Letters from Liam

Yuan Me... Forever

Thu, 24 May 2012 09:53:08 -0400

From: Liam Prescott <liam.j.prescott88@gmail.com>
Date: Mon, Dec 26, 2011 at 12:43 PM
Subject: Re: Re: Introduction: Liam - Day Nineteen
To: xxxxx@gmail.com, acohen@——-.com

Mr. Cohen,

Now that the holidays have wrapped up, let’s get back to business, shall we? I generally need only about 24 hours of unbridled vacation time before I experience a full recovery and begin chomping at the bit to throw myself back into the fray. Beyond that brief recovery period, idle time represents only opportunities lost and self-improvement delayed. Therefore, it was with great enthusiasm that I came across the attached article authored by Lingling Wei and Bob Davis from this morning’s Wall Street Journal. It doesn’t take George Soros, that puppet master of foreign exchange, to deduce that China’s heretofore iron grip on its currency, the renminbi (or, more familiarly, the “yuan”) is slowly loosening, which will likely spawn an entirely new market in the yuan in the near future. For all the jaundiced hand-wringing over the relative value of the yuan to the U.S. dollar and its concurrent impact upon the Chinese and American economies, there is nothing that seems more like a win-win for market participants like us than the prospect of placing this bloated instrument under the microscope of the financial markets. Given the opportunity, keen market observers will profit, and the relative price of the yuan will be pushed down to normal levels. While surely this transition will take time (far longer than it ought to, in this observer’s casual opinion), it provides financial gurus like you and I to begin “sharpening the axe” so to speak (to recall a recent analogy) in order to prepare ourselves for one of the major economic events of our generation.

You see, Adam, the opening up of this market will quickly give rise to an explosion of financial instruments seeking to better accommodate the role of an ascendant China in the world economy. Look no further than the similar proliferation of financial instruments that accompanied the introduction (and destruction?) of the Euro. Sharp minds will draw the parallel almost subconsciously, conjuring images of the market’s bright future like so many sugar plums dancing in childrens’ heads on Christmas Eve. While this market is still in its infancy, I offer to you the following modest proposition. Hire me at ——- Financial LLC to work alongside you trading currency instruments as this market develops. In time, we can both take advantage of the rise of this new markets, and perhaps I can find a permanent place in the yuan pit (as I imagine it shall likely be called). This will provide both of us with outsized value both in the short-term and the long-term, as we form a similar pact trading the world’s alternative currencies. What say you to my bold proposal? After eighteen days of writing to you, I have surely proposed a course of action that should be recognized as a clear expression of value. While I have no doubt that you have had similar visions of our future together, I am sure that the unrealized reality described above paints the clearest picture. Let’s get together at some point this week to begin plotting a course towards this promising future.

Warm regards,

Liam

http://online.wsj.com/article/SB10001424052970203391104577121983605242196.html?mod=WSJ

The Ghosts of Finance Past, Present & Future

Wed, 23 May 2012 21:02:21 -0400

From: Liam Prescott <liam.j.prescott88@gmail.com>
Date: Sun, Dec 25, 2011 at 1:54 PM
Subject: Re: Re: Introduction: Liam - Day Eighteen
To: xxxxx@gmail.com, acohen@——-.com

Mr. Cohen,

In the diverse melting pot that is America, Christmas should no longer be considered to be a sectarian holiday. It is now a shared tradition that unites the masses in a secular manner, more akin to the Fourth of July or Thanksgiving than its actual meaning as the celebration of the birth of Jesus Christ. With that, I heartily wish you and yours a very Merry Christmas! Among we Christians, every family has a Christmas tradition. In my family, we attend midnight mass on Christmas Eve, open one present before bed, and then wake up early to have a hearty breakfast of pancakes and ham. More peculiarly, we have a tradition of watching the movie adaptation of Charles Dickens’ Christmas Story where the protagonist Ebenezer Scrooge is visited in sequence by the ghosts of Christmas Past, Present and Future. As a result of these encounters, the protagonist has an epiphany regarding the state of their life and resolves to make changes to their current course. As should of no surprise to you, I immediately recognized the applicability of this tri-partite concept to the financial markets.

Indeed, we in the financial world all must reckon with the specters of the immediate past, present, and future in any investment decision that we undertake (only we lack the benefit of a contemporaneous conversation with an omniscient ghost of the markets to point us in the right direction). Indeed, we are still haunted by the ghosts of the financial markets past (played here by former Lehman CEO Dick Fuld), which has lamentably convinced the overzealous regulators in Washington that the financial markets are inherently destructive influence rather than an enabler of American innovation (they would do well to read up on Schumpeter’s theory of creative destruction). The ghost of financial markets present (Mario Draghi, President of the ECB) who tells a tale of the struggle to preserve Europe’s fragile monetary union in the face of self-interested and parochial nations. Finally, the ghost of financial markets future (represented by the personification of the futures market itself!), which tells of a world rocked by continued uncertainty and volatility unless we collectively decide to return to the days when the financial sector was an ally of progress, not its. As you can readily see, in our business the past, present, and future are all highly interrelated, both in underlying fundamentals and market psychology. The lessons are no doubt clear: to understand the markets you must be steeped in its history and yet be able to divorce from the subjective draw of prosaic explanations; to immerse oneself in the market and yet be able to swim against the current. For in truth, only the true contrarians shall be able to harness the energy of the markets to generate outsized alpha profits without being snookered by the conventional wisdom on the Street which rarely consists of more than mere “infotainment”.

It is my Christmas wish that the ghosts of financial markets future are so generous as to see me trading beside you at ——- Financial LLC. Hopefully, you can see how such a future would be financially superior to your current course. I hope that we will be able to discuss soon.

Happy holidays and warm regards,

Liam

Gift of the Magi - A Biblical ETF

Wed, 23 May 2012 17:02:59 -0400

From: Liam Prescott <liam.j.prescott88@gmail.com>
Date: Sat, Dec 24, 2011 at 10:54 AM
Subject: Re: Re: Introduction: Liam - Day Seventeen
To: xxxxx@gmail.com, acohen@——-.com

Mr. Cohen,

Christmas Eve is a time for reflection upon tradition and upon the gifts passed down from earlier generations. A particular favorite in my family is the construction of a traditional nativity crèche (or nativity scene), complete with farmland hay and the traditional inhabitants of the manger scene, the baby Jesus, the Virgin Mary, Joseph (Jesus’ other father), and the three wise men. This year the biblical magi got me to thinking about the nature of fiat currency. As you will recall, in the time of King Herod, after Jesus was born in Bethlehem, three wise men from the East came to Jerusalem, bearing gifts of gold, frankincense, and myrrh. It is worth noting that the wise men did not bring currency of any kind, even though the Roman denarii was the legal tender of Judea as a part of the expansive Roman Empire at the time. The gold, frankincense, and myrrh were of value in any of the cultures that the three kings hailed from. I need not draw the obvious parallel to our modern times, where the world’s currencies appear in a race towards devaluation. Gazing out upon the family crèche, I resolved to limit my currency exposure and into value-retaining commodities such as gold (perhaps for the sake of tradition, we could launch an exchange-traded fund (“ETF”) focused upon frankincense and myrrh as well!). A quick side note: even two thousand years ago the wise knew enough to diversify their holdings (a lesson indeed to all those gold bugs out there) with a literal basket of alternative investments, a wealth-building thesis fit for a king!

I hope that this vacation has allowed you to obtain some much-needed rest from the vigors of the 2011 market. I hope that your efforts are recognized with a deservedly large bonus. I hope that I might be so fortunate in 2012, if you are willing, in the spirit of the season, to spend fifteen short minutes with me evaluating the contributions I could offer your prestigious organization. As you can see, I offer unique perspectives on seemingly ordinary topics such as nativity scenes and biblical passages. Please allow yourself to imagine the value of applying an inquiring mind to some of your more difficult investment quandaries. I hope that you, like the three wise men of old, will recognize a sound investment when you see it.

Happy holidays and warm regards.

Your friend,

Liam

Gift of the Magi - A Biblical ETF

Wed, 23 May 2012 17:02:58 -0400

An Advent Calendar of Insights

Wed, 23 May 2012 15:13:26 -0400

From: Liam Prescott <liam.j.prescott88@gmail.com>
Date: Fri, Dec 23, 2011 at 5:20 PM
Subject: Re: Re: Introduction: Liam - Day Sixteen
To: xxxxx@gmail.com, acohen@——-.com

Mr. Cohen,

A happy holidays to you from Dixie! I must say, the only drawback to coming down to Charleston is the necessity to switch planes in Philadelphia. For the birthplace of the Republic, that airport and city in general have truly fallen from grace. That said, I was seated next to a particularly attractive girl who happened to have gone to Dartmouth. Small world, isn’t it? She did not happen to know you (being a graduate of the Class of 2008), but she said she may have known some of your teammates on the lacrosse team. I was a little disappointed when she revealed that she was currently in Teach for America and had little good to say about the financial world. I would have thought that someone with her pedigree would have been a little more open-minded, but I could have swapped her out with any of the talking heads on MSNBC without noticing a difference. It only reminded me that minds like yours and mine are rare. It would be a true shame if we were not able to connect at some point to exchange ideas and insights in a mutually beneficial manner.

I realize that I am now at the halfway mark of my month-long journey to convince you that I will provide sufficient value as to merit an interview with ——- Financial LLC. I imagine that my messages have become something like an advent calendar. In the Christian tradition, an advent calendar is a calendar in which each day in December up until Christmas is represented by a small container. Every morning until Christmas Day the corresponding day is opened, revealing a candy, chocolate, or a trinket such as a Christmas ornament that can be used to be hung on a Christmas tree. The opening of each day’s miniature present brings delight and joy to the children or family opening it. We are now on day 15 and already you have opened 15 days worth of valuable insights, hilarious anecdotes, and thought-provoking original dialogue. Just imagine what an ongoing work relationship could bring. Every day would bring value like this. I hope that you are enjoying reading these emails as much as I enjoy composing them. I often find myself having to cut myself off, rather than overburden you with prose. I hope a conversation would allow us to delve into these topics deeper. Let’s meet for a drink following Christmas to discuss.

Warm regards,

Liam

We're Talking About Unchecked Aggression Here

Wed, 02 May 2012 09:36:00 -0400

From: Liam Prescott <liam.j.prescott88@gmail.com>
Date: Thu, Dec 22, 2011 at 3:46 PM
Subject: Re: Re: Introduction: Liam - Day Fifteen
To: xxxxx@gmail.com, acohen@——-.com

Mr. Cohen,

I imagine that you are having a lovely holiday break. Hopefully you have already (or are soon to) escaped Chicago for warmer climes. I count myself among the lucky ones, heading down to South Carolina to visit my parents at our river house near Charlestown. If it weren’t for my passion for the financial markets it would be all too easy to see myself spending much more time down there, golfing, playing tennis, and chasing Southern belles! Alas, living among the masses in the colder cities of the Northeast and Midwest is simply the price we must pay in order to play in the rough-and-tumble world of high finance.

Although I am sure you have seen it, I thought I would bring to your attention something particularly laughable (though simultaneously regrettable) issued by our daddy-knows-best administration. The SEC outrageously just amended its rules to exclude the value of a person’s home from net worth calculations used to determine whether an individual may invest in unregistered securities offerings. Consider that this entire rule rests upon the ill-conceived assumption that those with a high net worth (here, $1,000,000) are better equipped than others to evaluate the risks of a given investment. While I would certainly agree that those with more money are generally more intelligent than those with lesser financial resources when it comes to investing, there is no good reason to apply an across- the board limitation to the availability of the most promising investments to those with only a certain level of net worth with which to invest. I, for example, would love to invest in biotechnology or social media startups that seem promising, yet would be precluded because I was not an “accredited investor”. This keeps financial mavericks like you and I from participating in the funding of new enterprise and raises the cost of capital associated with early stage investment. This rule only ensures that even less funding will be available for the true entrepreneurs of our economy who turn ideas into jobs. Consider the double-whammy of the implosion of housing prices and you can see that fewer and fewer individuals will be able to fuel the engines of the American economic recovery. So, while the Obama administration may rant and rave about the ability of a meager payroll tax cut extension to spur job creation, they cannot honestly be said to be taking steps to grow our economy. I suppose that most will ignore this act of aggression upon the markets (especially given its proximity to the impending holiday season), but I assure you that measures like these do not escape my attention. The net benefit to you is that I not only keep myself aware of actions by the government that may affect returns, but their implications upon various investment strategies. Perhaps we could convene following the holiday to discuss how other government actions might distort market forces in a manner that we may capitalize upon as part of a trading team at ——- Financial LLC. Please let me know when you would like to discuss these matters, and more, in person.

I look forward to your response when you come across a spare moment.

Warm regards,

Liam

On Religious Diversity and the Felling of Trees

Tue, 01 May 2012 13:25:00 -0400

From: Liam Prescott <liam.j.prescott88@gmail.com>
Date: Wed, Dec 21, 2011 at 12:07 PM
Subject: Re: Re: Introduction: Liam - Day Fourteen - Happy Hannukah
To: xxxxx@gmail.com, acohen@——-.com

Mr. Cohen,

I hope the first night of Hannukah was a pleasant one. While I, personally, am not Jewish, I sincerely respect those who are. Indeed, some of my brightest colleagues at The Ohio State University were in fact Jewish. Not only that, but I count myself as a staunch supporter of the State of Israel, one of our proudest and truest allies. As a nation, we are indisputably better for our commitment to diversity. By openly embracing tolerance, the best and brightest compete on an even playing field, thus propelling all forward at greater speeds much like a team of Olympic rowers sculling towards a better future. Few other countries could make a similar claim with a straight face. Here in America, the promise of social mobility is unimpeded by artificial barriers such as race and religion. I think we all can, and should, be thankful for that.

I know that this is historically a slow week in the markets. However, I expect that the absence of high volatility due to the holiday season is a good time to strategize for the coming year. For example, what will be the driving factors of volatility in 2012? Can we recognize opportunities before they materialize and, thus, be in a position to reap the rewards of a first-mover? I say that we can. As Abraham Lincoln famously said, “If I had 5 hours to cut down a tree, I would spend the first 4 hours sharpening the axe.” That saying applies equally to the financial markets as it does to felling timber. Major market movers I see in 2012 are, in no particular order, the consideration and acceptance of the fabled QE3, the fallout from a disappointing post-holiday season sales report, the final negotiations that either save or doom the Euro, and the obvious implications of the 2012 Congressional and Presidential elections. As you can see, I stand ready, sharpened axe in hand, to exploit movements in the market as they happen, rather than in a reactive posture. A man of your position can surely appreciate this level of effort. Indeed, having a trading team that accounts for these contingencies is a value in and of itself. If you are so kind as to grant me fifteen minutes of your time perhaps you would realize the value that I may bring to you and your team at ——- Financial LLC. I hope that these slower times in the market will allow you to consider my modest request. As I have said more artfully elsewhere, what do you really have to lose? Fifteen short minutes could very well change the course of the rest of our lives.

I hope all is well with you and I look forward to your response.

Warm regards,

Liam

Shared Thoughts - Independently Derived - Among the Rational Elite

Tue, 01 May 2012 13:23:01 -0400

From: Liam Prescott <liam.j.prescott88@gmail.com>
Date: Tue, Dec 20, 2011 at 2:01 PM
Subject: Re: Re: Introduction: Liam - Day Thirteen
To: xxxxx@gmail.com, acohen@——-.com

Mr. Cohen,

I trust that you are well. Apologies for being a bit long-winded yesterday. I was simply floored by the government’s continued efforts to unduly interfere with the free operation of the markets. I did feel a bit vindicated when I saw that, in the Wall Street Journal this morning, AT&T Chief Executive Randall Stephenson expressed his belief that the government “should allow the free markets to work.” While I share his disappointment in the failure of the potentially lucrative deal, and about the general direction of financial engineering exhibited by the government generally, I feel some satisfaction that my independently-derived thoughts and theories are shared by elite executives such as Mr. Stephenson. I am sure similar thoughts crossed your mind. Perhaps the rational elite will finally succeed at turning back the tide of over-regulation that has been pervasive in the Obama Administration. We all have our dreams, don’t we?

I hope that we can discuss these topics and more over coffee in the near future.

Happy holidays,

Liam

Gordon Gecko on the AT&T/T-Mobile Merger Murder

Sat, 28 Apr 2012 10:03:50 -0400

From: Liam Prescott <liam.j.prescott88@gmail.com>
Date: Mon, Dec 19, 2011 at 4:44 PM
Subject: Re: Re: Introduction: Liam - Day Twelve
To: xxxxx@gmail.com, acohen@——-.com

Mr. Cohen,

Well, they finally did it. The AT&T - T-Mobile merger is officially dead. Let the word go out to friend and foe alike, that if you are in need of scale economies in order to remain competitive in a national market don’t go hoping the government is going to assist you in your efforts. It is one thing for the government to distort markets through ham-handed regulation, but quite another to actively destroy a private entity’s ability to compete by denying them the right to build a sufficient economic rationale for additional infrastructure deployment and competition. While I am AT&T partisan (just try viewing your stock portfolio on an iPhone while in the Loop), the federal government’s intrusion into the markets in this manner is nothing short of outrageous. Where are the self-righteous protestors now? Do they not realize that their own access to services will suffer? Do they not oppose the use of the government veto to infringe on a private transaction? Alas, I suppose the government knows better than two of the largest and most successful market participants, and all else be eternally damned. Obamageddon, indeed.

Lest you be mistaken, I am not a political animal. I don’t think anyone who wants to truly understand markets can adhere to any particular political dogma. It clouds the mind from seeing the true underlying dynamic, making it more difficult to act quickly and decisively upon a particular strategy. The successful trader must have only one value in mind: profit. Nothing else matters. The famous line from Wall Street, uttered by Gordon Gekko that “Greed is good” is often disparaged as epitomizing the worst of the financial profession. Sure, standing alone, that line sounds objectionable. But how about a little context (as the people generally quoting this line in derision incessantly whine for when their ideas are mocked)? What the simple-minded fail to recognize is the rest of the line:

Greed is right, greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms; greed for life, for money, for love, knowledge has marked the upward surge of mankind. And greed, you mark my words, will not only save Teldar Paper, but that other malfunctioning corporation called the USA.

Do you see anything wrong with that idea? For the life of me, I cannot. Why even argue that pursuing a given goal for financial reasons is a bad thing when it creates value for all along the way? Economic efficiency is the answer and we must be its prophets. As you can see, values like these would be very valuable to any potential employer. I trust that you can see that my motivations can be put to good use at ——- Financial LLC and I ask simply that you give me 15 minutes to meet in order to prove to you that it would be in your interests to bring me on to your team. I still await your response.

Warm regards,

Liam

On the Use of Jiu-Jitsui Against Sacred Cows

Fri, 27 Apr 2012 10:02:06 -0400

From: Liam Prescott <liam.j.prescott88@gmail.com>
Date: Sun, Dec 18, 2011 at 4:44 PM
Subject: Re: Re: Introduction: Liam - Day Eleven
To: xxxxx@gmail.com, acohen@——-.com

Mr. Cohen,

Thus closes the first ten days of my quest to obtain a meeting with you. As you can see, I am dedicated to this cause. If, as expected, you consider my approach genuinely unorthodox then I believe I have accomplished at least some portion of my objective. However, I will continue to make good on my initial promise to you that I will objectively demonstrate my worth through the use of regular and insightful communications.

While jogging along the lakefront earlier this afternoon, I found myself musing on the efficient market hypothesis that we have all been taught is the bedrock of the academic understanding of financial markets. Obviously I need not tell a successful and experienced trader such as yourself that such a theory is laughable on its face. Efficiency is not magically created by some mythical efficiency fairy, it is manufactured by entrepreneurial individuals like you and I, who risk capital to profit upon the divergent values various parties assign to the same underlying instrument. That much, I believe, is fairly obvious. What I find especially interesting (and potentially lucrative to traders like us) is the fact that much of the world still subscribes to this primitive worldview, thereby creating opportunities for practitioners to profit from a better understanding of the markets’ true dynamics. Perhaps it is the tidiness of the theory that makes it so facially appealing to those possessing a gullible intellect. Alternatively, perhaps it is the orthodoxy itself that garners adherents among the sheepish. That is, because it enjoys a position as the dominant expression of market theory, ignorant participants welcomingly accept the party line as incontrovertible truth. Either way, it exposes an intellectual laziness that would be troubling if not for the fact that sharper wits like us might use a little intellectual jiu-jitsu to allow their assumptions to create profitable opportunities for the so-called “non-believers”.

As you can see, I am always thinking. And like Steve Jobs once said, if you are going to be thinking anyways, why not think big. And what could be bigger than thinking about which sacred cows appear ripest for the slaughter? It is my firm belief that questioning existing assumptions leads to the development of profitable trading strategies. I fully expect that you share my belief. As a result, I think it would be mutually beneficial to have a conversation where we can further develop these concepts into alpha-producing strategies at ——- Financial LLC. What do you think of these ideas? Does this outlook align with your worldview? We can discuss these questions and more over coffee this week if you have availability.

I look forward to your response.

Warm regards,

Liam

A Gourmand on Artisanal Cheeses and Value Creation

Thu, 26 Apr 2012 11:03:33 -0400

From: Liam Prescott <liam.j.prescott88@gmail.com>
Date: Sat, Dec 17, 2011 at 2:45 PM
Subject: Re: Re: Introduction: Liam - Day Ten
To: xxxxx@gmail.com

Mr. Cohen,

I am sorry that you were unable to join me at Publican last night for a drink. If I was the least bit unclear about my endorsement of this establishment let me clarify that it is one of the better restaurants that I have ever encountered, and I have made it a mission to discover hidden treasures of the culinary scene for several years. Lest you be mistaken, I do not consider myself a “foodie.” To me, the term conjures up images of ridiculously tattooed and horn-rimmed glasses-wearing hipsters who simultaneously decry the “wicked 1%” while indulging in artisanal cheeses and meats that would be entirely unavailable save for the effort of capitalistic entrepreneurs who bridge the gap between supply and demand. They benefit immensely from the fruits of others’ labor without the slightest hint of self-awareness that their enjoyment is the purest embodiment of value creation at work.

Unlike these self-righteous hypocrites, I consider myself a gourmand. The difference being that I appreciate the effort it takes to unearth hidden value and then present that excellence to the world that have previously overlooked it. In my humble opinion, this world needs less foodies and more gourmands. I am sure you would agree that this casual observation applies broadly throughout society in general and the financial markets in particular. Even if I am never so lucky as to ever speak to you, please do yourself a favor and pay the Publican a visit. If you are so inclined I would be happy to treat you to a drink at the establishment in exchange for 15 minutes of your time. If I cannot convince you during the meeting that we would mutually benefit from a partnership then you will have lost little more than an hour of your time. By contrast, if you find that I would add value to you and your team at ——- Financial LLC, then surely such a meeting would have substantial upside. I am confident that if such an opportunity presented itself in the financial markets you would consider it a fairly asymmetric trade and move quickly to take advantage of it. I sincerely hope and expect that you will apply a similar analysis here.

Please let me know if this offer is acceptable to you.

Warm regards,

Liam

Why Foodies are Secret Value Investors

Wed, 25 Apr 2012 11:46:13 -0400

From: Liam Prescott <liam.j.prescott88@gmail.com>
Date: Fri, Dec 16, 2011 at 4:58 PM
Subject: Re: Re: Introduction: Liam - Day Nine
To: xxxxx@gmail.com, acohen@——-.com

Mr. Cohen,

Happy Friday to you. I sincerely hope that this week was indeed a lucrative one. I cannot imagine that, given the volatility within the markets that it could have been anything but. Allow me to err on the side of presumptuousness and offer you a hearty and heartfelt congratulations. In either event, I hope that you have a good weekend as well.

You must pardon the brevity of this message as I am preparing to go out on a date with a girl I recently met and need to hustle to the flower shop before it closes up for the evening. We will be dining at the Publican restaurant, west of the Loop, which I must take the time to recommend here. If there is one favor that I may do for you, it is to spend an evening at this establishment. I fully anticipate that you will thank me later. I think it fairly obvious to you by now that I enjoy the finer things in life, much as I expect that you do. It is also apparent that I am an excellent finder of value. Discovering new and exciting restaurants such as the Publican allows me to combine these two gifts in a manner that allows not only for great dining experiences, but as a great way to impress a date! Not to belabor an obvious analogy, but a combination for a passion for discovering hidden value and an appreciation for that underlying value is a trait that would serve us both well in our shared quest for alpha-level returns. Perhaps a meeting over drinks at the Publican could further convince you that I truly possess these valuable traits. We will be there from 7 until 8 for drinks before our 8:15 PM reservation. If you are so inclined, I hope to see you there.

Until tomorrow.

Warm regards,

Liam

On Words and Bonds, Both Valuable Assets

Tue, 24 Apr 2012 11:03:53 -0400

From: Liam Prescott <liam.j.prescott88@gmail.com>
Date: Thu, Dec 15, 2011 at 7:00 PM
Subject: Re: Re: Introduction: Liam - Day Eight
To: xxxxx@gmail.com, acohen@——-.com

Mr. Cohen,

Every day I awake and, like a child on Christmas morning, rush to my computer to see if you have chosen to respond to my thoughtful and heartfelt messages. Despite my sincere disappointment that I have not yet received a response from you, I tell myself that I have made a personal commitment to you and to myself that I would contact you for at least thirty straight days in order to demonstrate my valuable inner qualities of desire, perseverance, and ambition. I commit to you once again, here and now, that I will not cease my efforts until I have convinced you to engage me in a conversation concerning a potential position in your trading group at ——- Financial LLC. As you can see, my word is my bond, and just like a bond it has value.

As I sit here, watching CNBC covering yet again the supposedly nonpartisan Congressional Budget Office (“CBO”) economic equality study, I cannot help growing increasingly frustrated at the portrayal of the so-called 1% as somehow undeserving of their position at the top of economic pyramid. These are individuals who have through their own efforts, and yes, perhaps some inherent advantage, nonetheless thrived in an economy where global scale allows economic advantage to accrue to those with the best ideas and those who accept the challenge of constant innovation. And the argument is that the reward for their excellence is additional taxation as well as the tag of social pariah? While I am no member of the so-called 1%, I am striving to crack into that elite company. I am sure that you do not receive emails from hundreds of individuals on a daily basis striving to join you in your profitable enterprise. No, only those with the drive to succeed shall succeed. In that sense, I am the 1%, the 1% willing to work hard enough to inhabit that rarefied air. By now you can surely see my sincere desire to put in the hard work necessary to accomplish these objectives. If I am this passionate about merely securing an interview, please allow yourself to imagine how fervently I would attack the job of finding value in this volatile market. I hope that you will take the opportunity to meet with me so that we might discuss how I might assist in your endeavors in a mutually-beneficial manner.

I look forward to your reply.

Warm regards,

Liam

The Mainstream Contrarian

Mon, 23 Apr 2012 11:02:44 -0400

From: Liam Prescott <liam.j.prescott88@gmail.com>
Date: December 14, 2011 6:59:21 PM CST
To: xxxxx@gmail.com, acohen@——-.com
Subject: Re: Re: Introduction: Liam - Day Seven
Mr. Cohen,

I hope that you are well. Knowing how volatile the markets have been lately, I can’t imagine that you have been doing anything but taking profits! I must admit, this is a problem that I one day wish to have. Given the opportunity, I hope that one day I will be able to share wild and potentially lucrative days like this with you.

Ours is a strange profession, indeed, in that we manage to make money both in bear markets as well as in bullish times as long as we are able to remain agile and ready to turn on a trade in an instant. I believe that my intellect is well suited for this profession. There is nothing I enjoy more than slaying the sacred cows of established wisdom. Whereas the bulk of market participants are wed to ideological orthodoxies, I believe that attacking conventional assumptions yields superior returns than simply following the herd. If you have not had the chance to read Michael Lewis’ masterful work of non-fiction, The Big Short, I highly recommend that you heed my advice and allow Mr. Lewis to explain this philosophy in action. While not every trade is worthy of a book, in and of itself, I believe that a trader should always question the collective judgment of the masses and align himself with those truly thinking hard about the underlying assumptions inherent in established positions.

As you can see, I am no mere parrot of the established orthodoxy. Far too often in business school at The Ohio State University I witnessed what can only be called a blind adherence to the myth of the efficient market hypothesis. At first I was a willing adherent to this pseudo-religious dogma, only to reject it fully when my once robust stock portfolio withered like an autumn leaf in September of 2008. I now know that the tidiness of academic theory is a poor substitute for the ordered chaos of the world’s markets. I stand ready to demonstrate my unconventional approach to finance if you would be so kind as to have coffee with me in the near future. I am confident that you will find an equally ambitious partner to help you write what may well be the next The Big Short.

Warm regards,

Liam

Helicopter Ben and the Fabled QE3

Sun, 22 Apr 2012 07:01:24 -0400

From: Liam Prescott <liam.j.prescott88@gmail.com>
Date: December 13, 2011 5:10:21 PM CST
To: xxxxx@gmail.com, acohen@——-.com
Subject: Re: Re: Introduction: Liam - Day Six

Mr. Cohen,

I trust that you received a welcome holiday gift from Mr. Bernanke earlier this afternoon. ‘Tis the season, after all! At the risk of sounding presumptuous, I cannot imagine that the Fed’s decision to temporarily withhold any major pronouncements was not patently obvious to any thoughtful financial enthusiast (and it appears that the markets were not caught entirely unawares, either). As you can see, in anticipation of a future career as a trader at a prestigious financial institution such as ——- Financial LLC I carefully follow all of the events that may move markets. My firm belief is that those who prepare to succeed, even when not embroiled in the day-to-day rigors of the trading pits, will be ready to seize the opportunities that emerge when such opportunities are presented.

While I, like many, were not surprised that Mr. Bernanke chose the course that he did, I remain convinced that the new year will see the issuance of the fabled QE3. Indeed, I have already taken on a number of positions in my personal account that should benefit greatly from another round of monetary magic from Helicopter Ben. It is my sincere hope that both you and I will be able to handsomely profit from this development as partners in the New Year. Perhaps we could arrange a mutually-convenient conversation to discuss the wide-ranging and potentially lucrative implications of my investment thesis and how a mutually beneficial partnership between us may be arranged in time to take advantage of these impending events.

Please inform me if you would like to arrange a meeting in order to develop these ideas further. I look forward to your reply.

Warm regards,

Liam

On Tim Tebow and the 1% with Thoughts on Contagion

Sat, 21 Apr 2012 07:02:58 -0400

From: Liam Prescott <liam.j.prescott88@gmail.com>
Date: Mon, Dec 12, 2011 at 9:48 PM
To: xxxxx@gmail.com
Subject: Re: Re: Introduction: Liam - Day Five

Mr. Cohen,

My sincere apologies for the late hour of this message. I have been cooped up with what I suspect is a nasty virus. It has always been quite frustrating to me when a common bug derails my productivity. I suppose that is the price we pay for living in a city in which great opportunity must coexist with such a sheer mass of humanity! Despite my condition, I was simply unwilling to let a minor setback deter me from my quest to engage you in a meaningful dialogue concerning our shared future at the firm of ——- Financial LLC.

Despite having attended The Ohio State University, with its excellent athletic programs, I have never considered myself much of a sports fan. I personally prefer to actively engage in athletic pursuits myself than derive vicarious satisfaction from the excellence of others. That being said, I don’t think anyone can doubt that the efforts of Tim Tebow over the past several weeks have been nothing short of phenomenal. I find it amusing, however, when the self-proclaimed pundits ascribe his successes to divine intervention. It is telling that most laypeople cannot fathom that excellence can be obtained by any other means other than the Almighty. Those who have experience excellence firsthand know that so-called “miracles” are actually the product of years, if not decades, of hard work. Add a healthy dose of passion to the untold hours spent in preparation and you realize that impossibility is simply a word invented by those who lack the determination to strive for more. When a team of self-selected individuals share these rare traits, there is no limit to what they may accomplish together.

This is my promise to you, Mr. Cohen: if given the opportunity to be a part of your team, I will be the hardest working member of your organization. It is not often that the value that I am offering is freely available and I urge you to thoughtfully consider my outstanding offer. I believe that great teams are built during moments like these and I ask that you simply give me a chance to step onto the playing field. Please let me know if we can arrange a meeting in the near future to discuss my candidacy.

I hope you had a great Monday, I look forward to hearing from you.

Warm regards,

Liam

Why Fitness Enthusiasts Make More Money

Fri, 20 Apr 2012 08:56:01 -0400

From: Liam Prescott <liam.j.prescott88@gmail.com>
Date: Sun, Dec 11, 2011 at 1:07 PM
Subject: Re: Re: Introduction: Liam - Day Four
To: “xxxxx@gmail.com” <xxxxx@gmail.com>

Mr. Cohen,

I trust that you had a wonderful Saturday. Mine was both relaxing and productive. Perhaps the best part about the cold weather this time of year is that the lakefront running trails in Chicago are virtually deserted. Only the true fitness enthusiasts can be found. That is the type of crowd I prefer to surround myself with, those self-motivated enough to be elite. That self-selection of motivated individuals, I believe, is what people just don’t get about our chosen profession. Those with the drive and passion to succeed will benefit monetarily, while those unwilling to put in all the early mornings and late nights simply will not.

How anyone could find this amazingly efficient system to be “unfair” simply astounds me. I mention this fact not to make an obvious political point, but to convincingly demonstrate to you that I know what it takes to be elite. I harbor no allusions that my success will come from anything other than my own sweat equity. Given the opportunity, I am confident that I will provide this value to you. I trust that these messages are beginning to persuade just how mutually beneficial a potential partnership between us could be. Perhaps we could discuss this further over coffee this week? Please provide me with a convenient time and place to meet and I will be sure to be there.

All my best for a successful week ahead. I hope to hear from you.

Warm regards,

Liam

Saturdays Are For Taking Stock

Thu, 19 Apr 2012 08:14:45 -0400

From: Liam Prescott <liam.j.prescott88@gmail.com>
Date: Sat, Dec 10, 2011 at 1:16 PM
Subject: Re: Re: Introduction: Liam - Day Three
To: “xxxxx@gmail.com” <xxxxx@gmail.com>

Mr. Cohen,

I hope you are having a nice and relaxing weekend after what I am sure was a hectic week in the markets. The weekends, Saturday in particular, are when I like to pause and take stock of what I have accomplished during the course of the week. Sunday, on the other hand, is more forward-looking in nature, where I set goals for myself to accomplish in the week to come. This week, I believe, may end up being one of the more important weeks in my life. That is because I have dedicated myself to the task of proving to you that I deserve a chance to become your partner at ——- Financial LLC.

I doubt that most people realize that business is really a “people-person” game. As you are aware, the markets are not some abstract entity, blindly exchanging financial instruments. No, the markets are about interpersonal interactions that are often build upon layers of trust and past history, which inform and lend predictability to what might otherwise appear opaque and unknowable. As a “people-person” myself, I believe that my ability to read people and form instant connections will allow me to quickly gain insight into the tumultuous maelstrom of personalities and institutions that are the markets. Perhaps a meeting would convince you that I possess this valuable trait. That, in addition to my proven tenacity and perseverance, would make me a formidable ally in what should ultimately be a dynamic and exciting partnership between us. You need not take my word for it, as I place the judgment squarely in your hands. I hope that you will not only entertain, but accept, this promising offer.

Enjoy the weekend. I hope that you are well.

Warm regards on this cold day,

Liam

On European Debt and the Spirit of Mutual Cooperation

Wed, 18 Apr 2012 15:40:38 -0400

From: Liam Prescott <liam.j.prescott88@gmail.com>
Date: Fri, Dec 9, 2011 at 12:20 PM
Subject: Re: Introduction: Liam - Day Two
To: “xxxxx@gmail.com” <xxxxx@gmail.com>

Mr. Cohen,

A happy Friday to you, and so closes the first week of my attempt to engage you in a fruitful dialogue concerning a potential financial partnership between us at ——- Financial LLC. However, I know that as a trader of world currencies and futures, the work-week is never truly over. As the sun sets in London so too does it rise in Tokyo, fresh with new markets to make. As a result, I will not take the easy route and cease my efforts over the next two days despite the fact that most laypeople call it quits when the weekend rolls around. That is the type of dedication I bring to my mission and one that I would enthusiastically bring to your trading team if you are so generous as to give me fifteen (15) minutes of your time to discuss my future.

I couldn’t help but think that, just as the leaders of the EU were able to finally deduce that their financial interests were better served in the spirit of mutual cooperation (see the noteworthy Wall Street Journal article reproduced in part below), that so too you might be able to see how engaging a young and hungry financial markets enthusiast might be beneficial to both of our long-term prospects. As you can no doubt see, I remain keenly aware that events abroad trigger opportunities here at home. I trust that you know an opportunity in the markets when you see one and hope that you might see an opportunity in me as well.

I hope you have a lovely weekend and I look forward to your eventual reply.

Warm regards,

Liam

EU Leaders Forge Fiscal Pact
BY MATTHEW DALTON AND FRANCES ROBINSON

BRUSSELS—European Union leaders Friday agreed to forge ahead with a new deal on economic governance without the support of the U.K., but they again balked at marshalling the large sums experts believe will be necessary to ensure financing for Italy and Spain and prevent a collapse of the euro zone.
The 17 countries of the euro zone formally agreed to run only minimal budget deficits in the future and allowed the European Court of Justice the right to strike down national laws that don’t enforce such discipline properly.

http://online.wsj.com/article/SB10001424052970203413304577087562993283958.html?mod=WSJ_hp_LEFTTopStories

On Cross-Country and the Art of Winning

Tue, 17 Apr 2012 15:35:00 -0400

From: Liam Prescott <liam.j.prescott88@gmail.com>
Date: Thu, Dec 8, 2011 at 11:25 AM
Subject: Introduction: Liam - Day One
To: “xxxxx@gmail.com” <xxxxx@gmail.com>

Mr. Cohen,

As promised, today is day one of my month-long effort to convince you that a meeting between the two of us would be mutually beneficial. I am sure you can appreciate my candor in saying that I am willing to stop at nothing to make my dreams a reality. If you would like I could put you in touch with my high school cross-country coach who said to me one crisp fall morning after a particularly grueling race in which I outpaced our rivals by only a few feet: “Liam, you aren’t the fastest guy on our team, but g-ddamnit if you don’t want to win more than anyone else.” For all the accolades I have won over the years, I perhaps treasure that moment the most.

I think you would agree that a healthy athletic background teaches not only discipline, but teamwork, and how to strive together towards excellence. I have noticed in doing my due diligence on your background that you were a member of an Ivy League lacrosse team. That is quite impressive. I am sure that your athletic prowess combined with your Ivy League intellect has made you a more valuable trader. I firmly believe that I, too, have benefited from my own athletic and academic past. If you allow me to join your team I can assure you that you will find nothing less than a true team player whose unwavering dedication to the bottom line will propel our fortunes into a new realm.

I greatly look forward to your eventual reply.

With kind regards,

Liam