Arrogance Has Flavors? Here’s the JP Morgan Variety
May 31, 2012
If JP Morgan’s arrogance had a flavor, what would it taste like? My guess would be bitter given the loss they incurred after their recent decisions. The article The Type of Arrogance That Cost JP Morgan $7 Billion tells us that they might rediscover the benefits of being humble in the future, if a lesson was learned.
JP Morgan threw intuition out the window as;
“They bet on the market almost exactly when it started its 10% nose-dive between the beginning of May and last week. JP Morgan bet against short-term protection on the market when investors were most complacent.”
“JP Morgan was assuming they knew better than everybody else. They assumed that the normal indicators of a complacent market were wrong, and that problems in Europe wouldn’t faze investors. Furthermore, they were so cock-sure that they were right that they bought no protection whatsoever.”
The flavor that will see the least bit of sampling for a while is definitely JP Morgan. Things could have gone much better had they utilized more thought and less arrogance in their decision making. Maybe they’ll be reminded that nothing is guaranteed as they eat some humble pie.
The wisest elders always say that you should never assume anything and you probably know the rest of that saying. One thing is for sure… the Execs at JP Morgan provide a keen reminder on why it’s important not to assume too much.
Jennifer Shockley, May 31, 2012
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