P4 - I think he had incredible control over two fragile emotions that often destroy traders - fear and greed.

This is especially true among people who are fanatically pursuing self-interest.

Many people inside Salomon considered him to be the best trader on Wall Street. When people talked about him, they always used a tone of awe: "He is the best here," "the greatest risk taker," or

"Liar's Poker Veteran" P5 - John Meriwether believes that "Liar's Poker" is similar to bond trading.

It tests a trader's character.

It betrays the trader's intuition.

Good players are also the best traders, and vice versa.

We all have no objection to this.

p6 - The bids gradually increase until everyone agrees to "dissent" to the last person to bid.

Only then can players reveal their serial numbers and know who wins and who loses.

During this process, players are thinking about probability.

What is the statistical probability that three 6's will appear in a series of - say, a total of 40 - randomly selected serial numbers?

However, for experts, the math problem is not a problem. The difficulty lies in seeing through the disguises of other players.

When each player learns to cheat and cheat both ways, the game becomes extraordinarily complex.

It feels a bit like a real deal, like a joust to war.

The questions that the players in the "Liar Game" ask themselves are, to some extent, the same questions that bond traders ask themselves during the trading process.

Is it wise to take such a risk?

Am I thankful for myself?

Where is my opponent's cunning?

Does he know what he is doing? How to exploit his negligence?

Why is he shouting? Is it blackmail, or does he really have a strong hand?

Was he trying to lure me into making a stupid bid, or did he really have four of the same number?

Each player speculates on the weaknesses, predictability, and behavioral patterns of others, trying to avoid making the same mistakes themselves.

p26 - "If they ask you why you want to be an investment banker, they really want you to talk about the challenges, the thrill of doing big deals, the excitement of working with highly intelligent people, etc., but never, ever mention the money." p31 -

Salomon had a virtual monopoly on the entire bond market in 1979, with the exception of junk bonds, which was the specialty of another firm, Drexel Boenheim.

We'll talk about this company again later.

But in the late 1970s and early 1980s, junk bonds had not yet become a phenomenon, and their share was very small. Salomon Brothers was the leader in the entire bond market.

Other companies have no intention of competing with Salomon Brothers. This kind of business has limited profits and is not very respectable.

Raising shares for a company is the most profitable.

The most respected person is someone who knows a lot about the company's CEO.

Socially and financially, Salomon Brothers was an outsider.

p33 - For example, a salesman from Salomon sells $50 million worth of IBM bonds to Pension Fund

Ten thousand U.S. dollars.

Of course, he could leave more if he wanted.

Because the bond market is different from the stock market, commissions are not public.

As long as you understand this, the following trick will be easier to understand.

Once a trader figured out where the IBM bonds were going and the mindset of their holders, he didn't even have to work hard to get them flowing.

For example, he could ask the salesman to persuade Y Insurance Company that the price of IBM's bonds has increased since X Pension Fund originally bought it.

Whether this statement is true or false is irrelevant.

The trader can then take this opportunity to purchase the bond from Fund X and then sell it to Insurance Company Y, earning another 1/8 point.

As for Fund

As long as both parties to the transaction are in the dark about the true value of the bond, the drama can go on.

The people on the trading floor may not have much education, but they all have Ph.D.s in understanding human ignorance.

In any market, just like Liar's Poker, there is always a fool.

p34 - Understanding the market means seeing the weaknesses of others.

The so-called fool is nothing more than a person who buys high and sells low.

At a press conference on October 6, 1979, Volcker announced that in the future, the U.S. money supply would no longer fluctuate with the business cycle, the money supply would be fixed, and interest rates would be liberalized.

I believe this event ushered in the golden age of bond traders.

Without Volcker's U-turn, scores of bond traders would have remained unknown.

In fact, changing the focus of monetary policy from controlling interest rates to controlling money supply means that interest rates will fluctuate violently.

Bond prices and interest rates move in opposite directions, and the two are closely related.

p51 - In fact, Salomon had to be like this, unlike Morgan Stanley, which was a non-Jewish upper-class bank with a large number of paying corporate customers.

The public image of Solomon was that of a coterie of socially insignificant, shrewd and honest Jews who had their noses buried deeper in the bond market than any other company.