Wednesday, July 12, 2006

Benjamin Graham was intelligent, but he wasn't always right

Benjamin Graham once said that the study of Greek and Latin is the best possible preparation for a career in finance. An absolute attention to minutiae, faith that perseverence is rewarded with glimpses of truth, the ability to intuit a living breathing structure from a few fragments, the lofty isolation that comes from living inside a dead culture, along with the patience and rigor, are all ideal traits in a securities analyst, who needs to visualize breathing companies from the dead letters of accounting information and rise above the tedious waves of market crowd psychology.

In a recent employment situation, however, my classical education ended up costing me money. In preliminary negotiations, we had agreed to a ten thousand dollar a month draw (along with an appropriate split and a fifty thousand dollar equipment budget). After I had been there for a few days, they asked me whether a hundred thousand a year would be okay. The proper answer would have been, "no, we agreed to ten thousand a month". But here is where my classical education debilitated me. I have always been more Grachian than Julian and experience a slight irritation every time I represent September, October, November and December as numbers. So I thought, "sure, let's think of it as a ten month year, with Julius and Augustus finally purged from the calendar, and December being the tenth month for the first time since 45 BC". Amused by these thoughts, I willingly agreed to the pay cut, and set a precedent for them to renege on almost every other aspect of our original agreement.

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