The Maanga

Alberto Berasategui is one player that I can never forget. Although I was a kid who didn’t understand tennis points, I remember trying different ways to pronounce his name after watching him hitting inside out forehand shots with crazy angles. He was definitely my favourite player until I saw Kuerten play.

I am sure this guy would give Nadal a decent run for his money if he played today. His speciality, I learnt recently, was that he used a forehand grip that currently no one uses on tour. After trying the grip for a couple of sessions, my respect for this champion has increased. Its a pain to simply hold the racquet in that position, let alone hit it like he did. I wish I could recollect how his backhand looked, but all I remember were his inside out forehand shots.

I never saw him play after the French Open finals he lost to Bruguera but he introduced me to tennis, I guess. It seems he had a reasonably good career.

An excited Aussie friend wanted to place a $300 bet with me against the visiting Indian cricket team’s series victory. Since I don’t care shit about cricket, I managed to provoke him to place the bet on tennis.

The deal is this. The fellow whose countryman reaches top ten in tennis first will lay claim to the $300. In the process, I was allowed to utter unspeakable insults on Australian sporting culture. That is $300 well spent.

I might even win this bet. Because, Inspite of hiring Tony Roche and releasing media bytes on how hard the twit is training for the Aussie Open, Lleyton Hewitt is down in the dumps and the other shining lights of Australian Tennis, Chris Guiccone and Peter Luczak, still have trouble breaking into the top 100. We haven’t decided yet on what happens in the most likely incident of neither of our countrymen reaching top 10 inside our lifetime.

Let me stretch this bravado further to invite similar bets on India vs USA. I say that an Indian will be inside the top 3 before an USAian, including the super serving dimwit too.

Or what if we change themaanga.com into a place where people can place mutual bets on everything under the sun? Under the watchful eyes and a 5% commission to Nilu, ofcourse.

Reading about John Gray, while listening to Black Mass by Alexander Scriabin, I realize that this is a dystopian blog directed at various utopias – Free market utopias, mommy utopias,  Federer utopia etc.  

Having realized this, I will now  commit seppuku.

Firstly, do not use this format. Secondly, when you put forward an argument to refute someone’s statement, refuting an alternate hypothesis is neither a necessary[1] nor a sufficient condition.

If the intended result was humor, as you had probably anticipated, you were correct in assuming that the conditions are irrelevant. When the actual result is puke, things get difficult.

Since you are competing with this bitch for being the world’s most thenjupona record, I suggest you two get married, have children and basically fuck each other. And spare others. And logic.

Nilu

[1] — Before you start using Latin phrases, go watch some porn, masturbate and shut up. Usual disclaimers apply.

Taleb´s function is to puke regularly on Wall Street. Maybe he puts his basic thesis best in a a paper titled “Bleed or Blow up”. If your portfolio is long options, it will bleed slowly because of the time decay, but would make lots of money once in a while. If it is short options, it will make steady money with little volatility for a long time, and then blow up suddenly one day.  

Most hedge funds are “Blow up” type, the best example being Victor Neiderhoffer, whose demise was admirably chronicled by John Cassidy.  Taleb did start a “Bleed” type hedge fund, called “Empirica Capital” whose rise was admirably chronicled by Malcolm Gladwell.  Empirica Capital, ahem, bled to death in the few years after that article was written. So Taleb had the time to take a sabbatical and write his second book, Black Swan.  

Taleb probably realized that taking his ideas to the logical extreme (if selling lots of options blows up your portfolio, buying  lots of options should make a lot of money), doesn’t work all the time. So, he tried to re-invent his bleeding (bloody?) hedge fund as Guerilla warfare. At certain times, it might pay being long a lot of options for a short while. Trouble is no one knows what these times are. His trader, Mark Spitznagel, was about to start a new hedge fund in July 2007 to go long options. He was just a bit too late. All the money had already been made by Paulson Capital and Goldman Sachs.  

So, Taleb is not a great money manager himself. But he is very good for saying the Wall Street is rotten. Just like Maanga might not be a great blog in itself (Though I would think the presence of Gasquet fan alone puts it among the giants), but a fantastic one for puking on rotten blogs.  

A writer´s thinking evolves as he lives. “Fooled by randomness” definitely argued for a hedge fund like “Empirica Capital”. After the failure of his hedge fund, Taleb realized that there were some black swans that could be tamed when he read Benoit Mandelbrot´s “(Mis) behavior of the markets” and added those to his list as grey Swans. He also learned a little more about human behavior, about why investors loved “Blow up” type hedge funds as opposed to “Bleed” type hedge funds by studying more prospect theory developed by Daniel Kahnemann and Amos Tversky.  A recent essay by him in Wilmott magazine says most of what Taleb wants to say without the stories.  

So  Black Swan = Fooled by randomness + Prospect Theory + Benoit Mandelbrot  

There are better attacks on Wall Street, but those have gone unnoticed because the papers have been more technical or because Wall Street, that consensus thinking, self-reproducing force like mommy bloggers, doesn’t care. The best in my opinion is a paper by Richard Roll, innocently titled “A mean variance analysis of tracking error” whose one line summary calls into question all of  long only asset management as currently practiced. For Long/short or hedge fund strategies, the equivalent is a paper by Andrew Weisman called “Dangerous Attractions”.  It might be worth paying the $45 that you paid for Taleb´s book to read his paper.

I have decided to pay for the travel of these four to Pakistan.

Here is the thing: make coherent statements or give me credit.

Nilu

PS: Or, sleep with me.

The club is full of people who have no feel for tennis. It’s like playing slow bowling in cricket, only you are not declared out if you hit the ball out of the ground.

All NRIs are pushers, atleast almost. I hate them. 

The best finance book I read this year was the first 248 pages of Alan Greenspan´s book. The worst book I read was the remaining pages of the same book. What was the need to pad it up?  

Nassim Taleb wrote a more nuanced book, The Black Swan, than his previous rant, “Fooled by Randomness”.  Either he has become more subtle or I have, so I enjoyed this one more. Like some directors make the same film again and again, only a little better (like David Lynch), Taleb writes the same book again and again, but this is much better. Will Self, who got kicked out long ago from John Major´s plane for doing heroin on the flight,  wrote a very funny review of the book.  

One book I really wanted to read, but never managed to get the time for was  William Cohan´s book on Lazard.  If I ever wanted to work at a bank, I wanted it to be Lazard, only then followed by Goldman Sachs.  Goldman´s bankers maybe very good, but they are boring  and Lazard has always had all the characters. Like Edouard Stern. Rumor has it that he was shot by a mistress  who wanted a parting gift of $1m, that Stern refused. So, she coaxed him into a latex suit in preparation of some orgy, shot him and left him bleeding. A friend dropped by, and thought that this latex suited body was a new piece of modern art that Stern was in the habit of buying and so left, without helping. Ars Longa, Vita Brevis.   

In fiction, the best read was Manuel Vazquez Montalban´s “The Buenos Aires Quintet”. For me, a novel has to hark back to the first novels, “Gargantua & Pantagruel” by Rabelais or “Don Quixote” by Cervantes. Echoing Borges story, “Pierre Menard”, Carlos Fuentes once said that the better one of his novel gets, the closer it is to Don Quixote. This novel is very Rabelaisian, full of  outrageous recipes, murders, music, sex and of course, Buenos Aires. And of course, in various parts of the book, it tips its hat to Rabelais.  

In non-financial non-fiction, my best read was Bill Buford´s “Heat”, that chronicle of the year that the author spent as a slave in Mario Batali´s kitchen at Babbo and later, as an apprentice to various people in Italy. Again, the link to Rabelais, food and recipes. Maybe I should listen to my shrink a bit more and develop new interests.  

Another nice read was Mohsin Hamid´s “The reluctant fundamentalist”. A short book that can be read at one sitting, it works very well as an allegory, as James Lasdun points out in this review. 

A remarkably bad book, but one very highly praised by critics is Ramachandra Guha´s “India After Gandhi”. Super-boring, it reads like a bad textbook. Maybe that is the final market for  it. If you have no new insights, why write a new history? I compare it with Tony Judt´s  Postwar, a wonderful new history of Europe after 1945. If you want to write a sweeping history, maybe being a little opinionated helps, rather than regurgitating accepted versions of history.  

In blogs, I continue to maintain that there might just be four readable blogs in the Indian blogosphere. Headed by the remarkable Buoyantville, followed by Chandrahas, Neha and Meera.

His favorite book gives his license!

I have one question. Did that book not tell him anything about separating his column from his blog? Or, how one’s opinions may have a price which is non-zero?