The MacroTourist is still getting caught up from his summer vacation, so instead of writing about the markets today, I am going to take a moment to tell a story. Actually, it is two stories, but they blend into one lesson. Most of my older readers will already know this truth to be self evident, but for my younger followers, I hope this post offers a little bit of enlightenment.
For the first story we need to go back to the summer of 1999. At the time I was working at my big bad Canadian bank as the equity index derivative trader. Every May our firm’s trading desks would get a batch of university students for our summer student program. Most of them were chosen from the hundreds of interviews conducted in the previous months. Inevitably human resources would send us these kids with perfect 4.0 grade point averages that were not prepared for life on a trading desk. But every now and then there would be one that would sneak in for some other reason. Sometimes it was an important client’s son or daughter, or sometimes a managing director took a liking to a particular applicant’s hutzpah. And sometimes, it was an important trader’s relative…
And this is the situation our group found ourselves that summer. The main equity desk’s head trader’s cousin was foisted on us. He couldn’t work with his uncle, so they tucked him into our little group. Now I don’t remember a lot about the kid. He was pleasant enough, and he definitely enjoyed going out with the boys after work. But he did not understand the enormous luck he just stumbled into. He came in late, he did his job half-assed, and he was not particularly quick at figuring anything out. Even though all the other summer students were top of their class, willing to cut off a limb to get a job on the trading desk, this guy did not clue into the unbelievable opportunity he had parachuted into.
During this particular moment in time, our group was uniquely positioned. Our bank was the top Canadian securities dealer. Markets were just starting to become computerized and our group was at the forefront of brining this technology to the Canadian marketplace. Not only that, but we had one of the few direct drive deals left amongst the Canadian bank owned dealers (direct drive is when you are paid a percentage of your trading profits). With the tech bubble just entering the parabolic stage, that summer things were hopping on our desk. You couldn’t have asked for a better environment.
Even though he wasn’t particularly excellent at his job, our nepotistic summer student was assigned duties we were neglecting due to being too busy. When late August came around my boss asked me what I thought about our summer student.
“Hey Kev, what do you think about keeping the kid on?”
“What do you mean?” I responded.
“I was thinking about asking him to not go back to school,” my boss explained.
“That kid was born with horseshoes up his ass,” was all I could choke out. “Guys would give their left nut for that opportunity.”
“Well, I know he isn’t exactly the hardest working kid, but we are so busy I can’t be bothered to spend the time training another one.”
And so later that night when everyone had left, my boss took the kid aside and offered him a job.
The next day I came to work ready to welcome our group’s new permanent member. But much to my surprise, the kid turned my boss down.
“What the hell happened?” I asked my boss at the first free moment we had.
“He just said no. Said he wanted to go back to school and would love to work in our group next year when he graduates.”
“Did you explain to him that you go to school to get the job? For traders, the actual schooling is completely irrelevant?” I asked.
“Yup… He said his mother would be disappointed if he didn’t finish,” my boss explained.
“Well, if he is that stupid, he doesn’t deserve the job,” was all I could respond.
Of course by the time the next summer rolled around, the dot com bubble had burst and the whole street was laying people off, not taking on new kids fresh out of school. Needless to say, when the kid came knocking with his degree in hand, there was no more spot for him…
The second story is actually my old man’s tale, and I hope I don’t mangle it too much. For many years, my father was the research director for a medium sized independent Canadian brokerage firm. One year he had to hire two new research assistants. Instead of doing the easy thing and hiring two kids out of one of the Canadian University’s business schools, he decided to try something different. He would fill one of the spots with a Western Univeristy HBA student (for my foreign readers think about Western as the Canadian Harvard). But for the second spot he would “take a flier.”
So he sifted through the mountain of letters on his desk from different applicants. He found an eager young guy from the East coast that looked intriguing. He phoned the number listed on the resume. His Mom answered and told my father her son was out working on the fishing boat but would be in later that afternoon. My father left his name and number and asked for her son to return his call at his convenience.
Later that afternoon my dad’s phone rang. Sure enough, it was the eager young prospective employee. My father did a preliminary interview by phone, and upon concluding that the kid had potential, asked the next time he was in Toronto to come in for a proper interview.
“Ok, I’ll be there tomorrow,” he said much to my father’s surprise.
“You’re coming to Toronto tomorrow?” he asked.
“I am now,” he responded.
My father quickly realized this kid who had literally just stepped off a fishing boat, was dropping everything, and with considerable expense to himself, flying halfway across the country for a simple interview.
“Oh no, don’t do that,” my father explained, “the next time you are in Toronto is fine. This is just a preliminary interview and I can’t promise that at this point, it is anything more than the start of the process.”
“I understand. I appreciate the opportunity, and I will see you tomorrow,” was all that came out from the other side of the phone.
Holy shit. This kid who probably doesn’t have two nickels to his name, is blowing all his money for a shot at this job, was all that my father could think.
“I really don’t want you to spend all that money coming out for me,” my father insisted, “please just drop by my office the next time you are in town.”
“Thank you again for this opportunity, I will see you tomorrow,” was all that came back.
You can probably guess what happened. The kid from the East coast showed up the next day and got the job.
Now here is the part of the story that most people don’t know. That kid did not last long in my father’s research department. He was never really suited towards being a research analyst, and my father encouraged him to get a job on a trading desk. Within a year or two, he was working at another shop as an equity salesman. Then a couple of years later he left to join a hedge fund. A few years later, he started his own fund. Over the years he has had some ups and downs. At one point he was probably the hottest Canadian hedge fund manager out there. Then he had a tough 2008 (his choice of prime brokers was not the best…) But he bounced hard from the lows, and made enough to simply retire and basically trade his own money. He now lives full time on a 100 acre warm island estate that would make a Bond villain jealous.
So there you have it. Two stories about kids given chances. In one it was virtually handed to him on a silver platter, and he still found a way to blow it. In the second, the kid took the smallest, tiniest opening, and ran with it to success beyond his wildest dreams. It is hard to get your shot. When you get it, make sure you make the most of it.
Thanks for reading – have a great week-end,