“Mind The Gap!” – The life and times of a man on the move Episode 76

We should have our own version of the Egon Ronay guide and Michelin Star rankings for the electronic trading industry….

In this weekly series, I look back on what stood out, what was bemusing, amusing and interesting during my weekly travels, interesting findings within the FX industry and interaction with an ever-shrinking big wide world. This is purely observational and for your enjoyment.

What’s cooking for 2020?

We have arrived at the final Sunday of 2019, and once again, an entire year has almost flown past.

Eventful as ever, 2019 is about to depart, yet it does not seem very long ago at all since it began.

During the last week of the year, many FX industry executives take well deserved and much needed time off, and in some cases, offices are closed for a few days. This is the time of year to reflect on the past events, and look forward to new ones.

For me, it’s a normal week, apart from this year’s coinciding daily candle lighting for eight days, so with the day in the calendar during which a vast proportion of the world is consuming a fine array of turkey and assorted accoutrements, my day consisted of a slightly reduced amount of work, and a motorcycle ride to the Kent countryside to make use of the quieter roads and December sunshine.

That on its own would not be enough, however, and those who know me well will be aware of a huge interest and hobby of mine, that being cooking. Hence, some of this week has been spent in the kitchen, working on perfecting the presentation of some interesting dishes, and that led me to a holiday period ‘watchathon’ of some of outstanding British chef Gordon Ramsay’s televised efforts to revitalize flagging restaurants, filmed between 2004 and 2012 across Britain and America.

The show, ‘Kitchen Nightmares’, features Chef Ramsay touring the two countries offering some quick and effective help, dispensed with his trademark accuracy and harshness, to failing restaurant businesses, usually with remarkable results.

It got me thinking. After re-watching a few of these episodes, it was clear that a pattern could be deciphered between restaurants that were relatively easy to reinvent and turn back to a good profitable business, and those which were not only beyond help, but with whose owners Chef Ramsay clashed severely.

The pattern that I could see consists of two issues, the first being restaurant owners who had been churning out the same pre-packaged, poor quality fodder that nobody wants to eat, from kitchens that had become increasingly filthy and unsanitary, resulting in the owners and staff becoming dejected and almost robotically going through the same motions every day and losing the spark and interest that got them into the culinary world in the first place.

The second constant was that many of the struggling restaurant owners had a ‘prima donna’ approach, and despite their 80 seat restaurant having only one or two tables reserved each evening and food that brought out every four-letter expletive known to man from Chef Ramsay’s utterances, they believed that this is how they have always done things, and they are right and that the rest of the world is wrong.

Forcing the owners – some of whom were exposed to eye-watering amounts of debt which was spiralling out of control – in some cases, there were small restaurants losing over $8000 a week, yet the owners and staff still believed in their method and initially rejected Chef Ramsay’s very astute recommendations, often resulting in shouting matches in order to get them to understand that changes need to be made.

This is what happens when the owner of a small to medium sized business get stuck in a rut.

It’s what happens when everything is pre-packaged and the kitchen staff do not know how to actually cook from good quality separate ingredients, having spent many years simply heating chemical-infused junk food up by what is amusingly referred to as “Chef Mike” , meaning the microwave oven.

Trying to get this unsanitary production-line mentality into the proper culinary business that would attract today’s discerning clientele often strikes fear into the heart of the restauranteurs and their staff, even to the point of staff quitting when Chef Ramsay shows them how to cook a new, fresh menu, and owners going for his throat.

Can anyone see a pattern here?

Today’s retail FX traders are as astute and knowledgeable about how an electronic trading system works, what analytical tools and asset classes are required and how execution should take place as well as how customers should be treated, assisted and provided with good information by their broker as weeknight diners from San Francisco to London.

During the course of 2019, the subject of potential consolidation of retail FX brokers was often mentioned, largely due to the apathy toward the cost of developing new infrastructure that keeps pace with technological change in terms of regulatory reporting requirements, and diversifying a product range from over 1231 other MetaTrader 4 product offerings around the world.

You could liken a white label MetaTrader brokerage – that being a small company that does not have anything at all to do with its trading topography, instead putting its brand on someone elses’ b-book MetaTrader platform that is itself leased from MetaQuotes as being the McDonald’s of the trading world.

McDonald’s is not in the restaurant business, it is in the franchise business. McDonald’s, ever since the days of Ray Kroc, will not let you fail if you open a franchise. Instead, they will not allow any flexibility, but they will provide every franchisee with identical premises, identical machinery and a handbook for staff that must not be deviated from.

The head office will make you work very hard and then expect you to reinvest any profits into opening more franchises, so that it is likely that you will never become wealthy, or enjoy cooking – cooking is nothing to do with McDonald’s enterprise – but your children will benefit as your three or four franchises self-operate later on in life.

This is not cuisine, and it’s not entertainment. It does not make its mark on anything at all, and is forgettable, but here’s the rub: Eating a pile of processed, pre-determined garbage from any McDonald’s franchise anywhere in the world will leave the same identical, unpleasant and unfulfilling aftertaste, and will relieve you of around $8.00 for a large meal of any kind.

For $8.00, I can cook a portion for one, of pan-fried venison cooked in garlic and fresh olive oil, with a red wine jus and some fresh seasonal vegetables, caramelized in honey and mustard, and it will look, taste and feel like a genuinely high quality restaurant experience.

What’s the difference? I learned how to cook aged 16, and have made it a way of life. It took lots of trial and error over the years, and has occasionally resulted in starting over, wasting some ingredients – and I HATE waste!

Eating from McDonald’s is unfulfilling and in my opinion downright disgusting, but it means you do not need to learn to cook, and you do not need to even think about anything.

See the point? Those who learn their skill and then build a brokerage around what experienced traders really want will not find themselves either fighting against the regulators or their clients, being the victim of consolidation – and I say victim because there are dedicated companies around nowadays whose sole remit is to buy up MetaTrader brands en masse and just run them as one entity, something that can be done without any tweaking apart from just making one giant bank account, and will not find themselves ranting at each other as a result of dis-empowerment due to being unable to diversify, and self-anger at being unable to modernize due to having outsourced the whole lot and being tied in.

So, those who learned trading, founded their businesses by understanding client needs and building a structure from the ground up around it – and yes, that does mean using MetaTrader as a front end, but having alternative asset classes and systems, and connecting the MetaTrader front end to proper market integration systems and matching engines, along with Tier 1 liquidity for multi-product on and off exchange products.

Add this to a classy and educated customer-facing team, and you’re ahead already. It’s like having a head waiter who engages with clients and knows where the pinot noir grapes were grown, how the sustainable sea bass has been handled from sea to table, and can hold an eloquent conversation about fresh seasonal market produce, along with taking some interest in the lifestyles of the clientele.

The other end of the scale is punching “go large” into a faceless screen, or worse still, stinking out the interior of your early-1990s minicab out by driving through the Drive-Thru (sic!) and shouting a standardized order at the talking litter bin. It’s like being b-booked by a here-today-gone-tomorrow unregulated offshore white label, churning its leads and not viewing them as actual human customers, like the unmotivated staff in a flagging low-end diner churns pre-cooked chemical-based masses to unsuspecting customers with no palate.

If you are master of your own destiny, and you know your trading topography and have very good supplier/vendor relationships along with an ethos of investing in your staff, 2020 will be your ‘Michelin Star’ year.

For those who make no effort and hide offshore, offering processed beige mush, you may not even get an angry visit from our equivalent of Gordon Ramsay.

Let’s make 2020 a revolutionary year. At FinanceFeeds we are here to help you in your endeavors. I wish you all a great start, and a Happy New Year!

 

 

 

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