’t use the word “bogus”) in the end. Deals are cooked up, rumors start circulating, stock starts moving up and two days before the definitive agreement is signed… oops… one party gets cold feet and the whole thing is off. And there are too many people in on the trade and it blows up. Happens all the time. I was in the middle of plenty of them (albeit on the small side) back when I used to be an investment banker.

It’s still inside information – both “material” and “non-public” – but it turns out to do far more harm than good to those trading on it.

Even today I’m privy to a fair amount of inside information regarding M&A. Even if I were so inclined – which I’m not – I still wouldn’t trade on this information because too many of these deals never get consummated. Things change at the last minute too often for a lot of inside information to be tradeable.

[davelj]

[quote=kewp][quote=davelj] Inside information is probably the most overrated “advantage” in the financial markets. [/quote]

You should read “Fortune’s Formula”.

If can glean even a slight edge, via inside information, you can generate phenomenal returns.

However, I suspect what you are discussing is the fact that much ‘inside’ information is actually bogus. Which may be true, but I wouldn’t exactly consider it ‘inside’ then.[/quote]

What I’m saying is that most inside information – at least where M&A is concerned – turns out to be wrong (I wouldn’t use the word “bogus”) in the end. Deals are cooked up, rumors start circulating, stock starts moving up and two days before the definitive agreement is signed… oops… one party gets cold feet and the whole thing is off. And there are too many people in on the trade and it blows up. Happens all the time. I was in the middle of plenty of them (albeit on the small side) back when I used to be an investment banker.

It’s still inside information – both “material” and “non-public” – but it turns out to do far more harm than good to those trading on it.

Even today I’m privy to a fair amount of inside information regarding M&A. Even if I were so inclined – which I’m not – I still wouldn’t trade on this information because too many of these deals never get consummated. Things change at the last minute too often for a lot of inside information to be tradeable.

[davelj]

[quote=kewp][quote=davelj] Inside information is probably the most overrated “advantage” in the financial markets. [/quote]

You should read “Fortune’s Formula”.

If can glean even a slight edge, via inside information, you can generate phenomenal returns.

However, I suspect what you are discussing is the fact that much ‘inside’ information is actually bogus. Which may be true, but I wouldn’t exactly consider it ‘inside’ then.[/quote]

What I’m saying is that most inside information – at least where M&A is concerned – turns out to be wrong (I wouldn’t use the word “bogus”) in the end. Deals are cooked up, rumors start circulating, stock starts moving up and two days before the definitive agreement is signed… oops… one party gets cold feet and the whole thing is off. And there are too many people in on the trade and it blows up. Happens all the time. I was in the middle of plenty of them (albeit on the small side) back when I used to be an investment banker.

It’s still inside information – both “material” and “non-public” – but it turns out to do far more harm than good to those trading on it.

Even today I’m privy to a fair amount of inside information regarding M&A. Even if I were so inclined – which I’m not – I still wouldn’t trade on this information because too many of these deals never get consummated. Things change at the last minute too often for a lot of inside information to be tradeable.

[davelj]

[quote=kewp][quote=davelj] Inside information is probably the most overrated “advantage” in the financial markets. [/quote]

You should read “Fortune’s Formula”.

If can glean even a slight edge, via inside information, you can generate phenomenal returns.

However, I suspect what you are discussing is the fact that much ‘inside’ information is actually bogus. Which may be true, but I wouldn’t exactly consider it ‘inside’ then.[/quote]

What I’m saying is that most inside information – at least where M&A is concerned – turns out to be wrong (I wouldn’t use the word “bogus”) in the end. Deals are cooked up, rumors start circulating, stock starts moving up and two days before the definitive agreement is signed… oops… one party gets cold feet and the whole thing is off. And there are too many people in on the trade and it blows up. Happens all the time. I was in the middle of plenty of them (albeit on the small side) back when I used to be an investment banker.

It’s still inside information – both “material” and “non-public” – but it turns out to do far more harm than good to those trading on it.

Even today I’m privy to a fair amount of inside information regarding M&A. Even if I were so inclined – which I’m not – I still wouldn’t trade on this information because too many of these deals never get consummated. Things change at the last minute too often for a lot of inside information to be tradeable.

[davelj]

[quote=kewp][quote=davelj] Inside information is probably the most overrated “advantage” in the financial markets. [/quote]

You should read “Fortune’s Formula”.

If can glean even a slight edge, via inside information, you can generate phenomenal returns.

However, I suspect what you are discussing is the fact that much ‘inside’ information is actually bogus. Which may be true, but I wouldn’t exactly consider it ‘inside’ then.[/quote]

What I’m saying is that most inside information – at least where M&A is concerned – turns out to be wrong (I wouldn’t use the word “bogus”) in the end. Deals are cooked up, rumors start circulating, stock starts moving up and two days before the definitive agreement is signed… oops… one party gets cold feet and the whole thing is off. And there are too many people in on the trade and it blows up. Happens all the time. I was in the middle of plenty of them (albeit on the small side) back when I used to be an investment banker.

It’s still inside information – both “material” and “non-public” – but it turns out to do far more harm than good to those trading on it.

Even today I’m privy to a fair amount of inside information regarding M&A. Even if I were so inclined – which I’m not – I still wouldn’t trade on this information because too many of these deals never get consummated. Things change at the last minute too often for a lot of inside information to be tradeable.

[Allan from Fallbrook]

Dave: The next question becomes: How much of an impact did someone like Frank Quattrone have in the dot.com era? How many deals for companies like Kozmo.com, Pets.com and eToys should have never taken place, but did because they were pumped by someone like Quattrone? Someone who wasn’t paying attention to the fundamentals, and told everyone listening that this was the “new economy, stupid” and all of the old rules no longer applied? Someone who either did know better or should have, someone who should have paid far better attention to the business plans (or lack thereof), the financials and how the money was being spent.

How close are those slogans to “it’s different this time”, and “they’re not making anymore land” and “real estate never declines in value”?

It’s all the same boondoggle, just with different players and in a different market. Yeah, you can blame Greenspan for both and justifiably so, but much of the blame goes to the Quattrones, and the Mozillos and all of the traders, brokers and shills who were just in it for the short-term profit.

[Allan from Fallbrook]

Dave: The next question becomes: How much of an impact did someone like Frank Quattrone have in the dot.com era? How many deals for companies like Kozmo.com, Pets.com and eToys should have never taken place, but did because they were pumped by someone like Quattrone? Someone who wasn’t paying attention to the fundamentals, and told everyone listening that this was the “new economy, stupid” and all of the old rules no longer applied? Someone who either did know better or should have, someone who should have paid far better attention to the business plans (or lack thereof), the financials and how the money was being spent.

How close are those slogans to “it’s different this time”, and “they’re not making anymore land” and “real estate never declines in value”?

It’s all the same boondoggle, just with different players and in a different market. Yeah, you can blame Greenspan for both and justifiably so, but much of the blame goes to the Quattrones, and the Mozillos and all of the traders, brokers and shills who were just in it for the short-term profit.

[Allan from Fallbrook]

Dave: The next question becomes: How much of an impact did someone like Frank Quattrone have in the dot.com era? How many deals for companies like Kozmo.com, Pets.com and eToys should have never taken place, but did because they were pumped by someone like Quattrone? Someone who wasn’t paying attention to the fundamentals, and told everyone listening that this was the “new economy, stupid” and all of the old rules no longer applied? Someone who either did know better or should have, someone who should have paid far better attention to the business plans (or lack thereof), the financials and how the money was being spent.

How close are those slogans to “it’s different this time”, and “they’re not making anymore land” and “real estate never declines in value”?

It’s all the same boondoggle, just with different players and in a different market. Yeah, you can blame Greenspan for both and justifiably so, but much of the blame goes to the Quattrones, and the Mozillos and all of the traders, brokers and shills who were just in it for the short-term profit.

[Allan from Fallbrook]

Dave: The next question becomes: How much of an impact did someone like Frank Quattrone have in the dot.com era? How many deals for companies like Kozmo.com, Pets.com and eToys should have never taken place, but did because they were pumped by someone like Quattrone? Someone who wasn’t paying attention to the fundamentals, and told everyone listening that this was the “new economy, stupid” and all of the old rules no longer applied? Someone who either did know better or should have, someone who should have paid far better attention to the business plans (or lack thereof), the financials and how the money was being spent.

How close are those slogans to “it’s different this time”, and “they’re not making anymore land” and “real estate never declines in value”?

It’s all the same boondoggle, just with different players and in a different market. Yeah, you can blame Greenspan for both and justifiably so, but much of the blame goes to the Quattrones, and the Mozillos and all of the traders, brokers and shills who were just in it for the short-term profit.

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