Wednesday, January 25, 2012

Developing Market

People often ask me what I do for a living? Some think I make ends meat as a sports writing Renegade
trying to penetrate social media culture with a twist of my A96 point of view. Others think I create websites for a living ,while another theory has me working different jobs depending on the season -  umpire, treasurer, and commisiooner from Spring thru Fall
or minimum wage earning snow shoveling fool

in the Winter

Well the truth is right now I ain't doing a damn thing because I am unemployed, but "Once Upon a Time" I had a career. I was a bond analyst. Mortgage-Backed Securities bond analyst to be exact, yeah I am one of the motherfuckers that ruined the country.

Lately I've been trying to get back into the bond game but can't crack the lineup - no worries - I will. But on my journey toward reestablishing myself I can't help but notice the similarities between U.S. bond market and baseball/softball. Huh? Did I just write that ? And yes while I am drinking while writing this, the parallels between the two are sobering. I don't even need to add Barry Bonds 

to this conversation to connect the lines. I know that on the surface they seem very different, but if you look deeper and understand/appreciate the rules and strategies, there are many common elements between the bond market and playing ball.

Top Ten Bond Market and Softball Similarities 
10. Bullies and Thugs in Both -  Some wear ties. Some wear hoodies. Intimidation is their game. Same shit. Just worry about what you do.
9. Classifications - The bond market consists of a great number of types of securities - U.S. Treasuries , Corporate High-Yield , Mortgage-Backed Securities ,Asset-Backed Securities ,Agency , Municipal Bonds, Collateralized Debt Obligations. Softball consists of many different styles of play - Arc, Lob, Modifed, Windmill, Sling. The classification in both is broken down by the kind of pitch thrown. 
8. Competition - Both are driven by competition. Where can I get the best return on my financial, time, and pride investment? Compare. Compare Compare.
7. Knowledge is Power - The Bond market is tricky, but like baseball rules, understanding the basics takes the mystery out of them. Educated guesses and interpolations apply.
6. Mathematical Statistics - Bond Market investors want to know key stats like yield, to determine a bond's expected return so they can make an investment decision, Players/managers want to know their key stats like batting average, on base percentage, and earn run average to gauge performance and predict future results. 
5. Clutch - Pressure is a privilege as meeting strict deadlines and stepping up to the plate in key situations a must in both.
4. Benchmarks - bonds and players are both valued relative to a benchmark. For example, a 10-year Treasury might be used as the pricing benchmark for a 10-year corporate bond issue. While players are evaluated relative to the performance of their peers. i.e. Catchers stats are compared to other catchers
3. Curves  - Bond pricing curves are constructed using the yields/rates of underlying securities with similar maturities. In baseball/softball, a savvy pitcher will construct and develop a good curve to give himself an edge.
2. Risk - In both you expect a large return for risk, but you also pay a price.  In the Bond Market , the riskier the investment the larger the return/spread. In softball,  taking chance like missing a cut-off man can open squash a rally or open up a pandora's box. Managing Risk is crucial.
and the Number One Bond Market and Softball Similarities

1. Hustle Hard
- No one is going to give you shit in either industry. Its cut-throat, but when you find a good friend and mentor hold on to them. Trust is earned not given away.

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