Regulators go to extraordinary lengths to ensure that all the participants in the capital markets get treated equally and fairly—just look at Martha Stewart’s conviction for selling an asset that her stockbroker told her everyone else was selling. But while this is a noble aim, it is frequently not realistic. On a recent evening in the city, a former colleague related an anecdote which in retrospect struck me as a rather keen observation.
A businessman found himself on hard times, and turned to his local reverend for advice on how to ameliorate his financial woes. The reverend stoically told the man, “Take a beach chair and a Bible down to the ocean. Walk to the water’s edge and sit on the beach chair, then take the Bible out and open it up. Allow the wind to blow through the pages for a while and eventually the Bible will come to rest on a certain page. Read the first words your eyes fall on and they will tell you what to do.”
The man does as he is told. Three months later, he reappears at the church in a glamorous new limo, decked out in the best Armani suit money can buy. He proceeds to hand the reverend an envelope full of cash as a donation. The paralyzed yet delighted reverend asks the man what passage in the Bible was able to reverse his fortune, and the man replies, “I did exactly as you told me, Reverend, and when the wind died and the pages ceased to turn, I looked down and the words I read were: Chapter 11.”
I bet he wasn’t a corporate bond investor.