Decisions Decisions

Yesterday I was at the Fund Conference in Chicago.  Late in the day if you stayed you got a treat.  Tom Sosnoff of Tastytrade gave a forty minute talk.  They have a newish brokerage called Tastyworks.  I have seen and used their tech and it’s super intuitive for people that don’t know how to trade.  I dare say it’s the best trading software out there.

Tom was a floor trader like me.  We are a different breed.  He traded in the pits from 1980 to 2000.  He started ThinkorSwim in 2000, and sold it in 2008 to TDAmeritrade.  Ironically right around the same time another CBOE floor trader started Options Express and sold that to Charles Schwab.  Another one started Archipelago which runs the NYSE.  It’s pretty likely that if you are doing anything in capital markets you are using or trading against a Chicago trader from one of the firms here.

This B2B Fin Tech thing runs deep into the genetic DNA of the Chicago entrepreneurial ecosystem.

Tom talked about a few things.  Here are a couple of gems.

• Volatility is just a sign for fear.  Fear brings opportunity.  Run to volatility if you are an entrepreneur and want to take advantage of opportunity.
• When bull markets unwind, or assets unwind, opportunity is created

He also talked extensively about entrepreneurship and decisions.  The point is that there are a lot of smart people out there.  The world is full of them.  The entrepreneurial ecosystem is full of them. The difference between success and failure is the ability to analyze risk and the corresponding reward from taking those risks and making a quick decision about go or no go.

Entrepreneurs that win make the decision quickly, and choose the right path.

I remember when I was getting my MBA at Chicago Booth.  I brought my entire international class on the trading floor at CME.  We messed around in the pits with mock trading and on electronic trading screens.  The one question I got from almost everyone is how do I make a trading decision.

When you were a floor trader, you had to instantaneously take in information, process it, quantify the risk, decide buy or sell and how many, and then execute it. This happened within one to three seconds.  Sometimes you had edge, sometimes you created an edge for yourself.

By the way, machines and algorithms cannot be successful unless they have some edge.  Brains can be successful.   This is why the future with artificial intelligence and quantum computing are going to be great for humans.  It will allow us to use our brains in different ways to create great outcomes for people and raise standards of living.

Knowing how to make a market in something allows you to learn how to make risk/reward decisions quickly. That’s what floor trading was really really good for.  For entrepreneurs, it is the difference between success and failure.