Posted by: guinness222 | December 17, 2008

“God I still love the smell of the markets,….God help me!”

 One of my “fatal flaws” is that I never really got into “the market”, stocks, bonds, etc. ,despite being the head of the “Control Department” for six or eight mutual funds for three years, (early 1970’s, in my younger days). I guess I was struck by the “volatility” of the entire thing. I used to go to lunch every day with the “Fund Managers” , talk was always about the market, the stocks, etc., and basically what I learned WAAAAAY back then is that it’s as close to all “rigged” as you can get. The best adage for the American Stock Market is that, “a fool and his money are soon parted”. Pretty heavy indictment, huh? Let me explain a bit deeper.

         Mutual funds were a relatively “new thing” in the late 60’s early 70’s, and the Dow-Jones Industrial Average was hanging out then at about 700-800 points. The greatest fear on ‘the street” was that if it EVER broke 1000 points, well,..bend over and kiss your butt goodbye! Daily “volume” ,or number of shares traded, was usually 500,000 – 750,000.  Aaaah! The good old days. I was there when the daily volume broke 1,000,000 shares, and for sure heaven was just around the corner.

        Most Fund Managers, and the “Traders” who worked the floor at the Boston Stock Exchange,(right across the street from my office and an , albeit a smaller version, the New York Exchange. There were several “markets” in those days The New York Exchange NYSE (interestingly enough three or less letters in the stock symbol, NEVER four) , The American Stock Exchange AMEX, for worthy, but “lesser” stocks than those of the “New York Exchange”, and this new upstart “mostly electronic thingy” called the NASDAQ, which was sort of the REALLLLY risky new stuff that no one knew much about. Obviously in the late 60’s and early 70’s there were computers, but they were huge, and “clunky” , and not much able to handle the then “frenzy” of the buying and selling of 100,000 shares in an hour. It was all done by hand, and the screaming, the yelling, yep, it was just like the movies, but things got done.

          The markets all closed at 3pm Monday through Friday, not 4. There was no such thing as “after hours trading”, etc, or worse yet following the Sun around the world and trading in Hong Kong, London, Paris, Germany, Russia, etc. The madness took a break at the end of the day,…until tomorrow. I took investment courses from the NASD, The  National Association of Stock Dealers, sort  of the self governing group, and was actually beginning to study for my “brokers licence”, a pre-requisite to be a trader/broker. It was a real Rock n’ Roll environment to be sure, and I loved the pace and the chaos. The markets all opened at the same time 10:00 a.m. Everyone sort of hung around until the opening “bell”. (Which literally was a bell they rang), then the feeding frenzy began, and from 10 to 3 it never let up. The old paper “tickers” relayed information and punched it down on paper tapes, telephones were  all hard wired, so there were no “cell phones”, there were elaborate hand signals, secret brokerage codes, and it was every bit as enjoyable as listening to Vivaldi’s Four Seasons (which happens to be on my tunes right now), simply becasue it was perfectly orchestrated chaos and excitement. That frenzy, the crescendos, the lulls, the constant integrating of everything,….it was a special time, and place in my memory, how American business worked, right in front of my very wide eyes, the entire ,well, ….like the beginning of the Wide World of Sports,…”the thrill of victory, and the agony of defeat”,….all played out before my very eyes thousands of times a day!

        I began to get to know and  talk to a lot of  the traders, the brokers, the Fund Managers,it was an entire education you could get no where else on earth, not even Harvard University across the Charles River. Then  there was the two hour “decompression” window , between 4pm and 6 pm. From three to four pm they were all working on cleared trades, balancing their books, doing all the paperwork, …but only until 4pm. At 4pm you would swear the entire City of Boston was just bombed and was roaring out of control with carnage, fires and pestilence. But it was just “the Brokerage guys” going to the pubs. It was then a combination of the three Martini Lunch (minus the food, as they never got to lunch anyway), the two martini afternoon break, (which they also missed) and a couple of drinks to “take the edge off” before they went home and read and researched until 10pm or later for tomorrow’s  “day at the market”. Totally empty bars and Pubs, staffed with four bartenders, a dozen cocktail waitresses, and virtually no chairs or stools (these guys were all used to being on  feet all day , and moving around, after the close was no different, trying to get info on something they thought they may have missed, why the big move in utilities, how about the Insurance Sector earnings,….anybody got an idea, any inside “dope”?) , and then,within 30 seconds of four pm, the place was wall to wall standing room only, a pub awash in martini’s, Traders, Brokers, Fund Managers, and young women. Women? Yup, women, looking to “snag” a broker, and if they were lucky drag him to the Altar. Brandeis University Grads, Wheaton Grads, Regis Grads, Emmanuelle College, the creme de la creme of Boston’s female colleges all on the “prowl”. During the day mousey little “secretaries” for insurance companies or Banks, and  if they were lucky, one of “The Firms” (Brokerages that is, NOT law firms). They specialized in the trapping of the young “intern” traders and brokers, the ones who still let their  little head do a lot of their thinking for them. A couple of years they would enjoy a good stable of clients, membership in the Country Club, the Tennis Club, invites to the Charity events, seats at the Symphony, weekends on the Cape (Cape Cod), or “The Vineyard”, (Martha’s Vineyard off of Cape Cod, the exclusive weekend get-a-way place for the Uber/Extreme wealthy wannabes. These guys invented the “Trophy Wife” believe me! (The REAL “moneyed up” folks had homes on Nantucket Island, a little further out with the likes of Carley Simon, James Taylor, Jimmy Cagney, Walter Cronkite, you get the idea.)

        But as fast as it was “Liquid Chaos Hour”, it was back to totally empty “ghost town”,to the last person, absolutely no later than 6pm. Sort of an alchoholic “Pit Stop” in the closing laps of the Stock Market equivalent of the Daytona 500, but every day, except Good Friday, Christmas and New Years day and the Fourth of July.

        So why didn’t I jump in with both feet, and “Go for the Gusto”, you ask? Well,…because it was the same “house of cards” we now see, but on a Mini-me level. One of the folks I came to know , (and respect greatly) once told me, “Sure you can make pots ‘n pots of money,…..but you’re gonna die early, or lose it all in a nasty divorce, or drink it, snort it, or shoot it, or otherwise start making bad decisions, become a thief, or a liar, or both, and if you get caught at it, you’ll be blackballed from “the markets”, and even possibly go to jail and become a felon for the rest of your life.” Pretty strong, attention getting stuff huh? Well look  around you , he was right, and even moreso in today’s “markets”!       

        Computers and whiz bang programming cranked the markets up to the “speed of light” that they are today, the 1 million share volumes before “the bell”, the 13,000 Dow Jones point levels, and all that Jazz. The Charles Schwabs, the TD Ameritrades, the “virtual brokerages” who are the “sirens” for fast wealth and happiness. No matter how fast it gets, no matter how knowledgeable YOU get, the bottom line, the fundamental truth of “The Markets”, the one and only real truth is very simple,….YOU WILL ALWAYS BE ARRIVING AFTER THE BIG BOYS HAVE CLEANED THE TABLE! You are an outsider, albeit a savvy outsider the Rule of the Market Jungle is always that an Outsider is always an Outsider, there is no such thing as  “crossover”!

       Sure there will always be “crumbs”, there will always be a few scraps the “big boys”  forgot, but that is all there ever will be. And when you get too many scraps, or too many crumbs, they will go in and “clean your clock”. It is worse than stealing from the Mafia because they will not only “kill” you financially, but pick your bones clean in the blazing sun,…and enjoy every minute of it,… legally! By the time you “get in” on something, they are ready out, by the time you get out, they are busy “shorting” thier stock, and it’s “gotcha!” all over again.

          Trust me on this, I would have been DEAD twenty years ago if I had succumbed to “the sirens”, instead I’m 64, healthy, sure I could use a lot more money, my IRA is shot, my savings is nil, but,….I’m on the right side of the grass typing this blog to y’all.

         I still miss the insane adrenalin rush of it all. And in fact to that end I continue to meet every Monday thru Friday at 4pm with  two “EXTREMELY” wealthy friends who have more money than all the rest of the people I have ever known invested in the Market. They are truly “Players”. We watch the 4 to5 pm Market Wrap-up shows, with the “stem cell Clones” of the guys I used to hang out with , giving their opinions and “whyfor’s” of the day. Speculating on Steve Jobs health,(CEO of Apple Computer if you’ve just been dropped on this planet) and other petty “so-what’s” that make the market move. We watch the “after hours ticker” running across the bottom of the screen commenting  as it goes, “What was the Natural Gas play all about today?” , “Check the tech sector, impressive comeback in after hours.” But it’s all the same, then we wrap up our 4-6 pm “Brokers hour” watching “Crazy Cramer”, (I’m sure is wife has already been proclaimed a Saint), and you just can not imagine Thanksgiving or Christmas at his House! Talk about the Texas Chain Saw Murderer! Cramer makes him look like Mr. Rogers on valium!

         I wrote a blog once way back ,where  I used the quote “God I love the smell of Napalm in the morning” from Robert Duvall in “Apocalypse Now”…..I’m using it again today, because God help me, I still enjoy the “smell” of the markets, that is the only thing that could really ever have been my mistress, and it would have been a really vibrant torrid affair, short, and to the peaks of Everest, dazzling, beyond the imagination of even Stephen King, or Danielle Steele,…and ultimately a fade to black,  as in man’s “ultimate end”,….death.

-30- (Sorry for the length, but it needed saying!)

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