by Sam Polk
His words had their intended effect. I went from being pleased that I’d scored so well on the test to feeling jealous.
“That’s great,” I said. “Congratulations.”
“Thanks, man. How’d you do on the test?” he asked, pointing to the paper I was holding by my leg.
I looked at him a second. I thought about how badly I felt when someone trumped me intellectually, and the endlessness of this competition.
“I did okay,” I said, and walked away.
CHAPTER 21
The Least Cool Thing to Order at a Bar
¤
The weekend after I aced the accounting final at the end of the training program, I moved down to Charlotte to start work on the Bank of America trading floor. I bought a two-door Dodge Neon with manual windows and a tape deck, and rented a small apartment. Though I’d lived alone in San Francisco, this was different. There was no pile of cocaine under the bed, no NyQuil, no robberies or fistfights. I was starting to feel like an adult. But I was also aware of my propensity for self-sabotage and was nervous that I’d blow this up, too.
I was rereading Robert B. Parker’s Spenser detective series, my all-time favorite, about a tough, well-read, wisecracking detective who quoted Keats, always won fights, and treated his girlfriend with tremendous respect. What I loved about Spenser was that he lived according to a rigorous internal code. My favorite Spenser novel was Early Autumn, in which Spenser rescues a scrawny, neglected young boy and takes him to a cabin in the woods and, through a rigorous summer-long program of exercise, reading, and manual labor, teaches him how to become a man.
On my first day I woke at 4:00 a.m. and ran three miles on the empty, dark streets of Charlotte, then drove twenty minutes to work, my new car slipping through the night like a shark. The trading floor in Charlotte was a giant room three stories high. You entered from a balcony that ran around the perimeter of the room, overlooking the floor. To get down, you had to walk down a long stairway, in view of all the traders. I was the first person to arrive. I sat alone for half an hour, tingling with anticipation, the stillness of the air broken only by the occasional chirp of a telephone.
At six the second-year analyst arrived and showed me how to make the packets I’d hand out every morning. After the lesson was finished, I sat back down on a folding chair and watched traders stream in carrying the Wall Street Journal in one hand and coffee in the other. One shook my hand. Another sent me for a second cup of coffee. There was no desk for me; I was just another kid there to fetch lunch.
When Marshall Masters stepped onto the trading floor, heads turned and eyes followed him as he walked past the rows to his desk. His blond hair was graying, and he looked older than his thirty-eight years. He was tall, and though his frame was athletic, his gut strained against his shirt, evidence of years of client dinners. I walked up to him and we shook hands. He pointed to a trader in the next row and told me I’d be working for him and to introduce myself. Then he sat down to pick up the two calls that were already on hold for him.
My new boss, Richard “Hoff” Hoffstedter, was a lump of a man with intense eyes and a Wayne Newton shock of black hair, which he tended like a groundskeeper. A senior trader, Hoff was known for his maniacal precision, consistent profitability, and the occasional emotional explosion. I got to see an explosion on my first day.
Every time a corporate bond trader buys a bond, he sells an equivalent amount of treasury bonds to hedge his interest rate risk (leaving him exposed only to credit risk—the risk the corporation will declare bankruptcy—which is what he’s an expert in). That morning Hoff noticed that his corporate bond portfolio was not fully hedged. He assumed it was a clerical error made by the intern, and yelled out, “Anderson!” But Cliff Anderson wasn’t there; the Friday before was the last day of his internship. Hoff called over an assistant and instructed him to check all the trades and find the error. The kettle was on, set to a simmer.
The assistant finished checking the trades and said he couldn’t find an error. Hoff stared at him, his face reddening.
“Check it again,” he said. “Hurry.” If interest rates moved 1/10th of a percent, he’d lose $15,000. All traders dislike losing money; Hoff loathed it.
The assistant returned after rechecking the trades. This time he stood a few feet back from Hoff.
“I found the problem,” he said.
“What is it?” spat Hoff.
“Anderson sold treasuries when he was supposed to buy.”
“Let me see that!” Hoff screamed. As Hoff examined the trading pad, his chest started rising and falling in heavier and heavier breaths. He began to draw in air through his nose with great intensity. His face turned purple. I knew exactly what was going to happen.
“Fuck!” he screamed. He checked the price the trade had been executed at and then checked the current market price: the market had moved 1.5/10ths of a percent. He was down $150,000.
“Fuck!”
He picked up the phone, hit the direct line to the treasury desk.
“This is Hoff. Listen, I bought when I was supposed to sell. Fuck! Fuck! I need a bid on twenty million long bonds. Fuck! Fuck!” He listened, then yelled, “Done,” executing the trade. “Goddamn it!” he shouted, and slammed the phone down.
The floor was silent. Everyone watched Hoff. He sat there with his chest heaving, as if he’d just sprinted a mile. Then, suddenly, his head exploded.
“Get me Anderson!” he roared. “Get Anderson on the fucking phone RIGHT NOW.”
Cliff Anderson was in all probability enjoying the high of a recently smoked joint during a leisurely drive back to Vermont. Anderson had a taste for weed and a more-than-occasional beer, I was told later, which was why he made so many mistakes.
The assistant got Anderson on the phone. Hoff picked up the line.
“Anderson, you goddamn punk. You little fucking prick. You bought bonds instead of selling. I’m down a hundred and fifty. That’s more than your life is worth, do you hear me? Your entire life! I’d short your life huge at a hundred fifty thousand dollars. Where are you, in the car? Driving home? Well, I tell you what. You better keep driving. All the way, straight to Vermont. Because if I find you, if I see you again, I’m going to rip you limb from limb. Do you hear me? If I see you again, you are dead. Dead.” He slammed the phone down and stalked off the floor.
Hello, Dad, I thought.
I worked like a surgery resident. Twelve to fourteen hours a day during the week, and five or six hours both days of the weekend. I created flash cards for every bond Hoff traded, so I could study all the variables that impacted the price of a bond: credit rating, deal size, call schedule. I’d review them in bed before I went to sleep. I was the first to arrive and the last to leave. Walking to my car at night my brain would throb.
Hoff was old school, so I fetched his breakfast (scrambled eggs and bacon), lunch (turkey sandwich), and Diet Dr Peppers. He’d whip out the money-clipped wad of bills from his front pants pocket and peel off a few twenties—barely making a dent—to pay for both our lunches. Traders rarely carry wallets. Wallets are too small to fit their wads of cash.
Hoff was extremely successful, and I could tell why. He was meticulous and never got distracted. He could sit silent and focused for hours at a time. Just when I thought he might never speak again, he’d lean back and scream at the top of his lungs, “OH, BID TEN MILLION BUD THIRTY-TWOS!” and I’d startle, spilling my coffee.
At the end of the day, Hoff would patiently answer all my questions, though if anyone was within earshot, he’d tease me for asking so many.
“I’m going to call you Dr. Polk,” he said, “because you are painful, like a dentist.”
But he took an interest in me. He encouraged me to take the CFA exams, a three-part series of once-per-year tests, the Wall Street equivalent of an MBA. He let me call him on the weekends to ask questions about bo
nds. For Christmas that year he brought in a dentist uniform shirt with “Dr. Polk” embroidered on the front and burst into laughter when he handed it to me. For a while I thought he might be the mentor I was looking for, but one day an incident on the trading floor changed my mind.
Traders love to bet. They’ll bet on anything, especially if it involves embarrassing someone. When Hoff learned my middle name was Iverson, he offered me $500 to put my hair into cornrows. “Like Allen Iverson!” he screamed. I declined. Another guy was offered $200 if he’d eat one of everything out of the vending machines. Huge bets were placed on how many donut holes an intern could consume in an hour.
I came to understand just how much money was liable to be thrown around. One morning at ten, I was startled by a shout: “She’s here! She’s here!” Neil, a young trader, walked onto the balcony overlooking the floor, escorting a young woman carrying a bag. Every eye was glued to her as she walked down the stairs onto the trading floor. Neil guided her over to Hoff, who didn’t look up from his monitor.
“This is him,” Neil said. “This is the guy.”
“Do you want me to do this here?” the woman asked.
Everyone laughed and a cheer went up.
“Right here,” Neil said.
She put her bag down and spread some newspapers on the floor. Then she took out hair clippers. While Hoff continued to type, she began to shave his head. Hoff didn’t look up from his screen as, clump by clump, his beloved mane fell to the floor. The entire trading floor stood to watch. When she buzzed the last clump from his head, everyone clapped and cheered. Then they sat down and went back to work. Neil handed Hoff a stack of cash.
I learned later that they were all out at a bar the night before, ribbing Hoff about how much he loved his hair. Someone asked Hoff how much it would cost for him to shave his head on the trading floor. Hoff thought about it for a second.
“Six thousand dollars,” he said.
Within an hour, the traders had collected the money.
That day Hoff pocketed the price of the Dodge Neon I was driving. It was hard being new on Wall Street, seeing people throw around more money on bets than I had in my checking account.
But it wasn’t just the amount of money that bothered me. I recognized their behavior as adolescent, and I was trying to grow up.
But I was also desperate to fit in. To become a full-fledged trader, instead of a coffee fetcher, I needed the traders to like me. The hardest part about the Hoff-haircut story was that the traders had been out as a group, without me. I was worried about what would happen when the traders found out I didn’t drink.
A huge part of being a Wall Street trader is entertaining. Even in Charlotte, we were always going out to dinner and drinks with clients, or flying to New York to take clients to ball games.
That was one of the reasons Marshall Masters was so beloved. The only thing that approached Marshall’s appetite for risk was his appetite for partying. He had a legendary night game. He was out with clients every single night—at dive bars in Charlotte, or swanky restaurants in Tribeca, having flown up to New York for the night—cocktail always in hand, until two or three in the morning. Then, he’d be at his trading desk by six. It was rumored he got two hundred text messages a day. His voice mailbox was perpetually full. He’d been a groomsman in over thirty weddings.
I was sort of the opposite of that, and being sober made things much harder. Without the liquid courage of alcohol, I had a tough time participating in conversations at client dinners. I’d sit there, mute, trying to will the waiters to clear the plates quickly so we could get the check and leave.
None of the traders had noticed yet that I didn’t drink. I was worried that when they did, they might dismiss me completely.
I missed drinking, not just the joyful release of a night out, where hours flew by in a way they never did while sober, but also the comfort that came from knowing I could, with the crack of a beer can, escape from my mind. But even though I yearned for a beer, I never once considered starting up. In the year and a half I’d been sober, my internal shame and self-loathing had been replaced with something new, something that still felt awkward to me—a sense of self-respect.
One night about a month after I started working, I went out to Connolly’s, a dive bar across the street from Bank of America, with the traders. TJ Johnson, an imperious frat boy from Ohio, was ordering drinks. I sidled up to the other end of the bar, hoping to quietly order my Diet Coke. He saw me.
“Mr. Polk! What can I get for you? I’m buying,” he practically screamed.
I leaned toward him even though we were a good fifteen feet apart, and said, “Diet Coke, please.” I was quite sure that was the least cool thing a man could order in a bar.
“What?” he yelled.
“Diet Coke,” I said, a little louder.
He shook his head and cupped his hand to his ear.
“I can’t hear you. Speak up!”
Just then, the bar went silent as I yelled out, “Diet Coke!”
The spotlight descended.
“Diet Coke? Come on. Let me get you a drink,” shouted TJ.
I shook my head and mumbled for the fourth time, “Diet Coke.” Bewildered, he turned to the bartender and placed the order.
When the drinks were up, I went over to grab mine and he looked at me funny.
“Do you not drink?” he asked.
“I don’t,” I said, and walked quickly to the other side of the room. I knew my secret was out.
It spread like wildfire. The next morning Marshall was talking about taking the desk out that night for drinks. He spied me walking along the aisle and said loudly with a toothy smile, “Let’s take Sam out and get him drunk!” I was too far away to respond and I watched Neil lean over and say, “Sam doesn’t drink.” I saw Marshall’s head shake in disbelief.
“What? Sam, is this true? Do you not drink?” Marshall yelled.
The desk was silent. My worst nightmare had come true. I froze.
Marshall looked at me a second and then waved me over. I walked to his desk and squatted down next to him, hopeful that he would speak more softly if I were closer.
He was silent for a second and then asked me quietly, “Is there a reason that you don’t drink that you don’t want to talk about?”
I was startled but after a moment said simply but firmly, “Yes.”
He looked at me as if he recognized something.
Then he said, “Okay,” and turned back to his monitors.
CHAPTER 22
The Ice Melteth
¤
When Marshall reacted to the news of my not drinking with gentle respect rather than the ridicule I anticipated, I didn’t know what to make of it. I walked away from that conversation grateful but puzzled.
Marshall started asking me to walk with him for coffee every couple of days. He asked questions about my family and told me stories about his. He didn’t ask me directly about my drinking, but he hinted that he understood I had a history, and he was okay with that. When he was in New York, he’d call the desk and if I picked up we’d chat. I didn’t think much of it, except that I was pleased I had earned the attention of the boss.
A few months later, end-of-year bonuses were given out. Because I was in the analyst program and had only been working six months, I wouldn’t receive my first bonus till next August. I watched, racked with jealousy, as the traders went into a conference room and came out with bonuses several times what I’d earn that year.
Bonus time on trading floors is when personnel changes happen. Traders will wait until their bank accounts are fattened with their year-end bonuses before announcing that they’ve accepted new positions elsewhere. This year, the first to leave were Neil and TJ, who’d scored huge contracts with CSFB and Morgan Stanley, respectively. Neil had backed up Marshall, who was often away from his desk in risk mee
tings or traveling to meet with clients. So Marshall called me and asked me to serve that role, in addition to my responsibilities with Hoff. I was thrilled to be allied with two powerful men.
The next week, Hoff’s desk was empty, and a trading assistant told me he’d resigned the night before. He’d never even told me he was thinking about leaving, and I felt betrayed. But I also knew this was good for me.
That afternoon, Marshall called me. “I want you to trade Hoff’s sectors until we find a replacement,” he said. “It’s temporary, but it’s a big opportunity. Are you ready, Sammy?” he asked. No one had ever called me Sammy before, but Marshall had started to, and I sort of liked it.
It seemed crazy that Marshall wanted me to become a trader so soon. First-year analysts were almost never allowed to trade. Traders worked with hundreds of millions of dollars a day. The risks were simply too big. There were guys on The Street still fetching coffee in their fourth year. I felt like a nurse being asked to perform heart surgery.
No, I thought. “Yes,” I said.
“I want you to call me five, six times a day,” Marshall said. “Ask all the questions you come up with. I am going to teach you how to trade.”
All of a sudden grown men were screaming at me, people were calling me from London, and I wasn’t fetching anyone’s coffee. I spent hours every night writing out what I would say on the morning call that was broadcast over loudspeakers in London, New York, Charlotte, Chicago, and Los Angeles, so I might sound like I knew what I was talking about. While the other traders spoke from memory, I hid a piece of lined notebook paper on my lap with my entire speech written out.
I made some mistakes, but Marshall supported me. A few times I heard salesmen complain about me to Marshall. Marshall said, “Give him time, just you watch,” and never said a word to me about it.
When Marshall was in New York, I’d speak to him on the phone a dozen times a day. Usually the calls lasted ten seconds or less—the rapid-fire staccato traders learn to speak in—but at the end of the day, he’d take a few minutes to teach me trading protocol or tell me stories about being a young trader himself.
