Lippard.Multics 1986-10-16 23:46:49 mst Thu
Subject:  Bear market means bargain for diners
Date: 16 Oct 86 20:26 PDT
From: Pavel.pa@Xerox.COM
Subject: [MikeDixon.pa: Bear market means bargain for diners]
To: info-cobol@MC.LCS.MIT.EDU
Message-ID: <861016-202642-5399@Xerox>

(from RISKS digest)

                BEAR MARKET MEANS BARGAIN FOR DINERS
                          By Paul Lewis

    (reprinted without permission from the New York Times News Service)

PARIS - The two hungry diners sat down, turned expectantly to a flickering
computer screen on a nearby stand and began studying the latest quotations.
The news seemed ominous.  Making money would not be easy in today's luncheon
market.

The scene was La Connivence, a small new bistro-style restaurant at 6 Rue
Feydeau, a stone's throw from the Paris Bourse, or stock exchange.  As with
stocks on the exchange, the laws of supply and demand determine the price
diners at La Connivence pay for a meal.  (The name, La Connivence, means
complicity, with the slightly shady overtones appropriate for a gambling den
of sorts.)

As patrons place their orders in the austere ground-floor dining room, one
of the owners, Jean-Claude Trastour, enters them into a computer which
promptly adjusts the menu prices to reflect demand.  Popular dishes, like
popular stocks, go up in price while less popular ones decline.

Timorous diners may choose to pay the quoted price for a dish at the
moment they order it.  That is called eating on the march comptant, or
cash market.  If the price rises while these diners are tucking in, they
have done very well for themselves.  If the price falls, they get
indigestion.  It is the safe way to eat - safe and dull.

More adventurous folks play the futures market, the march a terme,
agreeing to pay the price quoted when they call for the check at the end
of their meal.  Naturally, they hope the price will have fallen by that
fateful moment.  But hopes may be dashed by a flurry of buying, and the
price may easily shoot up.  Worse indigestion.

The newly seated diners began preparing their gambling strategy by reading
the trends.  They saw that the prices of several dishes had already fallen
by close to 6 francs--the limit for price changes up or down in any one
eating-trading session.  (A dollar is worth about 7 francs.)  That left
little room for further decline.  There would be no point in ordering any of
those dishes, no matter how delectable--unless, of course, the diner was
more interested in eating than in successful speculation.

The computer screen flashed chute du filet mignon, indicating that the price
of that choice steak had already fallen 5 francs, to 50 francs a serving.  A
veal casserole with herbs had slipped 4 francs, to 48 francs.
 A rack of lamb chops for two, down 10 francs, was priced to sell for
110 francs a serving.  As for the haddock, the computer reported a
"sharp fall" of 5 francs a portion, to 57 francs.

Other dishes were doing better.  The screen showed that a "stampede" of
orders for lotte had pushed the price of that pleasant Mediterranean
fish up 4 francs to 62 francs a portion, making it an interesting
speculation.  If diners played the forward market, the price might be
substantially lower when the time came to pay; of course, it could still
rise another 2 francs before reaching the 6 francs ceiling.

Occasionally, a diner's greed is outweighed by the thought of what he would
have to eat to turn a profit.  An example: "Victorious advance of the
stuffed pigs' trotter," the computer flashed, marking it up 5 francs, to 43
francs.  Surely it could only fall.  But a lunch of pigs' feet?

In the end, the diners chose a conservative strategy, ordering the special
of the day, saddle of lamb, on the marche a terme.  The lamb was trading at
39 francs a portion; up a modest 2 francs for the day thus far.

The check arrived for the conservative diners: 228 francs for two, which is
pretty good by Paris standards since it included a bottle of Beaujolais, a
cheese-filled ravioli from the French Alps for a starter, homemade apple
tart, and coffee.  But the roast saddle of lamb stood at 38 francs, only a
meager 1 franc cheaper than when it was ordered.  Down the street, the
Bourse was having one of its best days ever.

      [Inside tip: Sell-SHORT-Ribs, Buy-LONGustine.  Bon appetit!  Pierre]