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Doping and Finance – Similar?

January 31, 2013

bikemoneyAfter reading the “Post Lance Future of Doping” by my friend Michael Joyner, I took a moment to realize how similar the entire “doping culture” and drive to win by athletes has a very similar parallel in our corporate world and financial markets.  Especially in light of Armstrong’s interview with Oprah; and Michael’s perspective.

In Michael’s post he uses the statement, “Most people, including journalists, fail to understand that a 1% edge in something like a 10,000m running race means the doper wins by 100m, a huge margin.   This also means that there is no need to use industrial strength doping. ”  This is similar to the fact that most people, including journalists, fail to understand a 1% edge to a hedge fund has a similar huge margin, and a 1% edge to a CEO and his corporate team could mean the difference between a huge and marginal bonus. A tempting incentive to cheat, just a little.

Joyner goes on to say,  “Some argue that all the sports federations, leagues, sponsors and TV networks want is the appearance of clean play and that depending on the situation they intentionally or unintentionally turn a blind eye toward doping.”  As the financial industry grew before it imploded (think just recent history: Arthur Anderson, World Com, Tyco, then think the mortgage crisis),   An entire industry was building around those institutions getting the 1% margin, its difficult to fire a really good customer or client that’s growing like wildfire.

Finally, he makes the point: “Everyone was doping therefore it is “dope or be marginalized”, that is more or less one of the arguments Lance made to Oprah.   Just like the average person and journalist do not understand what 1% is worth, most don’t understand what it is to be immersed in a micro-culture where the only things that matter are the last race or workout or the next race or workout.”  Sound similar to quarterly earnings or investment performance?

I think in the end, we are studying human nature and the ebb and flows of ethical behavior in our society.  Perhaps we should think about studying the core of human behavior and ensuring we parents and educators instill ethical decision making early in our next generation.  We can only hope for a better future, but we are, indeed, human.

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