With stock and commodity prices all over the place and everyone trying to figure out “real value” is, it is time to share a favorite story.
This is a wonderful tale about “price discovery” involving two of our nation’s most famous business titans: J.P. Morgan and Charles Tiffany.
As many in the trading world like to say, our universities are filled with books and professors who are trying to eloquently and elaborately explain business and price discovery when perhaps we can learn the most from our ancestors and the stories associated with their great success.
So, the story goes…
Being the astute jeweler that he was, Mr. Tiffany knew that Mr. Morgan had an acute affinity for diamond stickpins. One day, Tiffany came across a particularly unusual and extraordinarily beautiful pin. As was the custom of the day, he sent a man around to Morgan’s office with the stickpin elegantly wrapped in a robin’s egg blue gift box with the following note:
“My dear Mr. Morgan. Knowing your exceptional taste in stickpins, I have sent this rare and exquisite piece for your consideration. Due to its rarity, it is priced at $5,000. If you choose to accept it, please send a man to my offices tomorrow with your check for $5,000. If you choose not to accept, you may send your man back with the pin.”
The next day, the Morgan man arrived at Tiffany’s with the same box in new wrapping and a different envelope. In that envelope was a note which read:
“Dear Mr. Tiffany. The pin is truly magnificent. The price of $5,000 may be a bit rich. I have enclosed a check for $4,000. If you choose to accept, send my man back with the box. If not, send back the check and he will leave the box with you.”
Tiffany stared at the check for several minutes. It was indeed a great deal of money. Yet he was sure the pin was worth $5,000. Finally, he said to the man: “You may return the check to Mr. Morgan. My price was firm.” And so, the man took the check and placed the gift-wrapped box on Tiffany’s desk. Tiffany sat for a minute thinking of the check he had returned. Then he unwrapped the box to remove the stickpin.
When he opened the box he found – not the stickpin – but rather a check from Morgan for $5,000 and a note with a single sentence – “JUST CHECKING THE PRICE.
“So much in life is a negotiation – so even if you’re not in business you have opportunities to practice it all around you.”
-Kevin O’Leary
“You do not get what you want. You get what you negotiate.”
-Harvey Mackay
“Everything is negotiable. Whether or not the negotiation is easy is another thing.”
-Carrier Fisher
“The first rule of negotiation is to always be willing to walk away from the deal. The first rule of happiness is to not be attached to pleasing moments.”
-Tara Stiles
