One of the great things about working on a trading floor was the level of integrity. One of the best compliments you could give or get from a peer was, “He’s a stand up guy.”. I knew a lot of stand up guys on the floor. No doubt, we competed like hell and tried to get an edge in any way we could. But, once a trade was made, it was done.
Once, I saw my friend sell a bunch of interest rate futures and as he was carding them up the Federal Reserve surprised the market. They lowered rates. I grabbed his jacket and said, “They just lowered a quarter point.” He took them, traded out of them. Took his lumps and by the end of the day made money.
When your back was against the wall, you really found out the mettle in people. Traders can tell you a lot of different stories about where funky things happened. I have seen some amazing things in a trading pit over my career. That “honor” ethic should carry over to real life too.
Brad Feld wrote a great post about integrity. Brad is one of the more transparent people you will read on the web. He talks about the entrepreneur-financier relationship. Trust is huge when it comes to that relationship. Robbie Abed pokes fun entrepreneurs and says they are all liars. I know Robbie so I know he is being sarcastic! But their points are well taken.
In my own dealings with people, I’d rather be blunt and obvious than hide behind mystery, or phrasing things politically. It cuts to the chase and saves everyone time-and money. You don’t have to be a dick, but it does help to be transparent. If you don’t like something say it.
Recently, I started a little boutique business. Seatleaser.com. Parts of it are going great. Parts of it stink. The community is beginning to give me their opinions on the business. It’s great to hear, and because it’s targeting traders they aren’t afraid to give me their opinion. When it’s negative, I don’t care. Negative opinions can be more valuable than positive ones because if you listen correctly, you can make the necessary changes in your offering to mesh up to the market.
Much of the feedback that I am getting is that the idea is fantastic. Website is laid out well. The love this and that. Then there is some negative stuff that people have told us. Fortunately it doesn’t have anything to do with the website, but human behavior.
However, I have run into businesses that are not transparent. They deliberately fudge numbers to try and get money. Some businesses I know have booked revenue from next year into this year, just to make the current numbers look better. Some actually have the revenue, but cannot possibly support that level of sales with the cash flow they have. It’s fun to make fun of accountants, but in business analysis, accounting really can matter. Done correctly, it’s a great truth detector.
In the high frequency trading debate that is raging, I don’t think the HFT guys are being above board. It’s easy to be slimy when you can hide behind a firewall. Lack of human interaction allows people to distance themselves. Milgrom proved that at Yale back in the early 1960’s. I know traders that traded against investment banks in the 1970’s that can tell you how they abused the market. It’s not any different today.
As the political campaign heats up, lots of lies and truth stretches will be told. Obama ran an outright lie in a campaign ad, and Harry Reid lied in the Senate. A Chicago machine politician lying? Of course-it’s their raison d’etre. But it still sucks and will make it worse later on. There will be more lies from both sides.
Power weight lifters say that if they are off in their form by a half inch at the beginning of the lift, when they get to the top of the lift they are off by several inches and it causes them not to be able to make the lift. They often get injured. Lies are like that too. A little fudging early in a relationship can manifest itself to be a gigantic hole as the business matures.
For traders, financiers and entrepreneurs, transparency is the best policy. By not being transparent, you give people false hope. That isn’t good for anyone.
Saw this come across Twitter. Transparency helps farmers too!