Differences Make Markets: Or, The story of "Frug"

Some years ago when I was in the stock brokerage business, we were informed at the office that the "big kahuna" or "big boss" from Chicago was coming to the office for a review. A review of what was not made clear. He had a notorious reputation for being tough to please. We naturally cleaned our offices so it looked like we never even worked with paper. He was flying in from Italy we were told where he owned a vineyard just as a hobby. Yes, he did look a bit like Don Corleone. I was more than nervous and did not know what to expect. I wondered what we might chit chat about.

We were told to have our prediction for the best performing stock for the next year, as well as our prediction of the strongest sector and the final S&P 500 value for the year. He was to give us his view of the coming year.

When the morning arrived, we all gathered in the conference room. Then he said, " Well, let's go around the room and you each can tell me what your prediction is for the next year." As each broker stood and recited, I grew more and more impatient. I was well aware of all these guys and what they thought. I needed some answers please. I needed some guru stuff. Then I gave my speech and could relax.

When we all finished, it was time for "Frug" to speak. "Well" he said, I see you all have some real differences, and that is wonderful." There are certainly a lot of trades right here in the conference room. Dorthea loves medical, and Denis hates it; Denis likes technology and Dick hates it for next year. Dorthea loves utility stocks and I don't.

This is very healthy. In fact, these differences and your ability to see them quickly and act on them, is the very skill you need to nurture in order to be successful in this business. Do not for a moment be discouraged when you see differences. Differences are what make America great. Differences make markets!

The meeting was over. It was nothing like what I had expected. " What a waste of time ," I thought.

Over the years I have never forgotten a word of his speech, and yes I am very happy I did not go over my expertise in Boone's Farm Apple Wine.