“But five minutes later Danny came running back in my office, literally out of breath. ‘Jesus Christ!’ he snapped. ‘The first guy bought twenty thousand shares from me! Twenty—thousand-fucking—shares! Then he apologized to me for not buying more! He said that he wasn't liquid right now, but as soon as he was, he'd buy more. Can you imagine?’
“And that was it. In that very instant, I knew. I knew that Danny's client hadn't made a distinction between sending a hundred twenty thousand dollars to Stratton Securities and sending a hundred twenty thousand to Merrill Lynch. And it was all because we'd recommended a blue-chip stock first. Meanwhile, Danny was happier than a pig in shit, because he'd just made twenty thousand in commission. But what he didn't know was that I'd just made an additional sixty thousand dollars below the bid. And that was where the realjuice was!”
“Explain that,” said the Bastard.
“Okay, follow me for a second: Ventura was five bid, six offer-meaning that if a client wanted to buy it he had to pay six dollars, but if he wanted to sell it he could only get five dollars. That's why Danny's commission was a buck a share, or twenty thousand dollars. But Harvey was giving Ventura warrants that had an exercise price of two. In other words, Ventura was costing me only two dollars a share. All told, on Danny's twenty-thousand share block, I made sixty thousand below the bid, plus ten thousand above the bid, which was my half of Danny's commission. And all of that was from a single phone call, from a single lead. But that was only the beginning.
“I knew right then and there that if Ventura went up, and there were thousands of clients in the system, they would send in millions more.” I paused for a moment, considering my words. “Of course, it would turn out to be hundreds of millions more, but at the time I wasn't thinking that far ahead. I still had serious obstacles to overcome, not the least of which was that Harvey had only a million warrants to sell, and with my new system, I would eat through those in a matter of weeks. Then I would have to buy stock in the open market.
“But first things first, I thought; I had to shut down the ‘Old Stratton’ and retrain everyone. But I went to Mike first to tell him my plan. It sounded good, he thought, but I could tell that he definitely wasn't bowled over. ‘Give it a shot,’ he said casually. ‘However much business you bring in I can handle with no problem.’ And those were the famous last words of Mike Valenoti.
“A minute later I was standing in front of the boardroom, ready to give the meeting of a lifetime. I still remember this day like it was yesterday. ‘Everyone, hang up your phones!’ I said to the brokers. ‘Hang up your phones right now! I have something to say.’
“Most of them were right in the middle of calls, and they didn't hang up the phones at first. So I winked at Lipsky, and he rose from his chair and began disconnecting their calls in mid-pitch. Then Danny joined in the act, and a few seconds later the room was quiet.
“ ‘Okay,’ I said. ‘Now that I have your attention, I want you to gather up your leads, your pitches, your rebuttals, your client books, and anything else on your desk that relates to being a stockbroker. I want you to gather it all up and throw it right in the fucking garbage can!’
“Of course, no one did anything at first; they were too dumbfounded to move. So Lipsky started snarling at everyone. ‘Let's go! Chop chop! It's time to clean house, like the boss says!’ And next thing I knew, Danny and the Blockhead were walking around holding trash bags, and the last vestiges of the old system were disappearing before my eyes. Within minutes, there were only twelve wooden desks, twelve old telephones, and twelve obscenely young stockbrokers, dressed in varying degrees of cheap, off-the-rack suits. And they were all staring at me wide-eyed, waiting to hear what I'd say next.
“ ‘I want everyone to listen up,’ I said, ‘because what I'm about to say is going to change your lives forever. The simple fact is that all of you are going to be rich beyond your wildest dreams.’ And I went on to explain my new system to them, pointing to Danny as proof that it worked.
“ ‘How much commission did you just gross in one trade?’ I asked him.
“‘Twenty grand!’ he shot back. ‘Twenty—fucking—grand!’
“‘Twenty fucking grand,’ I repeated, and I began pacing back and forth, like a preacher, letting my words hang in the air. Then I stopped. ‘And using my new system, Danny, how much do you think you can gross in a single month? Just a ballpark…’
“He pretended to think for a moment, playing the part perfectly. ‘At least a quarter million,’ he said confidently. ‘Anything less and I'll fall on my sword!’ And with that, the room broke out into complete pandemonium.”
I shrugged. “The rest was easy. I retrained my Strattonites, using the straight-line theory. It was something that I'd come up with at the Investors’ Center but hadn't considered crucial then, because when you're speaking to poor people it's more a question of whether or not they have money to invest; if they do, convincing them is easy. But with rich people, the rules are entirely different: They dohave money to invest; it's just a question of convincing them that you're the one to invest it with. Are you smart enough? Are you sharp enough? Do you know things their local broker doesn't? Are you a Wall Street wizard, worthy of managing a rich man's money?
“That's exactly what the straight line did: It allowed a twenty-year-old kid, with a high school diploma and an IQ just above the level of Forrest Gump, to sound like a Wall Street wizard.” I paused for a moment, thinking of a way to explain the theory. “In essence, it was a system of scripts and rebuttals that allowed even the most dim-witted of stockbrokers to control a sale. It kept things moving forward, from point A to point B—from the open to the close—until a client finally said, All right, for Chrissake! Pick me up ten thousand shares! Just leave me alone!’ I know it sounds simple, but no one else had ever done this before. There were hundreds of scripts floating around Wall Street, but no one had ever organized them into a cohesive system.
“Anyway, for ten solid days I taught it to them—going back and forth, role-playing, like I'd done with Danny that night—until they knew it so well that they could recite the fucking lines in their sleep. Actually, I only spent half of each day teaching them; the other half they spent cold-calling, building a massive war chest of leads to call.
“And finally, on day ten when the leads came due, they started opening accounts on Kodak with such ease that it was literally mind-boggling. It was as if the straight line could turn even the weakest salesman into a total killer. And that emboldened me even further, and I began pounding at them even moremercilessly, promising them riches beyond their wildest dreams.
“ ‘I want you to start spending money now,’ I preached to them. ‘I want you to leverage yourselves! To back yourselves into a corner! To give yourselves no choicebut to succeed! Let the consequences of failure become so dire and so unthinkable that you won't be able to stomach the thought of it.
“‘Understand this,’ I said. ‘When Pizarro came to the New World, the first thing he did was burn his fucking ships, so his crew would have no choice but to hack out an existence in the New World. And that's what I want you to do! I want you to cut off all exit ramps, all escape routes!
“ ‘After all, you owe it to the person sitting next to you to dial the phone. You owe it to every other Strattonite sitting in this room to dial the phone. That's where our power comes from: from one another, from a collective effort, from the combined energy of a room full of the most motivated people to ever hit Wall Street, a room full of winners!’”