Louisiana-born investment advisor Blaine Lourd gave a 2007 interview to Michael Lewis, and Lourd discussed the gullibility of investors:
“When you got a new customer, all you needed to do was get three trades out of him. Because one of them is going to work. But you have to get the second one done before the first one goes bad.”
If the new client makes just one trade and that goes bad, the client may leave. However, if the client makes several trades, at least one should be successful. A tweet on May 14, 2014 described this as a “Wall Street adage.”
Portfolio magazine
November 19, 2007, 6:00am EST
The Evolution of an Investor
Michael Lewis
(...)
The traders in New York would accumulate a block of shares, driving the price up, and then get brokers like Blaine to unload the shares quickly at the higher price—whereupon the price would, often as not, fall. “Seven months in at Lehman, I was one of the top rookie producers,” Blaine says, “but every stock I bought went down.” His ability to be wrong about the direction of an individual stock was uncanny, even to him. At first, he didn’t understand why his customers didn’t fire him, but soon he came to take their inertia for granted. “It was amazing, the gullibility of the investor,” he says. “When you got a new customer, all you needed to do was get three trades out of him. Because one of them is going to work. But you have to get the second one done before the first one goes bad.”
MAXFunds
A REFORMED BROKER EXPOSES WALL STREET
JANUARY 14, 2008
Michael Lewis tells a wonderful story in the new Portfolio magazine – a coming of age piece if you will – of a successful stock broker who slowly realizes the (ahem…) shortcomings of his business.
‘Seven months in at Lehman, I was one of the top rookie producers,’ Blaine says, ‘but every stock I bought went down.’ His ability to be wrong about the direction of an individual stock was uncanny, even to him. At first, he didn’t understand why his customers didn’t fire him, but soon he came to take their inertia for granted. ‘It was amazing, the gullibility of the investor,’ he says. ‘When you got a new customer, all you needed to do was get three trades out of him. Because one of them is going to work. But you have to get the second one done before the first one goes bad.’
Twitter
Chris Blakely, CFP®
@cblakely
“When you get a new customer, all you need to do is get three trades out of him, because one of them is going to work.” Wall Street adage :(
2:45 PM - 14 May 2014
Above, a 1934 plaque from the Big Apple Night Club at West 135th Street and Seventh Avenue in Harlem. Discarded as trash in 2006. Now a Popeyes fast food restaurant on Google Maps.
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Above, Big Apple Corner at 54th Street and Broadway in Manhattan. Google Maps. Stolen and missing, 2021-2024.
Above, John J. Fitz Gerald, from the Aug. 15, 1931, Binghamton (NY) Press, pg. 14.
Listen to Robert Emmerich introduce "The Big Apple," a hit song from 1937. Music written by Bob and performed by Tommy Dorsey's Clambake Seven with Bob on piano. Lyrics written by Buddy Bernier and sung by Edythe Wright. Audio provided by Dorothy Emmerich.
Also listen to a 1937 "The Big Apple" song by Ozzie Nelson and his Orchestra. See a 1929 photo of John J. Fitz Gerald and a 1931 photo of John J. Fitz Gerald.
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