Warren Buffett is fond of saying that any player unaware of the fool in the market probably is the fool in the market.
Michael LewisPeople dislike uncertainty so much that they will impose an order on it even when it doesn't exist.
Michael LewisMy client loved risk. Risk, I had learned, was a commodity in itself. Risk could be canned and sold like tomatoes.
Michael LewisYet another hedge fund manager explained Icelandic banking to me this way: you have a dog, and I have a cat. We agree that each is worth a billion dollars. You sell me the dog for a billion, and I sell you the cat for a billion. Now we are no longer pet owners but Icelandic banks, with a billion dollars in new assets.
Michael LewisThe incentive for the outsider is to attack the system right up to the moment he is co-opted by it. The incentive for the insider -and this took some getting used to- is to allow yourself to be attacked, and then co-opt your most ferocious attackers, and their best ideas. The effect on the system as a whole is to make it more stable, because everyone winds up working on its behalf.
Michael Lewis