how to lose $100 million by yelling at people

He was a slavedriver. He yelled constantly. Nothing was ever his fault and you never did anything right. If his pencils were out of order on his desk he yelled. If you got him the wrong dressing on his Greek salad he yelled. If you got him the right dressing on the salad he yelled. You get the idea. He also managed a half billion dollars 39 floors above 1 Sansome Street in San Francisco. And my wife was telling me she was going to work for him.


You’re the only one he’ll never yell at, I told her.

He offered her $40,000 at a time when she was making something like $25,000 toiling for Bear, Stearns –  a company helmed by an octogenarian who commanded employees to reuse paperclips to save money. The same guy, by the way, who gifted $80 million in year-end bonus to four members of the executive team. And then wrote a letter to thousands of back-office staff announcing his decision to generously grant their Christmas bonuses to charity. Not kidding. He also co-wrote a book with his imaginary friend Haimchinkel Malintz Anaynikal. I’m not making that up. Google the name “Haimchinkel Malintz Anaynikal.” It’s all there. I don’t lament the demise of that company.

Anyway, I told her that the hedge fund manager would never yell at her. You’re the only person who he’d be afraid of, I said. I meant that in the best way.


That turned out to be true, but it didn’t make the job any better. She woke up at 4 and arrived at the office by 5. They reimbursed her taxi fare every day and often provided lunch for everyone. They had the latest equipment, laser-etched glass walls in every office, and a hot secretary named Lori who had two beautiful retrievers. I’m talking about her dogs, by the way, but her other retrievers were beautiful as well.

The job stunk because he yelled at Zack, at Dana, at Lori, at Irene, and at the folks from Bear, Stearns. My then-wife reconciled all the trades each morning from the previous day. Her job was to search for errors in the way that Bear, Stearns cleared the trades. She found very few, but when she did find them, as you can imagine – there was more yelling. She also distributed the paychecks, which never made any sense to me. So she knew what every employee there was taking home every two weeks. Let’s just say that all of them were overpaid in order to compensate for the yelling. One trader named Stu moved his office upstairs to the 41st floor, at his own expense, just to get away. Still worked for the fund but moved his office to keep his head straight. It’s hard enough to trade when you’re listening to Handel’s Water Music, let alone a screaming madman.

Usually the trades were profitable but sometimes they were not. My wife told me that the fund had made more money when they had worked out of a room on the 36th floor, everyone sharing three hundred square feet. Less yelling then, too.

She said the firm had done better when it was brand new and hungry. But then a few Hollywood actors put a lot of money in the fund. They moved offices and spent a lot of cash on equipment and carpeting and that fancy laser-etched glass. By the way, everything I’m saying here is exactly how I remember it, even down to the names I’ve written. And I remember it well. It was the worst year of our marriage to that point. With all the yelling at the office it didn’t make for a very good home life. Add that to the fact that I was in law school, which sucked donkey. Anyway.

Remember, she was reconciling all the trades, so she saw the daily profit and loss. Eventually the trades got pretty bad. And then one day my wife came home worried. The fund had lost a ton of money.

How much? I asked.



She was loyal and wouldn’t say exactly. It became public knowledge later that the number was at least $100 million. A hundred million dollars! Holy Crap! She was making $40,000 at the time. We were both 24. That was pretty good money in 1996. Even in San Francisco. The next day, before she left for work (and before I started to wonder if I was going to get out of bed at all that day), I turned over and looked at her and said:

You should ask for a raise today.

That’s what I said. Really? She asked back.

Yes. At least ask for $50,000.

If you don’t understand why I told her to ask for a $10,000 raise, then no explanation will matter. And he gave her the raise on the spot. No questions asked. From this I began to form the opinion, developed over later years, that even the bad people might have a little bit of good inside. And they’re just upset because they’re stuck. And they value loyalty. What he did when he gave her that raise is say, “I value the back office staff.” That meant a lot. Still does.

Soon enough the fund went into the toilet. It was the beginning of my married years but really it was the beginning of the end. Struggling to make a living doing things you both don’t want to do isn’t easy and takes its toll and it’s harder to get back to break even in a relationship than it is on a trade. I hated every moment of law school and she hated every second of that job, no matter what it paid. At that point I started to realize that I’d never practice law. But I didn’t realize that instead of law I’d start and bankrupt a dot-com company, and find a currency trader who stole $750,000 in the process. But that’s a story for another time.


About abwehra group

The Art&Science of Trading Gold
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