Victor nodded. “Whatever you say, but if you need any access to my overseas accounts just let me know, okay?”
I smiled a dead smile at him, then laid the trap: “All right, I’ll let you know if I do, but I don’t really dabble with that sort of stuff. Anyway, the final thing I want to talk about is how you should manage Duke’s trading account. There are two different ways to do it: You can trade from either the long side or the short side. And both ways have their pluses and minuses. I’m not gonna go into complete detail right now, but I’ll give you the long and short of it.” I paused and smiled at my own pun, which had been entirely unintended. “Anyway, if you trade from the long side, you’ll make a lot more money than if you trade from the short side. When I say trading long, I mean you’ll be holding large blocks of stock in Duke’s trading account; you can then move the price up and make money on what you’re holding. Conversely, if you’re short and the stock goes up, then you’re gonna lose money. And during the first year all your stocks should be going up, so you need to stay heavily long if you want to make a lot of money. I mean, if you really wanna ring the register. Now, I won’t deny that it takes a little bit of balls to do that—I mean, it can be a little nerve-racking sometimes—because your brokers won’t always be able to buy all the stock you’re holding. So your cash has a tendency to get tied up in inventory.
“But as long as you have enough guts and, for that matter, enough confidence to see it through, then when the slow period is over you’ll make a bloody fortune on the way up. You follow what I’m saying, Victor? It’s not a strategy for the weak; it’s a strategy for the strong, and for those with foresight.” With that I raised my eyebrows high on my forehead and threw my palms up in the air, as if to say, “Are we on the same page here?” Then I waited to see if the Blockhead would pick up on the fact that I’d just given Victor the worst trading advice in the history of Wall Street. The truth was that trading long was a recipe for disaster. By holding stock in the firm’s trading account, you were risking everything. Cash was king on Wall Street, and if your trading account was tied up in stock you were vulnerable to attack. In a way, it was no different than any other business. Even a plumber who overstocked his inventory would find himself running low on cash. And when his bills came due—meaning rent, telephone, payroll—he couldn’t offer to pay his creditors with plumbing supplies. No, cash was king in any business, and especially in this business, where your very inventory could become worthless overnight.
The proper way to trade was from the short side, which kept you flush in cash. While it was true that you would lose money as the prices of the stocks went up, it was the equivalent of paying an insurance premium. The way I had managed the Stratton trading account, I allowed the firm to take consistent losses in the day-to-day trading, which ensured that the firm would maintain a cash-rich position and be poised to ring the register on new-issue day. In essence I lost a million dollars a month by trading short but ensured that I could make ten million a month being in the IPO business. To me, it was so obvious that I couldn’t imagine anybody trading any other way.
The question was would the Blockhead and the Chinaman pick up on it—or would Victor’s ego feed right into the very insanity of trading long? Even Danny, who was sharp as a tack, had never fully grasped this concept, or perhaps he had but was such a born risk-taker that he was willing to put the health of the firm on the line to make a few extra million a year. It was impossible to say.
Right on cue, Danny chimed in and said to me, “I’ll tell you the truth: In the beginning I was always nervous when you held major long positions, but over time…I mean…to see all the extra money being made”—he started shaking his head, as if to reinforce his very bullshit—“well…it’s incredible. But it definitely takes balls.”
Kenny, the moron: “Yeah, we’ve made a fortune trading that way. That’s definitely the way to do it, Vic.”
How ironic, I thought. After all these years Kenny still hadn’t the foggiest notion of how I’d managed to keep Stratton at the pinnacle of financial health, in spite of all its problems. I had never traded long—not even once! Except, of course, on new-issue day, when I would let the firm go heavily long for a few carefully chosen minutes, as the price of the units was flying up. But I always knew there was a massive wave of buy tickets coming in at any moment.
Victor said, “I have no problem living with risk in my life. It’s what separates the men from the boys. As long as I know the stock is going up, I’d put my last dime into it. Nothing ventured, nothing gained, right?” With that, the panda smiled, and once more his eyes disappeared.
I nodded at the Chinaman. “That’s about the size of it, Vic. Besides, if you ever find yourself in a bad position, I’ll always be there to support you until you get back on your feet. Just look at me as your insurance policy.”
We raised our glasses for another toast.
An hour later I was walking through the boardroom with mixed emotions. So far everything was going according to plan, but what of my own future? What was to become of the Wolf of Wall Street? In the end, this whole experience—this wild ride of mine—would become a distant memory, something I would tell Chandler about. I would tell her how, once upon a time, her daddy had been a true player on Wall Street, how he’d owned one of the largest brokerage firms in history, and how all these young kids—kids who called themselves Strattonites—ran around Long Island, spending obscene amounts of money on all sorts of meaningless things.
Yes, Channy, the Strattonites looked up to your daddy, and they called him King. And for that brief time, right around when you were born, your daddy was, indeed, like a king, and he and Mommy lived just like a king and queen, treated like royalty wherever they went. And now your daddy is…who the hell is he? Well, perhaps Daddy could show you some of his press clippings, perhaps that would explain things…or…well, perhaps not. Anyway, everything they say about your daddy is lies, Channy. All lies! The press always lies; you know that, Chandler, right? Just go ask your nana, Suzanne; she’ll tell you! Oh, wait, I forgot, you haven’t seen your nana in a while; she’s in jail with Aunt Patricia, for money laundering. Oops!
What a dark premonition that was! Jesus!I took a deep breath and pushed it aside. I was thirty-one years old and already on the road to becoming a has-been. A cautionary tale! Was it even possible to be a has-been at such a young age? Perhaps I was no different than one of those child actors who grows up to be ugly and gawky. What was that redhead’s name from The Partridge Family? Danny Bona-douche-bag or something? But wasn’t it better to be a has-been than a never-was? It was hard to say, because there was another side to that coin, namely, that once you got used to something it was hard to live without it. I had been able to live without the benefit of the mighty roar for the first twenty-six years of my life, hadn’t I? But now…well, how could I possibly live without it after it had become so much a part of me?
I took a deep breath and steeled myself. I needed to focus on the kids—the Strattonites! They were the ticket! I had a plan and I would stick to it: the slow phaseout; keeping myself behind the scenes; keeping the troops calm; keeping peace among the brokerage firms; and keeping the Depraved Chinaman at bay.
As I approached Janet’s desk, I noticed she had the grim expression on her face that spelled trouble. Her eyes were open a bit wider than usual and her lips were slightly parted. She was sitting on the edge of her seat, and the moment we locked eyes she rose from her chair and headed directly for me. I wondered whether she had somehow caught wind of what was going on with the SEC. The only people who knew were Danny, Ike, and myself, but Wall Street was a funny place like that, and news had a way of traveling remarkably fast. In fact, there was an old Wall Street saying that went: “Good news travels fast, but bad news travels instantly.”