WWF in the Pit
I was thinking about some of the differences of opinions that we would have in the wheat pit, and how they would be resolved. Usually, they would end up with a lot of yelling and threats, but it wouldn’t really escalate much. Sometimes, there would be a good punch out, while all the guys were hooting and hollering like a fight at an NHL game. Nobody really got hurt, but egos were bruised, and the loser would slink off vowing revenge. After a couple of days, all would be forgiven. Once, I tripped up a newbie, having him sell me 300,000 bushels of wheat when he meant to buy the wheat. He tried to bust the trade but was rebuffed by the pit committee, and I got the trade at the low of the day. He ended up sucker punching me right in the solar plexus when I wasn’t looking and took me out. The pit committee tried to suspend him right then and there, but I had juice with them and kept the guy in action, as I decided to strip him of some more cash since he was already on tilt. I stood on the higher step of the pit, right on top of him since he was short at the bottom, and I bid right over him causing him to bleed some more. Finally, the market was going into the last 15 seconds of trading, and he was frantically bidding, with all the locals jumping all over him, biting at him like mosquitoes. I saw a hedger come in who I knew would have the wheat the guy wanted come in with a big sell order. I could tell it was a big order by the look on his face, and a few other tells. I managed to maneuver my opponent to the top step of the pit and when the hedger raised his palms outward to sell, I swept my foot back behind the guy who hit me, and gave him a little shove. He popped out of the pit like a cork and missed the trade which would have been his out. I ended up buying some more wheat from the hedger, and the market closed up strong, with follow through expected in the next session. Needless to say, the newbie was pissed, although I apologized for my clumsiness. Afterward, the newbie decided to declare war with me, as he was a bully in real life. He didn’t know that I had more angles than Pythagoras, and was willing to use them all. He’d be one step below me trying to front run me and steal my trades. To combat this, I’d hold a deck of trading cards an inch thick in my hand which, with all the hand waving, I’d manage to come down with the deck really hard on the area of the soft of his shoulder. That would be enough to put him out of business for a few minutes. He retaliated by giving me a few sharp elbows here and there, but I have the hide of a basilisk, and that didn’t bother me. Finally, I decided to dispatch him, and resorted to the physical jab of a sharp pencil. Pencils do real damage, for those who never thought of it. In fact, a sharp pencil is your best defense against a mugger. I still wouldn’t shake him, as by that time, although we were enemies, he was good for my pocketbook. I made my big mistake when, aftermarket, he was sitting at our bar, with us, regaling us with his tales. I was sitting at the booth behind him, and I borrowed a cigarette lighter from a girl, reached under and lit his shoelaces on fire. I didn’t realize that shoelaces were so flammable and he got a nice hot-foot and leg.. Finally, he thought I was so crazy that he ended up giving up his lease and disappeared forever. That saddened me, as the few months he was there, he accounted for 6% of my profits. The moral of the story is that in the pits you have to stand your ground, right or wrong, and can never back down. Back down and lose respect. Lost respect equals less trading equals less opportunity.
Jeff
Jeff – Really would love a penny of our thoughts on media financial pundits like Jim Cramer, Suze Orman, and Jean Chatzky. Worthwhile or worthless?
Jennifer
January 5, 2009 at 4:36 pm
go for the knee Johnny!
.
cavil – it’s WWE now due to trademark dispute;
awesome story though!
Jevon Jaconi
January 5, 2009 at 7:44 pm
Great story as usual Jeff. Still waitin’ for the book.
Cheers,
George
George Parkanyi
January 5, 2009 at 10:44 pm
Jevon, My lack of knowledge of popular culture just keeps rearing it’s ugly head.
George,
I’m really trying to finish the book ASAP. I just got permission to put my favorite post of all time from DS in the book. Hopefully, it will be finished before global warming kills us all:)
Jeff
masteroftheuniverse
January 6, 2009 at 1:25 am
Jennifer,
Thanks for stopping by. I really don’t think much about taking advice from any of those folks. I wouldn’t take any advice at all from Cramer, although I understand Orman has good advice on thrift and saving.
I wouldn’t really take the advice of brokers as they are just salesmen. Long term investment in the stock market is probably the best road to accumulating wealth provided you stay the course. Right now, most stocks are on sale, just like everything else. Do your own thinking, find an investment that you’re comfortable with, and don’t listen to touts like Cramer or any of those guys on CNBC.
Good luck.
Jeff
masteroftheuniverse
January 6, 2009 at 1:40 am
I’d be interested to learn about the implicit rules of engagement among pit traders. Just like ham radio operators share common codes of conduct (I dealt with them for many years while arranging bulk shipments of wine from vineyards to ports), I imagine pit traders do so as well. Why I ask this? Because had this story happened in Russia, a pissed russian trader may have dealt with this problem swiftly, a.k.a. brute force. However, you weren’t afraid of possible off-the-pit tit for tat deals. You guys must have some clear, unspoken line-in-the-sand rules, aside from Ben Franklin’s all civilized behaviour… Since this guy never returned, he could have gone all the way if he had wanted to.
Roberto
January 6, 2009 at 3:39 am
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January 6, 2009 at 4:02 am
Roberto,
Of course the exchanges have pit conduct rules which prohibit fighting, swearing, and other heavy physical stuff. That being said, the rules have been known to be ignored in the heat of trading. Money can bring out the worst behavior in people. I would never, ever back down from a confrontation in the pit, despite the financial implications. If one backs down, one would lose respect. Think of the pit as a dog pack, with alpha dogs and followers. I never was the alpha dog, as there were a few big commercials in there who were. However, among locals, I was kind of an alpha and didn’t take any shit off of them. I didn’t take any shit off the commercials either, but dealt with them in a different manner, the tricks I would use are being described in my forthcoming book. Incidentally, I did have some out of the pit encounters which I will describe later. People tend to blame the people on the other side of their trade for their own misfortune. In retrospect, thinking of the part that I played in the economic demise of a few dozen wannabee traders, I’m probably lucky to be alive.
Speaking of ham radio, I’m a ham radio operator, and operate strictly CW (morse code). I have always loved amateur radio, and the magic of the ham bands. I have a nice little station, but only have a vertical antenna and a couple of dipoles and a long wire antenna. Some day before the next solar cycle hits, I plan on putting up a nice tower with a beam antenna.
Jeff
masteroftheuniverse
January 6, 2009 at 2:25 pm
Wow, morse code. Now it gets interesting.
Yes, I mentioned the ham radio because I remembered this about you. I am far from a follower, however, I spent almost 2 years talking to the vineyards over the radio (just voice) -located 600 miles away from where we were at the port)- and it didn’t take long to realize there was a vast community of amateur operators out there. It didn’t take much either to learn those informal rules of conduct and after a while I not only enjoyed it but developed great respect for everyone involved. I remember a few cases where there was some problem somewhere -like someone lost or in an accident- and was surprised by the radio operators interacting and passing the word trying to help. But CW must be a completely different world with plenty of mystique.
Roberto
January 6, 2009 at 10:34 pm