What If? (Liar’s Poker)

In Liar’s Poker, Michael Lewis recalls his experience while working for Solomon Brothers. An interesting dialogue that he details is one that took place between him (Michael) and Alexander (his colleague). Alexander taught Michael an important life lesson – to always ask: what if?

When the Chernobyl disaster hit, for example, Alexander reasoned to Michael in a phone call, that if demand for nuclear energy fell, the demand for oil would increase. So he bought oil futures, expecting oil prices to spike. Then, minutes later, he called again. “Buy potatoes!”

The rationale was that European agriculture would be infested as a result of the incident, thus increasing the demand for clean American vegetables. Alexander made a small fortune – he was right in both cases.

In trading, and even in life, there are opportunities that you can exploit if you think fast, and think ahead. When everyone is distracted by the problems, be prepared to take advantage.

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