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03-Jul-2006
The Customs of an Operation Steeped in Peril, by Victor Niederhoffer

On a recent visit to our office, a savvy reporter, for a well known daily publication, wrongfully and incorrectly tipped by an enemy with opposite positions that we were out of business noted that there was an unusual air of formality in our operations with such things as a couple dozen people packed into a crowded office addressing each other as "Mr", an air of discipline in place, activity, language and demeanor, concerned concentration and silence, daily brainstorming sessions with the senior offices, a division of many responsibilities with 100% attention to their duty by everyone , frequent ringing of bells to warn of the approach of the opens, hours, and closes at which repetitive and important activities were invariably dispatched, look outs posted for enemy attacks and considerable scrambling by all hands when it arrived, , an absence of romantic distractions, parsons or hoodoos ,emphatic enjoyment in the food served daily from below, a daily game of cricket I mean tennis by all operatives on the hard court outside, copious drinking of tea and coffee ,frequent sounding of the position above and below water, much studying of log books, classical music in the background, a group of interns entering and computing positions under the tutorship of senior officers, considerable scientific naturalizing and computing, a private area for the chair to pace about, and several lieutenants making entries as to the good and bad that the hands were up to. I pointed out that we tried to adopt the traditions of the British navy during the late 18th century when they were securing a Pax Britannica throughout the world, making the world safe for trade, encouraging cooperation between countries rather than conflict, spreading the idea of limited government and the rule of law, and transporting the material fruits of the industrial revolution throughout the modern world. Arthur Herman in his excellent book "The Rule of the Waves" summarized these contributions nicely:

British sea power made sure that the nations wealth depended on an active and expanding middle class. It removed the need for large standing armies, and large intrusive government: It established safe and secure trade routes, preserved the liberty of Europe, and the rest of the world... an empire born out of ruthless ambition and brutality had become the basis for a new progressive world order "

The query has led me to thinking about the daily humdrum way of life in a trading room and how it relates to the customs of the British Navy during the hay days described by Patrick O’Brian in the Aubrey/Maturin series. The series is particularly resonant to me because the interplay of the swashbuckling hero, completely competent at all things nautical but totally adrift on anything involving the land, with his much wiser, and competent Dr. friend, Stephen Maturin, modeled after Darwin and Sir Joseph Banks is very similar to the relation that I have with my colleagues, Messrs Grossman, Wisdom, and Castaldo.

The dynamic friendship these two had serves as a model for the profusion of progress that occurred as the modern world was dawning with Aubrey 's energy and abilities, and entrepreneurialism combined with Maturin's scientific curiosity, and attention to detail representing the two sets of personal qualities that spread material and personal well being, and spawned the takeoff (and ten fold increase in population ) that led to the modern world. I only wish that I was as competent as Aubrey in my trading as he was in his navigating, but if I am not, perhaps others aren’t either, and a little reflection and study of the customs might be improving for me and others.

I am inspired in this pursuit by the many similarities between the ocean and the market. Both are fathomless and everchanging. They are beset by internal and external forces which are always changing and never completely predictable. Disaster or great riches can flow to those who can navigate the two successfully. Those who live in each field work in close quarters, shielded from outside life, with great rewards and punishments always in the offing.

Regrettably, I am not a nautical person so I have been forced to gain my insights into the customs from the seamless tapestry of everyday life provided by the 22 volumes in the O’Brian series, helped along by my colleagues of a more nautical bent.

The main lesson I get from the O’Brian navy is the importance of incentives. Each man on the ship as well as the admirals received a share of the prizes. It created the atmosphere of competence and cooperation at all times from all hands. The good trading shops have a similar profusion of incentives, and I am happy to say that almost all in my employ have profited handsomely from their own and the firm's success and suffered when it has experienced misfortune.

The life at sea was subject to shipwreck from the weather, running aground from uncharted territory or faulty equipment, sickness from microbes or lack of proper food, and annihilation from the enemy. The life of the trading shop , at least mine, is subject to annihilation from October 1987 type moves set off by a misguided Secretary of the Treasury, or anticipatory and conjunctive market moves set off by Terrorist activities on the scale of September 11, and combined fleet actions from the higher forces in the feeding chain, who like the French are always ready to ridicule the powers of tradesman and enterprise, or massive withdrawals of troops and funds from the customers. The always present danger strangely sets off an air of attention to humdrum things, practice, and politeness on the ships. We have to give each other the benefit of the doubt. Knowing of our vulnerability to forces beyond our control, we try to go about our daily activities so that there is not a chance that when such an event occurs, we will not be in perfect condition to withstand such attack. Since every hand knows of the possibility of total disaster if they don’t do their job, the hands are willing to fight for their life and very loyal when the crisis arises. We live in tight quarters so we have to keep noise to a minimum and thus, the silence. The division of responsibility with the captain in complete command is necessary to prevent confusion and more important to stave off disaster and balance the seeking of prizes with the risk of running aground. Because of the loneliness of the captain’s job, and the responsibilities he must bear, there is a certain deference shown to him, a space is set apart for him, and the custom is for him to dine alone and not to interrupt him in his pursuit of the main chance. These customs have developed naturally in the ship and all trading shops not supported by unlimited capital of the kind that the big brokerages and banks can use to support their market maneuvers.

It is hard to recruit hands for such a perilous and close quartered job. Thus, considerable attention to recruitment is necessary. We do not press men into our service but generally promote from within based on the ability of the hands to equip the many jobs necessary to go into the proper running of the operation. By that same token, we are not very pleased with deserters as they dissipate the work product of all in the best case, and in the worst case which often happens they try to steal valuable charts and maps, and codes which are necessary for our survival. While we don’t have a penalty of death as was common in Nelson's navy for such deserters, we are often tempted to take draconian actions to preclude such desertions leading to our mutual demise.

One of the amazing things to me about life in the trading room is the air of cheerfulness and friendship that prevails. Knowing of our common goal, supported by incentives, living in constant knowledge of our danger, we adapt a life and let live attitude to our colleagues. We are a band of brothers like the Nelson navy and hardly a hard word is exchanged even when the ship is near foundering.

One of the beautiful things about the Aubrey/Maturin series is the way the author builds up a tapestry of the every day details of the 18th century naval life leaving you with the feeling that while the times and locuses are different today, very similar forces were at work, and peoples’ reaction to them, and the evolutionary ways of dealing with them successfully have not changed. Here's one of my favorite O’Brian passages describing the ability of the seaman to deal with anything except sudden wealth:

But there you are. That is your seaman. He can put up with uncommon dirty weather, endure great hardship and very short commons, a good steady courageous uncomplaining creature under officers he can respect. He will bear all that and sometimes harsh punishment, shipwreck and scurvy. What he cannot bear is sudden wealth. It goes straight to their heads, and if there is the least possibility they get drunk and disorderly and desert in droves.

P.S. To me by far the worst thing I ever wrote was the endless pages on the analogies between poker and trading in EdSpec. While I had read all the books on poker, I hadn’t played the game in 30 years since I lost all my money to Oswald Jacoby in a game that I was in over my head in. The stuff I wrote looked good on paper, but had that same lack of verisimilitude that all the stuff from writers who don’t trade or ghosts who have lost all their money and hope to impress others with their fair thee wells and points and tips have today. I am hopeful that others of a more nautical bent and aptitude will augment what I have written above, correct my errors, sharpen my spongy points. I will offer a reward comparable to the ones awarded monthly for the best letters for the best contributions of a nautical bent on this subject.

Paolo Pezzutti replies:

As an officer of the Italian Navy I finished my assignment as a Commanding Officer of the frigate Aliseo (pictured below) in 2004. O'Brian descriptions of the navy are still valid nowadays. Traditions are very important in the navies. And many of them come from the British Navy of O'Brian's memory. Traditions are to be kept in high consideration because they represent values and lessons from the past. At sea these lessons were and will be valid forever. You have to have great respect of the sea. The weather conditions can change very quickly and transform a calm sea in a storm in a very short time. A threat for the ship and crew safety can be concealed anywhere. You have to learn and live with the inherent uncertainty and complexity of forces and variables when you make decisions. Predictability is never completely possible, because the environment is changing continuously. It is impressive how fast changes can occur both for better and worse conditions. Experience and knowledge of what you can expect help a lot. You get organized to face the worst at any moment. I bring this approach to my way of life, with all the pros and cons of it.

But this is the way I was grown up since the Naval Academy, where, since when you are 18 years-old you are taught these things. The cruise on board Amerigo Vespucci, a beautiful sailing vessel built more than 60 years ago, has the intent to teach the cadets how to respect the sea, living difficult conditions and situations. A ship at sea must be able to ensure first of all the function of survivability, then mobility and finally fighting. The highest priority is given to survivability. When I refer to "the ship", I mean the hull, the equipment in general and the crew as a unique element (I believe a ship is a living organism by all means) of an incredible and beautiful complexity. Every aspect of a ship's life is studied in the minimum details. Both technical and human. The human factor is of fundamental importance. Living in a very close environment, every member of the crew has a specific task. The objective is shared by everybody. At all levels. This makes the difference. Sharing the same values and objectives. Team work is important to ensure coordination of activities conducted in the different areas, the platform services (e.g. propulsion) and warfare related (e.g. tactical situation management). O'Brian navy describes the relationships between men on board ships, with the difficulty and beauty of an unstable balance. A balance of discipline, initiative, bravery, technical knowledge, human qualities.

I do not agree on the view of the military as a framework that poses constraints on the individuals. The organization of the navies today, I speak of what I know, reflects what was learned in centuries of life at sea. This has a value. If it is true that such organization might be slow in introducing transformations and changes to adapt to new realities, it is true also that in other "eco-systems" it is quite impossible to find the same cohesion due to common values and objectives, the first and most important of which is survival.

P.S.  Every ship has a crest and a motto. The motto, in latin, is "constans et indomitus". The name Aliseo means a constant and dry wind -- this is the wind which helped Columbus to sail to America. The crest reproduces one of the 3 "caravelle", sailing safe pushed by regular and constant winds. Wonderful and fascinating traditions.

J.T. Holley replies:

I served onboard the USS Stark FFG 31 '90-91 and mostly cruised around the waters of the Atlantic Ocean from Halifax, Nova Scotia down to the lower Caribbean then briefly was on the USS Saratoga before land duty. I came on board the Stark to find a different World than the one that I assumed it would be. It was something frighteningly similar to Mr. Smiths account but also that of Mr. Pezzutti. I to could go on for hours of comparisons but for no reason haven't sat and jotted my thoughts down on paper for the comparisons?

The life at sea is something that is very lonely. Not only for the captain but also equally as lonely for the crew. The captain very simply can segregate himself due to his position and cabin assigned to him, of whom the crew doesn't have that option; they are constantly forced to be with one another without the ability to be alone in their loneliness. For me constantly being around people all the time without the ability to "be alone" was torture, especially when you don't get to choose who you are around.

The first observation that I made once onboard was that men while in dock were jovial, lighthearted, and a comfort to be around but once at sea they became bastards, cutthroats, and monsters. This wasn't due to the isolation or the sea. It became very obvious that these men simply had wives, girlfriends that they regularly had s-x with or were alcoholics/addicts and in both cases were taken away from their sources. The first two weeks at see was no more than a detox. Not a pleasant environment even after the two weeks of separation and adjustment. This might lead to the "sailor attitude" that everyone perceives and comment by Aubrey of "What he cannot bear is sudden wealth. It goes straight to their heads, and if there is the least possibility they get drunk and disorderly and desert in droves." Think of the image of a Sailor, we used to think of a drunken, girl in arm, cussing type, that has some VD. You are at sea with pent up frustration and you do nothing but collect money directly deposited into your account onshore. As soon as you pull into port and hit the pier there are only two things on your mind on average for most of the crew and a big wad of dough that you've never have had equal to in your life.. The U.S. Navy has gone to extreme measure to try to correct this and has a constant fight at hand. Vic your men get to go home every night.

The one thing that sticks out the most from other Branches of Service is that you have a sense of security in the gun, rifle, tank, or weaponry that you man beside you. In the Navy there doesn't exist such. You are on a metal ship in the middle of the water feeling totally defenseless. Nothing in your hand to give you a sense of security. The only thing is if you man missiles or cannon and in today's technological Navy that means sitting looking at switches on a board. No sense of security of which leads to the only thing. Safety and Rescue. You spend countless hours training on nothing but fire measures, chemical attack, or a sinking ship. It is all you got "sink or swim". You basically know how to pull together as a Team to over come all emergencies. Weird concept, men who lie, cheat, and steal from one another placing differences aside instantly and working as one knowing that it's their own life if not accomplished? The training is so exceedingly real for instance a smoke machine used to fill up berthing at 3am and then alarm is pulled. This usually takes place when you just fell asleep, you wake up roll out of the rack see smoke and then know with out a question of a doubt where you are supposed to be and be doing on only a 30 minute nap. Bell Bottoms allow for you to put your pants on while sleeping in your boots!

There are a couple of differences in "traitors" stealing maps and giving away trade secrets. I doubt a sailor has time or that important knowledge to do this w/ China, Russia, Al Qaeda and such whereas onboard the Manchester it's quite possible. The old sayin' "Loose Lips Sink Ships" is the one that is highly applicable and I would be most worried about. Men who don't talk much all day, then go to port and have some liquor can talk all night! The other thing in this light that is a pilot fish is the old Navy talk about Commands and Ships. It is totally negative and is a bad attitude that I've found common among Prechtoablesonians that is "The best command is the command you left or the one you are going to". I hated this so much. It's like no one liked where they were "right now", and as if where they were going was going to be so much different or the place they just came from was so much better? Didn't matter if it was a different class of ship, land, sea, another part of the World it was still the freakin' Navy! When someone is talking about another fund, the fund they used to be at or how things were done there, or how things are going to be done when they get there watch out, man overboard or deserter!

Chain of Commands have there place for a reason. Much of the Navy is very educational now and training is extensive. Those higher up than you know more because they have "read, studied and have been tested" what they didn't pass was an exam on was people, emotions, fears, dealing with someone who is 18 has three children and is away from them, alcoholics, homos-xuality. This was something that stuck out tremendously and why uniformity, efficiency, conformity is so important on a ship. All walks of life were onboard from young, old, ethnic backgrounds, experience, gangbangers, farm boys, and even foreigners trying to get citizenship. If the Chain of Command didn't exist then one naturally would form as in prisons.

Top to bottom, left to right. This is how you clean, paint, and brush your teeth and everything else in the Navy. Very important because I found you remember where you left off prior or where a shipmate was incase you take over. I also would have never guessed how many shades of gray there really were in the World. Painting a Navy ship pretty much involves all 150 shades of gray to ward off that one color, orange from rust! Remember rust never sleeps. Price data never sleeps either and is always advancing, so our eyes have to constantly have and know those different shades of the same color when looking at prices to avoid that one color red that also never sleeps.

Incentives. They only existed in the old days. The US Navy has the same pay rate as the other branches of services. The very first mathematical equation I solved onboard was "hourly pay rate". I got the Joke right away. This was way below minimum wage, but you had clothes provided, three meals a day and no bills. It didn't matter how hard/smart you worked you were still getting paid the same. I get criticized in the work place now in reviews because they don't understand that it's not a race it's a marathon. You are always constantly working so take a measured pace. A lot of people just don't get that, and being in the Navy where it's a 24/7 thing taught me that. It also makes it easier in dealing with emergencies with a constant pace versus being sporadic with work pace timed with an emergency. The only thing that mattered was your life so you made sure to pay attention when training involved that. I felt my life was priceless.

You wanted to know penalties? I stood at Captain's Mast twice. Once for getting a tattoo unauthorized in a hazing ritual. That's right someone turned me in after looking at my body in a shower, knowing what my body looked like before! I only got the tattoo because whoever on my ship didn't have one had to do the dirtiest, foulest, grimiest, nastiest work on the ship. One that I hated was dumping trash into the ocean after it had been sitting in a bin that was 100 plus degrees cooking all week long, I also didn't like dumping trash into the Ocean. I finally after six months of cleaning toilets, pubic hair from drains, laundry, pots, grease, oil, exposed to paint thinner, shinning brass bells, gave in and broke and became like them. I regret it to this day and intend to have it removed. I suffered nothing in that Captain's Mast but a lecture on the human body and infections that can come from needle's (how about the disease that can come from the trash/toilets was silently going off in my head). The second time I stood at Captain's Mast was due to total disregard of the Navy and leaving my ship to be with my Grandfather who had just had a stroke and was dying. I asked for permission to leave and it wasn't granted. Family came first in my life ahead of the Navy. I was gone for 20 days. 28 days and then you are a deserter and suffer severely. The penalty for 5 minutes late up to 27th day believe it or not can be the same and usually was. Though the Captain was sympathetic he let me know that it was during time of War (Desert Storm). My penalty was 30 days restricted to the ship (no leaving for anything), 30 days half pay, 30 days extra duty (constant working considering you were always doing something anyways). I made a mistake and paid for it, my Grandfather admonished me and was disappointed. I lost twice. Very similar to having losing position, emotionally getting out, buying the opposite direction and losing again. Losing twice sucks and has a horrific compounding effect.

There are a million other things to mention and talk about. Good, bad, indifferent. I might have focused on the negative above but tried to keep it in the spirit of the Spec List in focusing on learning from losses.

GM Nigel Davies responds:

I don't believe one can easily separate British naval traditions from its past culture. In the days of empire it was considered honourable to die in the service of king (queen) and country, and in fact many did so.

This deep sense of national 'pride' could be seen at every level of society, even the schools. During my own school days I attended King George V Grammar School in which 'house pride' (I seem to recall there were 4 houses), school uniform and discipline (including canings) were paramount. This culture fostered subordination to authority, I personally found the atmosphere oppressive and could not get out fast enough.

For trading I believe one must have personal discipline rather than the kind that is enforced by the brainwashing tactics of the old British institutions. I would claim that its origins are completely different in nature, emanating from individual striving rather than submission.

Apparently there have been elements of this in the Arab - Israeli conflict, as an ex-lieutenant of the Israeli army once explained to me American and Israeli soldiers could still operate if their leader was killed whereas Arabic soldiers had difficulty in this department. I don't know much of British military history, but I suspect that in imperial days they had the same problem as the Arabs.

Henry Gifford replies:

On a tour of a US Navy destroyer I saw a sign. It was engraved in steel, permanently fixed to a bulkhead in a prominent location.

It described the order of priorities:

  1. Maintain the watertight integrity of the ship's hull.
  2. Maintain manueverability.
  3. Maintain fighting ability.

The lessons and the clarity of thinking are both instructive to me.

Number one is all about survival as the first order of business. Number two involves the choice of engaging or disengaging from an enemy. Number three is lowest on the list for good reason -- it won't matter if number one and two aren't looked after. Thinking about these priorities ahead of time gives a great advantage over panic in an emergency.

J.T. Holley replies:

These plaques are very common and usually have some history or legacy to them. My ship the Stark had one that was unique in that it had a plaque of the names of the 37 sailors who died back in '87. Most ships haven't been attacked other than the Cole since then. The ships where sailors has died due to combat have pretty much been either mothballed or decommissioned! This is where survivor bias is a good thing!

Martin Lindkvist replies:

During my military service (army though, not naval),  I learned the importance of always having your weapon close at hand. If you at any time were seen with your weapon more than 1.25 metres (about 4 feet) away, they would tie it to you with a 1.25 metre rope. The 1.25 metres being the length of one leap for you, should someone try to take it, or should the enemy strike. I find that being within 1.25 metres of the computer or my portable screen and phone is very helpful when the enemy attacks.

Pitt T. Maner III replies:

While working in Puerto Rico about 8 years ago I ran into the CO of the DDG-57, USS Mitscher, , in a museum in Ponce, PR. He invited me to come aboard his destroyer the next day, a Sunday, for a tour.

What was quite remarkable about the tour was the amount of fire fighting equipment and gear that was onboard. The crew had to be extremely well-trained in fire fighting. There was a lot of redundancy, back up, etc for fire fighting. One would not normally think of fire hazard as a major concern but it really is on a wartime vessel.

Another thing that made an impression were red warning lines on the deck around the perimeter of the 5-inch 54 caliber front gun. A closer inspection revealed dents in the deck where spent casings had come flying out. These could do serious damage if you happened to be standing in the area as the gun was being fired. The CO offered me 2 spent casings, but they were fairly heavy so I walked away with only one and sent it back to US by UPS--God knows if it would make it through the mail today with explosive residue on the inside of the shell! It is a terrific souvenir.

Before leaving, the CO told me about budget problems (this was during the Clinton years in 1998) and the need for a strong Navy. I understand the CO is now a rear Admiral.

The tour was quite impressive and it really gave a me a greater appreciation for the dedication of the young people that make up the majority of our military and the fine officers that lead them.

Stefan Jovanovich adds:

You can include the ship builders, too. When our WW II vintage LST was sailing from Vung Tao to Subic Bay and ran into the edge of a typhoon, I had the dubious pleasure as the damage control officer of having to check the lashings of the cargo on the tank deck. Each time the bow hit a wave, the shock would ripple through the length of the ship and the cargo chains would slack and tighten as if some genie were plucking them like strings. All I could think was Thank God for the integrity of the people welding steel plate in 1944 in Pittsburgh.

Mark McNabb replies:

On the water one can find many errors in seamanship due to the presumption that if a big boat has a wheel then it must be like driving a car. Overestimation of ability is rampant around most recreational boating areas where money rather than sense or skill is the rule. Fixation on the objective rather than awareness of the more subtle forces such as current, tide, and wind around narrow port channels is a pet peeve of mine

In more historic fishing and commercial boating areas, that overestimation among the old pirates and fishers only occurs after midnight when they run out of drinks and decide to jump on a boat in order to pillage another friend's dock cooler. In the boat yard this Saturday Bo was re-fiberglassing a smaller center cockpit's nose so it would be ready to go fish Sunday. I asked how it happened and he said, 'Hit a buoy!' I asked the time of impact already knowing the answer....'well about 1am they decided to jump in a boat to go over to Sturgeon Creek and raid Bubby's father's cooler and even though they know the Chesapeake like the back of their hands, they got some help in finding their marks -- that is help from Jack Daniels, Pepe Lopez, and Sam Adams.'

I find on powerboats the inability to dock a boat without saying more than one or two words a certain indicator of skill insufficiency between husbands and their wives or captain and mates. Also a good indicator of skilled charter fishing boats is the degree to which the captain and crew do not discuss boat or fishing strategy as they communicate nonverbally or intuitively on the better boats.

In sailboat racing, thinking ahead of the boat is the most valuable skill: best captain I've raced with was Navy nuclear sub captain who made every task and every challenge fun as he reviewed the big and little picture for the crew approaching marks and tactical shifts. Even when Dutch rolled by a gale force gust in a passing thunderstorm, the crew placed it's trust in the leadership so that one could eagerly enjoy the adventure of a knockdown as the outcome was never in doubt.

Peter Earle replies:

The most basic naval tactic - so basic that we learned of it at West Point - is "crossing the T". It involves manuvering ones' ships in line so as to cross the column of enemy ships. Several tactical advantages are accomplished with this single move:

  1. The firepower of the "crossing" column of ships is maximized while the crossed column is limited to the forward-facing guns, if any, of the foremost ship;
  2. Ranging errors - fairly common in the days of inexact munition science - were made extremely dangerous for the crossed column of ships while essentially negligible to the crossing force; and,
  3. The crossing column could disperse in several ways, including - if their coordination and manuverability were sufficient and more so if they'd done enough damage to slow down the trapped column of enemy ships - "crossing the T" again in the other direction (as was the case in the Battle of Jutland).

With respect to trading analogies, I find an immediate association between the predicament of the crossed ships and being trapped in (an) illiquid position(s) on the wrong side; the fire of the market brought to bear on me and, with my defenses are minimized, I'm left controlling the urge to quickly escape - which would only leave me more vulnerable.

Indeed, my goal is to cross the T on the market: to find those points where the collective consciousness of the market is in a row, aligned and effectively immobilized, unable or unwilling to hurl artillery back at me. After a steep drop, with gloom in the air and nary a dissenting opinion to be heard, it's often time to shuffle on deck (ubiquitous cane in hand), direct the engine room to full bore, and buy 'em hand-over-fist.

James Sogi replies:

Drownproofing: One of the greatest dangers at sea is drowning. Drownproofing is a skill that ought to be learned and practiced ahead of time by ever mariner. Drownproofing itself is simple and can save your life. 

"Never Get in Over Your Head. " Chair wrote. but at times you will find your self there. Many were on the night of June 13, 2006. Fighting off panic in the middle of a crashing market in the middle of the night while heavily long is critical to survival. Breath is one of the most important functions, but interestingly breath can be controlled and has big physiological effects. The control of breath is most critical during panic situations. Panic often induces a series of unforced errors resulting in disaster or death. The drownproofing and breath exercises are helpful to avoid panic on dark and dangerous nights at a stormy sea or in the market. Huffing or panting through the mouth is a precursor to panic and lowers oxygen intake. In boxing the preferred method is breathing in the nose,and blowing with puffed cheeks out the mouth. Meditative methods call for slow inhale in and out the nose. Very basic methods but fan make the difference between life and death.

The Hawaiian Double Hull Voyaging Canoe as a Metaphor for life: The Hawaiians have a saying, "The wave from within swamps the canoe". The canoe voyage is a metaphor for life. First it is a small canoe with limited resources upon which we all live together and our first care should be for the safety and integrity of our canoe, our vessel, our land, upon which our lives depend. Secondly, harmony among the crew is critical for a successful voyage. Tight quarters for extended periods under adverse conditions, exhaustion can lead to frayed tempers and bad functioning which create its own set of dangers. The two are related. Care of the canoe leads to harmony of the crew.

Watermen:Hawaii has some of the most beautiful cruising grounds of any in the world, but there are few cruisers here because the dangers are too great. It takes specialized local knowledge to navigate the intricate bays filled with rocks, the shifting winds, currents, waves, reefs. I know the rocks in the water, the line ups of the trees with the mountain, and signs of the clouds, can predict what the wind will do, what direction from which it will blow, and the intensity ahead of time, know the changing depth of the tides and the effects on the ocean, and can predict with some reasonable accuracy what the wave direction, size 20 hours hence, at my 'spots'. study of conditions and cycles around the entire pacific help to know conditions here. Men with the ocean knowledge and experience here are known as "watermen", combination sailors, surfers, fishermen, men of strength and specialized knowledge. I give these men my high respect.

Steve Leslie details:

Ships are built for a variety of purposes. In an Aircraft Carrier group, for example, the U.S. Navy forms a battle group on an as-needed basis and assigns ships based on the mission. As a result, there are numerous complimentary ships which are involved. At the centerpiece, is the Aircraft Carrier itself. It stands over 20 stories tall, carries 70-80 planes, houses 6000 crew members and is constructed from over 1 billion parts. It is worth $5-6 billion itself and has an additional $1 billion in aircraft on board. It has a speed of 700 nautical miles a day and can travel literally anywhere in the world in two weeks or less. It is expected to travel under any and all duress, during all conceived or unimagined weather conditions and on any ocean or sea. Its enormous value makes it an inviting target for hostile forces.

It is supported by 2 guided-missile cruisers to attack land-based targets. Each of these cruisers can cost over $1 billion and are armed with nuclear weaponry. Their total arsenal is beyond description.

Two destroyers stand at the periphery of the group as a defensive measure against submarines and aircraft. They exist to insure the safety of the Aircraft carrier. Nothing hostile is permitted to bypass their line of defense.

A frigate seeks out and attacks hostile submarines. Its lightning quick agility and flexibility allows it to identify and deter any aggression expressed against the group. It is the quick response unit above the surface.

Nuclear powered submarines are deployed to defend against other ships and submarines. Additionally they are used to attack and destroy land-based targets. They also can carry nuclear weaponry.

A supply ship carrying food, fuel and ammunition is for support of the total group.

In addition and depending on the mission, there may be a mine sweeper, troop ships and other ships such as other amphibious vehicles.

The goal of the Carrier group is to carry out the mission and defend the battle group against attacks. Its mindset is singular in nature. It is imperative that all understand their defined purpose, the reason they were created and thus their role in the mission. It is through the meticulous strategy and careful orchestration that everything comes together in a beautiful yet awesome display of pageantry and power.

It takes years to design, construct and maintain such a fleet. Once assembled it is intended to be operational for multiple decades and be more than capable to withstand any challenge placed upon it. It is under constant scrutiny and review. Properly formed, it is virtually indestructible. It is created to travel the world and not to sit in a safe and secure confine of a well-protected harbor. In fact, efficiency experts declare that the Aircraft Battle Groups lifespan is extended through its use. The enormous capital and manpower employed is for one purpose and one purpose only to have a fully transportable and functionally mobile airport on demand. Its raison-d'etre to serve at the pleasure of the President and the United States of America anytime, anyplace, and anywhere.

David Lamb replies:

As I have had zero experience out at sea, in a ship, or anything having to do with the ocean, I should just be quiet during this vein of discussion. However, I/we just returned from Coronado Island, San Diego yesterday and I had a most enlightening discussion with a 20-year fishing veteran.

Saturday morning, like any other morning, I woke up rather early. I am on Arizona trading time. So, finding myself in a hotel room with the wife and kids still sleeping I decided to follow instructions by leaving the room if I woke up too early.

The Hotel Del Coronado is a magnificent place to stay. The backyard is the beach, and being such I walked out of the room, down a little sidewalk, and onto the beach. Immediately I saw a small group of fly fishermen about knee-deep in the ocean, doing the 10:00-2:00 motion. I walked along the beach for awhile until I came upon a little cluster of rocks protruding out of the beach. In the middle of this little cluster I saw a white hat bobbing up and down. As I got closer I saw that it was a smaller man (about 5'0" tall), wearing rubber overalls, with a t-shirt underneath, along with that white hat. I saw him scrapping a rock with a long knife-like tool. Being the nosey person that I am I traversed the jagged rocks to make it toward this man to find out what he was doing.

As I approached him he turned toward me and yelled out a "Good Morning", in a Pilipino accent. He possessed a weathered face, friendly eyes and voice, and a small go-tee. I decided to ask him what he was doing. He started out his explanation to me by pointing out that small group of fly-fisherman I noticed before. The following is the gist of what he explained to me.

I have been fishing here for 20 years! I have experienced it all. Those people fly fishing over there are not doing it right. It's the wrong time of the day to fly fish; the wrong time of year; and they are probably using the wrong kind of flies (I noticed a little smirk coming from the go-tee). (He then rattled off all the kinds of fish that MAY bite the fly out there but, to him, it was the most difficult way to fish.) If you want to catch fish out here (he than rattled off some more names of fish, with their applicable sizes) this is what you need to use.

He started to scrape the mussels from off the rock where he was standing with that knife-like tool he had. He said, "Nature provides its own bait, if you study the surroundings; if you just do a little work. You see, I have in this bucket two days worth of bait. This will land me and my wife about 100 pounds of fish in those two days.

He then explained how to use this bait, after my incessant prodding, and everything he knew about this type of fishing. He talked for about 20 more minutes and I walked away with a great appreciation for him and his knowledge.

In this experience with the ocean I learned many things. Not the least of which was the fact that experience, hard work, and persistence was the key to this man's wealth of knowledge. I am sure these same qualities can be of use to me in my trading endeavor.

Marlowe Cassetti replies:

With this nautical theme talk and the art of speculation reminds me of the following quote:

If the highest aim of a captain were to preserve his ship, he would keep it in port forever

-St. Thomas Aquinas (Scholastic philosopher and theologian, 1225-1274)

It's all about risk, isn't it?

The President of the Old Speculators' Club replies:

Sailboat racing is among the most boring of spectator sports. For participants it's another matter. Now the racing I'm speaking of is not the America Cup's version. That's strictly a series of one-on-one races where skill plays a huge part but as recent competitions have shown, the winner generally is the boat with superior design and equipment. This isn't all bad. But frequently the best helmsman and/or best crew does not receive the top prize. This is overcome in one-design (every boat comes from the same mould, has the same hardware, has specifically mandated gross tonnage, has sails cut to identical specs, and the combined weight of the entire crew falls within narrow parameters.) One-design regatta racing usually sees the cream rise to the top as results are almost entirely due to the efforts of helm and crew (luck is almost always a factor, sometimes small, sometimes great). Regattas I'm familiar with can have as few as three races and as many as 15. Scores are cumulative with competitors allowed to "throw out" a given number of poor performances (e.g., in a 7 race regatta you may be able to toss your two poorest finishes).

As in golf, the lowest score wins. With the exception of first place, your finishing position determines the number of points you receive - the first place finisher receives 3/4 of a point - that 1/4 point can make a huge difference in a close regatta. And, again as in golf, the overall winner may never have finished a race in the top two or three spots.

It's more important to be consistently good than occasionally great. With rare exceptions everyone starts on a starboard tack (left side rail in the water, right side rail out); boats on this tack have the right-of-way. Unfortunately, the starting line is not overly long and collisions aren't unusual. As long as you're not involved this is a good thing, as "protest flags" are immediately hoisted, and, later, several competitors will be disqualified; it's a good thing if all those disqualified finished ahead of you.

Unfortunately, in a regatta with 30-40 boats all starting at the same time, it's not unusual to be buried by several (or many) boats that timed their start better. The first goal is to get to clear air. This generally means going over on a port tack and heading for the far right side of the course. Once clear, a new strategy must be developed For the average crew, sailing from the rear offers a no-brainer strategy: take the opposite tack as that of the lead boats. When they tack left, you tack right; you are literally taking the opposite side of the course at every opportunity. Your hope is that you'll catch a wind shift which will "lift" your course up towards the first buoy, while that same wind will "knock" the other boats off their course to the buoy.

This is generally a losing proposition, though, as the leaders (generally possessing far greater skills) will also be looking for these shifts and tack when they crop up. If they happen to be in a different wind pattern and see the trailing boat making up distance on the other tack, they will frequently tack also and sail for the "new" wind - more often, though, they will hold their course to make sure the shift is a permanent one and not a temporary fluke; more times than not this is the case, and your distance behind the leaders has grown significantly.

Better sailors, while not dismissing a big wind shift should it occur, content themselves with the knowledge that it's a long race and while the wind remains steady they'll slowly pass up their less gifted competitors. The starting leg is just one of eight and a boat handled with skill will grind down those that make occasional mistakes. After a fair start and sailing from the middle of the fleet, the strategy isn't much different. The one thing that must be guarded against, though, is the big wind shift that the trailing boats are looking for. They do occur and depending on the body of water (Lake Geneva in Wisconsin is notorious), can be frequent and substantial. The only ways to learn this are to grab local talent for a crew spot (a bad idea for a variety of reasons), get tips from the club members and other sailors (good luck), sail the lake beforehand (rarely doable), or find out who the best local boats are and shadow one of them (and have the others watched) from the 10-minute warning gun (this is an iffy proposition which fragments the crew's attention and puts you at risk of picking a favorite on one of his off days).Summary: your on your own...adapt.

Sailing from the front isn't as great as it may seem, though it beats the alternatives. First, you can be sure that most of the boats close to you are populated by the best helmsmen, crews, and strategists - one screw up and they're all by you. Secondly, these fine sailors will be on split tacks.

Some will be going left with you, others will head right. It's impossible to cover the fleet so the best you can do is tack on the shifts (here I'm speaking of minor shifts of several degrees and that last for several minutes).

But here's where keeping an eye on the local rock stars can really help. If one (or more) of them hangs way out left when everyone else is back towards the middle or going right, be prepared to tack quickly. For the most part, though, you're going to use your skills as best as possible, don't do anything stupid to pick up one position, and don't foul anybody. Remember the prime directive: "you don't ever have to finish first to win the regatta."

A comment on the weather gauge. When an opponent's boat is between you and the wind, he is said to have the weather gauge. He will tack whenever you do to maintain this advantage - it's advantageous because whatever shifts come, it cannot benefit you anymore than it does your opponent and his lead is maintained. But that's true only on the upwind legs (beats); on the downwind legs (runs), the boat with the weather gauge is in last place. If the boat immediately behind

You can blanket your sails with his, you'll die in the water as he cruises by. It's essential then to learn how to maintain your position whether the wind's at your back or in your face. Final word on helmsman and crew. Unless there is a strategist on board, the responsibility for winning or losing is the helmsman's alone. Sails will rip and booms will bust but the guy who gets the trophies also gets the blame.

Dr. David Brooks replies:

Interestingly, I think this is a trope that can be applied to many endeavors - surgery, for instance. Much of what you said struck me as truth. At each turn we are faced with the unknown and the unpredictable. Much, indeed most, comes and goes with routine and regularity, but one must always be on the alert for the unexpected, the different, the evil. And so we do things "the same way, every time" so that routine protects us in a small way from the unexpected.

Our lines of authority are strictly drawn (but becoming less so now that Federal forces have pushed their noses under the tent of resident training), we have great respect for our enemy (disease) and its immense power to confound us and overwhelm our best efforts. We are extraordinarily attentive to detail. I would like to believe we are cheerfully optimistic but also realistic, and when the tide of battle is turning against us, we accept the superiority of our enemy and support our troops with kindness and empathy.

Dr. David Brooks is Director of Laporospic Surgery at Brigham Hospital in Cambridge, MA.

More writings by Victor Niederhoffer