In one such interview, William Eckhardt talks about a fascinating, if somewhat basic premise that governs most traders..
“The call of the countertrend”
There’s a constellation of cognitive and emotional factors that make people automatically countertrend in their approach. People want to buy cheap and sell dear; this by itself makes them countertrend. But the notion of cheapness and dearness must be anchored to something. People tend to view the prices they’re used to as normal and prices removed from these levels as aberrant. This perspective leads people to trade counter to an emerging trend on the assumption that prices will eventually return to “normal”. Therein lies the path to disaster.
Immediate comparisons to Kerry Packer are obvious. There are a lot of similarities and then again… Will get into that in a susequent post but for now there are two things that stick out abt cricket’s debt to Kerry Packer’s brilliance.
1. Packer was famously quoted from a 1976 meeting with the ACB with whom he met to negotiate the rights to televise cricket. According to witnesses, he said: “There is a little bit of the whore in all of us, gentlemen. What is your price?”
2. This basically conveyed how the world saw the saga.
The BCCI are sure in the thick of the action right now…