All or nothing
A nation of risk takers
November 27, 2001
What is it in our culture that makes us such risk takers? In March 2000,
the Nasdaq market reached its peak above the 5000 mark and every Iranian
friend of mine was giving stock advice. I have a friend who lives in California
now. He used to call me and say: "Agha, seesko! Faghat seesko bekhar.
Morgejeh khoonat ro bezar roosh!" (Cisco! Only buy Cisco. Bet your
mortgage on it).
I would say okay, but what does Cisco do? His answer was, "Agha,
cheekar dari faghat bekhar!" (Why do you care, just buy!). When I would
press a little bit more he would say, "Nemeedoonam agha, vali alan
panjata balam!" (I don't now what they do, but I am up fifty thousand
Whenever we would travel to southern California to give a concert, we
would see all the new million-plus homes being built with Iranians on the
waiting list. Nevermind the pricey cars and Rolex watches they were able
to acquire through sudden wealth generated by stock options or just simply
betting on the market.
No doubt, a lot of these people worked hard to get a college education
in some engineering field that is the pre-requisite for dot.com type jobs,
and had gotten positions with companies in networking, telecommunications,
and web-related fields. They were swimming in a well-deserved sea of cash
and stock options (many to be drowning in a sea of debt and margin calls
a year or two later). Everyone was preparing to retire in a year or two
at the ripe old age of 30. As they say in Farsi, "heechkee khoda ra
bandeh nabood" (They thought they could do no wrong).
Some friends would call and offer stock tips. When I would ask why should
I buy, what is the P/E (Price/Earnings Ratio), or similar fundamental questions,
they would say, a friend of a friend of a relative is the CEO or something,
and he says buy before a certain date. Then I would go to a football party
(more betting of course) and others at the party had bought "thousands
of shares" based on the same tip. However, they had heard it from a
friend of THEIR friend.
I must admit, since CD sales were good (music CDs, not the certificate
of deposit), I was also tempted and bought a few shares that actually made
some money on one of these "tips". However, like everything in
life, all things must pass, and so did the good times with the Nasdaq.
After the September 11 disaster, the Nasdaq was sitting at about 1350,
a devastating loss of about 75% from its high in only 19 months. Individual
stocks have even fared worse; some companies stocks have gone down from
$100 to about $1, or even less. I had from a childhood friend . He couldn't
speak. he was holding back tears.
"Agha tamoom shod," (It's finished) he said. I thought he meant,
that like me, he was licking his wounds and getting out of the Nasdaq mania
crap shoot. What he really meant was that he lost everything. He cursed
his broker who had bought thousands of shares of Broadvision at more than
$100 a share for him while he was away in Iran on a short trip. He said
he lost $750,000 when each share collapsed to about 80 cents.
Another friend of mine who is a mortgage broker said an Iranian client
had bought a house during the height of the dot.com era in Silicon Valley
for an appraised value of $800,000. He had bought it for $500,000 and taken
out a home equity loan for $600,000 and now wanted to max out the remaining
cash to pay off his credit card and stock margin debts.
The only problem is that now, due to the downturn in the economy, his
house is not worth $800,000 anymore, and the bank won't lend him the extra
amount he was counting on. So the poor guy is now house rich and cash poor.
All of this made me think. What is it with our culture that makes us
such risk takers? It's all or nothing. Back in Iran, we had a nanny who
loved to play the lottery (bileet bakht azmayi), even though gambling is
against the tenets of Islam. She loved to sit in front of the TV and watch
the weekly drawing to see if she had won. She would buy lots of tickets,
even though she did not earn much. Naneh had no college degree, but she
still had the urge to take big risks.
When one visits Lake Tahoe or Las Vegas casinos, there is an Iranian
at almost every table. It doesn't matter whether it's black jack or craps,
they are there. I'm willing to bet that 95 percent of Iranian households
have at least one deck of cards. Poker, Rummy, Bridge, Belote, Pasoor,
you name it, we play it. Not to mention, takhteh nard (backgammon).A lot
of these games are played for money.
I think there is enough evidence to show that as a nation, Iranians are
risk takers. I'm just curious why. Is it because Iranians had to develop
a Darwinian "survival of the fittest" defense mechanism due to
the many external threats we have faced (Alexander, Arabs, Genghis Khan,
Ottomans, and even Afghans!). Therefore we have taken risks to survive as
a nation. Perhaps in times of peace, the same drive has acted as a subconscious
urge. I would love to hear from any social scientists on this subject.
It reminds me of a joke a friend of mine told me. One day an Iranian
comes back from a casino and his friends asks him, "How did it go?"
He says with a mild speech impediment, "Ith wath greath."
-- "What did you play?"
-- "Black jack."
-- "How much did you bet?"
-- "A thouthant."
-- "Wow, did you win?"
"Yeth," the gambler said, "buth I told the dealer 'Leth
it rite' (let it ride)," meaning he left all the winnings on the next
bet. This happens a few times and the gambler keeps winning, until he had
twenty-thousand on one bet. The dealer asks him what he wants to do, and
the guy again says "Leth it rite", with the same speech impediment.
The friend asks, "So what happened?"
-- "I goth a twenthy buth the dealer goth a black jack, and so I
-- "You are really brave, if it were me, I would have had a stroke
losing that much money on ONE bet!"
The gambler points to his tongue and says, "Pass fekr meekoni een
cheeyeh? Hasteh hooloo?" (Why do you think I'm talking this way? Does
it look like I have a peach pit in my mouth?)