One of my favorite sections in the Economist is the Obituary. The publication tends to find interesting individuals to memorialize with evocative accounts of their lives. On March 21, the subject was Falafel, a world backgammon champion, who died at age 51.
I am typing this note on March 31, 2020, during the early part of our third-week of the “be home” world we are coping with. (I don’t know the right term for this: Shelter-in-place? Quarantine? Socially distant? Potato, Po-tah-to…) After a ride on our Peloton, my mind wandered about optimal actions to take with personal investments, and I found myself in our kitchen jotting payoff grids for short-term (~80 day) vs intermediate term (~290 day) portfolio constructions. My amateurish ideas included analysis of out of the money calls and puts, and contemplating what “fair” volatility would be underlying the option pricing. “Is 41% @ 80 days too rich? Is 30% @ 290 days reasonable?”
An aside – One of the things I like about investing and business is the binary nature of certain results: You win a client or you lose a client; Your option moves favorably or it expires OOTM; You successfully recruit a top performer or they choose another firm. As I have spent more time leading teams and managing processes, I have come to live more in the less discrete, gray area of business; Employee engagement is a nebulous metric; Nudging behaviors requires tailoring strategies specific to employees; Changing market conditions require adjustments to certain marketing strategies. The same hot water that softens a carrot will harden an egg.
I stepped away to look at the March 21st issue of The Economist.
I learned that Matvey Natanzon moved to New York City in 1994 after being kicked out of his house in Buffalo, NY, where he lived following his move from Russia, and subsequently Israel. From @TheEconomist:
“He had no contacts in the Big Apple, no friends, nothing. And nowhere to sleep. Since he liked his sleep, being naturally lazy and lumpish, this was a nightmare. He tried park benches, the subway, anywhere he could. One night the best he could find was one of the stone chess tables in Washington Square Park, where he lay on his back snoring loudly with chunks of falafel, his favourite and almost his only food, stuck to his unshaven face. He was shaken awake by the brawny tattooed arms of Russian Paul, whose particular special table this was; in exchange for guarding it for him, Russian Paul agreed to give him $2 a day to buy more falafel, at least. So Falafel he became. Since no one, not even his mother, called him Matvey, this was fine. And so began a sequence of twists and turns, losses and wins, that culminated in 2007 with his crowning by his peers, the Giants of Backgammon, as a genius, and the best backgammon player in the world.”
The Economist, March 21st, 2020
His story is remarkable. Falafel started hustling in NYC, tirelessly honed his craft, and developed habits for gambling. He became recognized as a global celebrity, with profiles written in Esquire and The New Yorker. He returned to his home in Israel, shared ownership in a poker-club, and passed away on February 14th at age 51.
Friederich Nietzsche wrote that, “Without music, life would be a mistake.” I believe the gifts of the arts, as well as colorful personalities in our lives, are the reminders that life does not have to be black and white or gray.
I imagine I would have enjoyed a friendship with Hr. Falafel. Amongst other things, I would have been interested in his takes on option volatility and choosing marks in Washington Square.
I am going to conclude this evening without reengaging the thoughts on volatility and portfolio construction. Rather, I am going to spend a little time listing to 3 Cohens and look forward to time with my own colorful friends.