On Eating What We Kill

The video embedded below is making the rounds these days, to nearly universal reactions of vicarious embarrassment among people with souls. This is one of those cultural signifiers that splits its audience neatly in two: if you don’t find anything objectionable or cringe-inducing about this, chances are an explanation why everyone else does may not be of any help. Still, I tried to address exactly this subject last year in an editorial for Expiring Monthly. The column in question is available as part of our free issue, so I have reproduced it below.

On Eating What We Kill
March 2010

The slogan, popular among many traders, that “we eat what we kill” isn’t just absurd, it’s dangerous. The cliché is absurd because every tick in profit and loss that accrues to a trader’s account is the result of a series of institutions, laws, practices, labor hours, and countless other concrete relations of production without which trading would be inconceivable.The chain of dependence that leads to a successful “predatory” financial transaction is, in fact, so much more protracted than the series typical of ordinary “agrarian” cubicle work that we might instead regard trading as among the most tenuous, gossamer pursuits anywhere in Western culture. Recent hysterical outbursts among banks, hedge funds, and high-frequency shops over the mere mention of the possibility of a Tobin tax on financial transactions illustrate the extreme fragility of the business of trading. But an environment of perpetual regulatory capture is just the most obvious in the long chain of conditions necessary for presumably independent, carnivorous traders to exercise their purported skills.

Every financial instrument is a derivative, after all, of the work that goes on elsewhere in the material economy. When that material world occasionally impinges on the austere realm of finance – in interruptions natural, political, workerist, and so on – it becomes clear just how entirely reliant the financial sector is on the people and relationships that it exploits for profit.The impetus for the slogan, I take it, is that whereas ordinary workers depend on bosses or consumers or other businesses for their livelihoods, traders have severed such ties and are free to take profits wherever they find them. But this is just irredeemable mythology, and it gets the relationship precisely backwards. Medicine will never be a useless profession as long as people get sick; farmers, chefs, and vintners will be needed to keep us fed and happy; and we can think of similar explanations of the importance of teachers, barbers, police officers, and so many others. My claim is not that traders are useless to society; that’s a question for another time. But whereas the allocation and reallocation of capital to different assets is an activity so utterly reliant on the strength of the material economy, boasts of carnivorous independence on the part of traders seem immediately not just false, but also in poor taste. Traders proud of their supposed predation are the anemic leonine aristocracy of a protected nature preserve, oblivious to the guards, gates, and smaller animals without whom they would quickly die.

Beyond the absurdity of bluster about “eating what we kill,” I’ve claimed that the slogan also represents a dangerous attitude. If, instead of an attitude of humility and circumspection, I approach markets with all the maturity of a frat boy, I dramatically increase my chances of making serious errors.The conceptual mistake here, for one, is in attributing any success I have to my own efforts, rather than to luck; in the absence of statistically robust performance data, any claim about my own trading prowess is just a swaggering invitation of future losses. And even if we exclude discretionary traders, a healthy dose of overconfidence is a great way for a mechanical or systems trader to fail to notice important changes in the market. In addition to being an obviously false description of reality, the mythology of self-reliance is a distraction and a cognitive bias that we can all do without.

A more accurate summary might be something like,“we eat whatever we’re lucky enough to find.” I don’t expect that inelegant phrasing will ever catch on, but the best traders don’t tend to think in slogans, anyway.


5 Comments For This Post

  1. Eradke Says:

    I guess I am in the minority when it comes to this video. I liked it, I am biased because I am an independent trader.

    Whatever you need to put yourself in the correct mindset to execute a successful trade is up to the individual. But to continue to grow as a trader and react to changes, not rely on “regulatory capture” or “gimmicks”, you need to be able to immediately switch your focus to what is important, putting yourself in the best position to profit. whatever you want to use to frame that mindset is a personal choice

    The phrase to me means that you get what you produce. I have never met a successful trader who was not aggressive at some point during a trade. That does not mean that they are aggressive people. The phrase also means you understand risk.

    Maybe I missed the point of your article but more than likely we have two different definitions of trader.

  2. Dave Says:

    “Eat what you kill” is a phrase more often associated with sales than trading. For anyone with a sales job getting paid on a commission-only basis, you literally ‘eat what you kill’ based on your sales production.

    The writer of this production was trying to make a bold statement. He just chose the wrong phrase.

  3. scrilla_gorilla Says:

    I see how you find the video kinda ridiculous.

    In general, though, I think the phrase “eat what you kill” speaks less to a “predatory” aspect of trading and more to the aspect of independence and self-reliance.

    For most people, their income is not tied to their performance (except perhaps loosely and over the long-term). For independent participants in markets, however, their performance and their income are essentially the same. Thus, if you don’t “kill” (perform well in the market) then you don’t “eat” (take home income).

  4. TradeLoose Says:

    I too took issue with the apparent big egos in the video. Humility is indeed necessary for long-term success in the markets.

    However I think that a strong survival instinct (which I think is what is meant) is correct. Even hunters who indeed eat what they kill would have a nearly impossible time without ‘a long chain of conditions’: vehicle designers and builders to get them to the hunting grounds; gun designers and builders, warm clothes manufacturers etc.

  5. sentimentArb Says:

    I think your criticisms are wide of the mark.

    First, you overlook the fact that the slogan “eat what you kill” refers to an animal kingdom with a complex dependence structure, not unlike that of the material world you so fervently extol. To my mind, the slogan is an endorsement of that structure as meritocratic; it is not an endorsement of unfettered predatory behaviour – after all, that would be inconsistent with a properly functioning animal ecosystem.

    Second, your arguments sometimes consist of tendentious rhetoric unsupported by fact or theory. For example, is it “obvious” that regulatory capture is required for traders to earn a profit? Evidently you are unfamiliar with the work of Grossman and Stiglitz, taught in most MBA programs, which shows that traders who expend resources on research can earn profits because perfectly efficient markets are impossible.

    Third, you excoriate traders for overlooking their sector’s dependence on the material world. But surely the relationship also runs the other way: the financial sector lubricates the wheels of material activity. You also claim that the financial sector “exploits” people for profit, which raises a contradiction: how can finance be at the mercy of the material world while simultaneously wielding sufficient power to exploit it?

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Jared Woodard specializes in trading volatility as an asset class. With over a decade of experience trading options and other volatility products ... Read More


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