Quotes Entirely Relevant to Investing 01-27-2008

by Mr Juggles

It’s a zero-sum game. If you put trades on that worked so well that you bankrupt your counterparty, you will not collect on those trades.
-Jim Keegan, a senior vice president and portfolio manager at American Century Investments (from Calculated Risk)

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  1. Coop
    January 28th, 2008 | 10:14 am

    A zero-sum game usually refers to a situation in which one person has to lose for another to gain, in equal proportion. I think what this guy is describing is actually worse than a zero sum game… one guy loses, and then the other guy loses…

  2. January 28th, 2008 | 3:29 pm

    What’s the opposite of concur? Incur? Occur? Scurvy? Anyway, that’s what I do.

    The dude accurately describes zero-sum; one guy can keep winning only so long as the other guy has something left to lose.

    “Freedom’s just another word for the end of a zero-sum game.” -Janis Joplin

  3. coop
    January 30th, 2008 | 12:39 am

    I agree that what you wrote describes what the guy said, but that is not what defines a zero-sum game. The term literally means that the sum of the payouts in a situation equals zero; if one person puts on trades that bankrupt their counterparty, the game is no longer zero sum. One party goes bankrupt, and the other party also does not gain. The sum is negative, not zero. See what I did there? that’s called domination.

  4. January 30th, 2008 | 3:07 am

    See what you did there? That’s called misinterpretation.

    It’s not the case that one guy goes bankrupt and the other gets nothing. A party may collect on trades up to the point that his counterparty goes bankrupt. Beyond that point, he can no longer gain, and the other guy can no longer lose. Any trades exceeding the loser’s ability to pay are nullified.

    In your fantasy world, money magically disappears. In mine, it’s Margaret Brennan doing the domination.

  5. Ronnie M. Honduras
    January 30th, 2008 | 9:51 am

    All this talk of domination… I’m cutting out early for lunch so I can pwn a corn beef on rye w/swiss. Some spicy brown… A phat pickle. Booya!

  6. To The Hilt
    January 30th, 2008 | 10:01 am

    Now, do you see what ronnie did there?

    That’s called a divide-by-zero-sum game, because it just doesn’t make any sense.

    Johnnie Cochran would be proud.

  7. Aspiring Mini-Baller
    January 30th, 2008 | 12:24 pm

    We need a new entry… how about something about Jérome Kerviel — mini-baller or non-mini-baller?

  8. HAM'05
    January 30th, 2008 | 12:49 pm

    homeboy lost ‘billions’ with a B – thats not even straight up baller – hes a megaballer. perhaps even a superballer.

    you see what i did there

  9. Aspiring Mini-Baller
    January 30th, 2008 | 1:11 pm

    We have to take into account that he lost billions on a 6-figure income. It’s clear he was either living beyond his means or playing in a game of mini-baller roulette that got quickly out of hand.

  10. Cletus
    January 30th, 2008 | 1:22 pm

    It’s a feat so stupendous only Aleksey Vayner could do it. Impossible is nothing.

  11. Ignatius
    January 30th, 2008 | 1:25 pm

    Kerviel: “You see what I did there?”

  12. Societe General
    January 30th, 2008 | 1:27 pm


  13. The Grizz
    January 30th, 2008 | 3:17 pm

    Charlie McDanger – I have taken to saying “disconcur” when I do not concur though I am pretty sure it’s not a word. However, that does make it any less fun to say.

  14. coop
    January 31st, 2008 | 12:27 am

    Mcdanger- due to the inefficiencies of a bankruptcy scenario, it is still worse than zero sum if you bankrupt your counterparty. that’s why lenders ammend credit agreements rather than push their debtors into defualt if they can help it. the net recovery for one counterparty is always going to be less than what the bankrupted counterparty loses. you are right, in my world, money does magically disappear… it goes to lawyers, and consultants, and banks, etc. I know i am beating this to death, but that was the point i was trying to get across… seriously, why can’t you just let me dominate this comment board in peace?

  15. tima
    January 31st, 2008 | 7:44 am


  16. chris
    January 31st, 2008 | 9:26 am

    Respect coop’s disauthoritaay!!

  17. Zeke
    January 31st, 2008 | 1:17 pm

    That Grizz sure can be a disconcursive bastard sometimes.