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The Man in the Arena


June, 2010

A good friend, Larry Doyle, pointed us to a speech by Teddy Roosevelt that he gave in Paris, France in 1910.  The speech titled “The Man in the Arena” became known for this famous quote:

It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.”

There are many men in the arena and then there are many men not in the arena but pretend to be.  Landon Donovan of the US Soccer team is a man in the arena.  US Senator Ted Kaufman is a man in the arena. Elizabeth Warren is a woman in the arena.  Our troops fighting in Afghanistan and Iraq are men and women in the arena.  On May 6th, when things got tough, many of the new automated “market makers” chose to leave the arena.  They basically chose not to fight since they were not 100% sure that they would win.  Many have tried to compare the flash crash of May 6th to the crash of 1987 or even a mini crash in 1962.  We beg to differ.  The specialists tried to maintain orderly markets back then.  They were in the arena fighting.  The effort was there but they were overwhelmed in the end.  Contrast that to May 6th, when the market makers of today ,who get all the benefits of a specialist but none of the requirements, chose to just leave the arena.

There are times that we here at Themis Trading feel like the man in the arena.  We believe our cause is worthy and have devoted ourselves and our firm to helping the market get back to a fair and transparent market, where equity investors can feel confident that they are helping companies raise capital and not feel like they are just playing in a casino.  We don’t know how this fight will end but we know that we are still swinging. 

2 Responses to “The Man in the Arena”

  1. Jamie Selway

    “If your grandfather was HFT, and your father was an HFT, what would that make you, sir?”

  2. Natan

    Joe – your characterisation of specialists doesn’t resonate with me – they were the ones caught abusing their priveledges, stepping in front of client orders, consistently making the type of returns-on-capital normally associated with monopolies (and indeed they had no competitors in their own stocks). By contrast, HFT firms have to compete and enjoy no priveledges – although you argue that by outspending the buyside on technology they are able to extract a competitive advantage. The market is fairer now than it was then, but it’s MUCH more competitive than it was – and some of the competitors are insanely smart. We both agree that trading institutional orders has got tougher – but we disagree on what should be done about it. Of course, we can probably both be right (or wrong) at the same time!

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