Below is an excerpt from Liar’s Poker. The narrator is a rookie trader on Wall Street learning from a seasoned trader, Alexander.
Remember Chernobyl? When news broke that the Soviet nuclear reactor had exploded, Alexander called. Only minutes before, confirmation of the disaster had blipped across our Quotron machines, yet Alexander had already bought the equivalent of two supertankers of crude oil. The focus of investor attention was on the New York Stock Exchange, he said. In particular it was on any company involved in nuclear power. The stocks of those companies were plummeting. Never mind that, he said. He had just purchased, on behalf of his clients, oil futures. Instantly in his mind less supply of nuclear power equaled more demand for oil, and he was right. His investors made a large killing. Mine made a small killing.
Cool, eh? It gets better.
Minutes after I had persuaded a few clients to buy some oil, Alexander called back.
“Buy potatos,” he said. “Gotta hop.” Then he hung up.
Of course. A cloud of fallout would threaten European food and water supplies, including the potato crop, placing a premium on uncontaminated American substitutes.”
This agrees with an earlier summation of Alexander’s view of trading and the markets in general:
He saw the markets as a tightly woven web. Yank on one filament in the web, and the other filaments had to move, too.
Now that's what I call a global view. If a butterfly in the Amazon flaps its wings...
addendum, later in the day: I can’t remember the last time I raced through a book with this kind of speed. It really is thoroughly entertaining. If you’re looking for a witty and clever read, and are perhaps interested in learning a thing or two about the inner workings of Wall Street, give this book a shot.