'They looked as if they were going up.' 'That's all? You didn't study the gold market? What about banking?'
'I just read a few books about investing, decided that prices were heading higher and bought.'
'So you follow a system. Technical analysis? Momentum?'
'Nothing fancy. I just look at what happened in the past and what's happening now. If I think the shares are beginning to rise, I buy.'
He studied my face closely, but it was difficult to gauge what he was thinking. I guessed that he was sceptical. A waiter came up and I ordered steak and chips and he Dover sole, vegetables and a salad.
'Ivor Ensworth speaks highly of you. Do you have another reference?'
'I met him through Stanley Slimcop.'
'That's a name from the past! When I first came to the City about forty years ago, I applied for a job at Safron and Slimcop. It was one of the biggest brokers in London. They were about to take me on board when . . .'
'The firm went bust.'
'Yes, that's right. Then he recovered. They call him the Silver Fox. Well I never! Is he the one who's backing you?' I didn't answer.
'I like discretion. Our business is confidential. That's a very strict rule.'
Our food arrived. The steak was OK and the chips were almost as good as the fat tasty ones that we used to sell at "Our Plaice". Ruffish chatted about the good times in the City. Those were the bull markets when shares kept rising and he was paid big bonuses and made lots of money. Then he spoke about the bear markets when shares kept falling. Thousands of City people, including him, lost their jobs.
'When the bad days seemed to continue forever and everyone was gloomy, the market would always bottom out,' said Ruffish. 'The newspapers were another sign. When the front page carried stories about financial crises, the worst was always over.'
'Just like the bank crisis a few weeks ago?' I said.
He seemed impressed that I had followed the news. But he didn't know the real reason.
'Never fails. When there's extreme pessimism, close your eyes and buy. You had the right idea and bought bank shares. I like that,' he said.
'Luck helps,' I said modestly.
'I was tired of relying on a bull market to earn my living,' said Ruffish continuing with his own story. 'So about three years ago, I decided to open a hedge fund business. The good thing about hedge funds is that they can make money when the market rises and falls.'
'How do you do that?'
'I'll explain later.'
'So when did you start managing hedge funds?' I asked.
'About two years ago. I approached Hastings & Murray and they backed me. They own the business, but I've got a stake in it,' said Ruffish. 'Hastings & Ruffish only manage around two hundred million, but we're growing fast.'
'Mr Hastings said that you might have a job for me.'
'Maybe. By the way, what did your father do?'
'He had a fish and chip shop. I helped him.'
'You went to school and served in a fish and chip shop?'
'Sometimes I woke up early and went to the fish market with him. He haggled over prices. They liked him and gave him good deals. I didn't like cleaning fish. I preferred serving behind the counter.'
'Did you ever mind the shop on your own?'
'When Dad was sick, I went to the market to buy fish. Sometimes my friends gave me a hand. We had a good trade on Fridays and weekends, but our prices were too low.'
'Was the business doing badly?'
'Expenses were high, Mr Ruffish. We went down. My Dad died in June.'
'Call me Ruff,' he said sympathetically, 'Must have been hard for your family.'
'Mum died a few years before my Dad. I don't have brothers and sisters.'
There was silence for a moment. I felt uncomfortable. His questions were bringing back memories. I turned away from him and he called the waiter and asked for the bill.
'You grew up quickly didn't you,' said Ruffish thoughtfully. 'Fish and chips! You've been buying and selling since you were a little boy. I think Rob's right. You're a natural trader. Want to join us or go back to school?'
'I'll have a go.'
* * *
Ruffish's office was in Charles Street, just off Berkeley Square. This was Mayfair, hedge fund land, home of some of the sharpest traders in the world. He had told me that hedge fund managers chose prestigious and expensive Mayfair to impress the rich and famous. The Ritz, Brown's, Claridges and other top hotels are close by and their clients can shop in Bond Street and Savile Row and be in walking distance from West End theatres and Soho restaurants. Some hedge funds also have offices in Knightsbridge near Harrods. Investment banks are in the ancient City of London and Canary Wharf, Docklands, on the east side of the River Thames. They are the prime brokers of hedge funds and earn billions in commissions from buying and selling their shares, bonds, currencies and commodities. The brokers also earn interest by lending the hedge funds huge amounts of money to do more deals that in turn bring them even more commissions. Some business!
I rang the bell and on the sound of the buzzer, the latch opened. I entered a musty, dimly lit hallway. At the end of it, was one of those ancient lifts with black, crossed iron gratings. You had to clutch the brass handle to open the door. Inside the tiny space, I pulled the door closed and pressed the button for the fifth floor. The rickety lift went up slowly, making me wonder how often they had tested the cable. It felt as if it could fall at any moment. No way would I use that lift again.
I got out at the fifth floor and saw the 'Hastings & Ruffish' plate. A young brunette, in a low cut light blue summer dress, opened the door.
'I have an appointment with Mr Ruffish,' I said.
The office was completely different from the rest of the building. The walls had been knocked down, leaving a large room. In some ways it was like the Chinese restaurant in Hampstead. Everything was white. The walls were white. Fund managers and other staff were in their own working spaces that were bordered by white round bookcases. People sat on white chairs. White Apple laptops with large flat screens were on their white desks. Next to them were terminals showing prices, charts and news.
In the far distant corner there was a glass enclosure. Through the glass I saw Ruffish looking at his screen. I knocked on his glass door. He stood up, shook my hand and we both sat down on a large white leather sofa.
'Want some coffee, Jack?'
I nodded my head: 'Is this place an office or a hospital?'
'Sometimes an office. Other times a hospital. Depends how we're doing,' replied Ruffish chuckling, despite my cheek. 'Two coffees please Bess.'
She returned with two cups and he introduced us. Bess nodded and walked out.
'Let me explain what you'll be doing, Jack,' said Ruffish. 'We're going to incubate your own hedge fund.'
'Incubate my hedge fund?'
'Just like a chick, Jack. We look after independent fund managers in a warm friendly environment. We help them grow and lay golden eggs for themselves and us,' said Ruffish. 'They put in their own money and we also invest in the fund.'
'How much money must I invest in my incubator?'
'We talk in dollars here and the fund's going to start with $500,000. From what you've told me, you must put in half the money that you have in the stock market. That's about $100,000.'
'I might as well invest everything,' I said, converting my pounds to dollars. 'I've got about $200,000.'
Ruffish looked pleased with the response.
'OK we'll double the amount we're putting in. Your fund will start with $1 million. Hastings & Ruffish will invest $800,000 and you $200,000.'
'Am I going to manage this fund all on my own?'
'Eventually yes. But at first one of the fund managers will supervise you.'
'Do I sell my shares before we start?'
'Only if you think that the time is right. You're going to manage a macro hedge fund.'
'What's that?'
'You can use your trading system to buy
or sell shares, currencies, commodities, bonds. Anything that you believe will make money on the way up or down.'
'How do I make money when the market is going down?'
'You sell short. You borrow shares and sell them. If their prices fall, you buy them back at a profit. If they go up you lose. You can also sell futures and options.'
He noticed my puzzled expression.
'Don't worry. I'll get one of the fund managers to explain how to do it. Our hedge funds charge a two per cent annual management fee and a twenty per cent performance fee. The only investors at this stage will be the firm and yourself. You must take investment exams before you are allowed to manage money for outside investors. We're going to pay you a small salary of $4,000 a month and you'll receive an annual bonus of five per cent on any profit. Are you happy with that?'
Happy? I was ecstatic. I would get $48,000 a year. That was about £30,000, about £10,000 more than Dad paid himself, before he died. If the fund went up I would make money on my own investments and get a bonus as well. What a deal! Some work experience!
'Come and meet the team,' said Ruffish. 'We have four fund managers here, each doing their own thing with emerging market funds. We incubated them and their funds have grown rapidly.'
'Emerging?'
'Stock markets in developing countries - China and the rest of Asia, Eastern Europe, Africa and South America.'
'What about Britain, Europe and America?'
'There are too many of those hedge funds. We can't compete. You'll see at our morning meeting that we have seriously smart guys who know their countries. One is a mathematician, another an astrophysicist, the third a barrister and the fourth an accountant.'
'And me with my mediocre GCSEs!' I thought. 'Maybe I should get the hell out of here.'
Ruffish seemed to read my mind: 'You're an experiment Jack! Just do your best.'
He led me to a door on the other side of the room. We entered a passage with an adjoining toilet and shower room on the one end and a fairly large meeting room on the other.
It had a large round table, a Reuters screen, a laptop and whiteboard on the wall at the far end. Soon after we sat down, the other fund managers filed in. Ruffish introduced me and asked them to explain what they did. They were casually dressed. No ties and jackets. I felt out of place and took off my suit jacket and tie. They looked at me curiously. The meeting was totally relaxed. Bess came in with a notebook and took notes. I noticed two of the men ogle her cleavage. She didn't let on whether they annoyed her.
Krishna Doomassamy, small and thin, with fine features and an open necked white shirt was the mathematician. He played the Asian markets, including India, Singapore, Malaysia, Indonesia, Thailand, Hong Kong and Taiwan. He looked as if he was in his early thirties. Tong Chong Ping, an astrophysicist, with black framed glasses, was a little taller, but just as slim. It was difficult to gauge his age. He could have been anywhere between twenty five and forty. Tong spoke with a thick Chinese accent and his speciality, unsurprisingly, was China and Hong Kong.
Aram Zabkian, shook my hand warmly, telling me that he came from Estonia in Eastern Europe. His light pink shirt was open at the top and exposed a hairy chest. He was an accountant, about forty, balding, stocky with bulging muscles and had a neat small beard. It was evident that he irritated Bess. He touched her arm when he asked her to pass him a glass of water and she pushed him away in disgust. Aram's fund covered Russia, the Czech Republic, Poland, Hungary, Estonia and other Eastern European markets. The final fund manager came in a little late. She was a big woman, who towered over the others. Her long black hair was braided and she wore a light cream suit. I assumed that she would have an African accent, but it was very British.
'Are you the barrister?' I asked meekly, guessing that she was the lawyer who Ruffish had talked about.
'Graduate from Oxford University, no less,' said Krishna. 'Themba Shaka Mafuta meet Jack Miner.'
I shook her hand.
'Call me Maffie for short,' she said smiling. 'I mainly cover resource shares in Southern Africa and South America.'
'Maffie is a descendant of the Zulu King Shaka. He conquered Southern Africa,' said Krishna smiling. 'Watch out for her! Shaka was a brute. If his soldiers were out of line, he would beat them with a "knob kierie".'
He stood up, clutched a long ruler and waved it around like a big stick.
'Knob kieries are thicker than that!' laughed Maffie, grabbing the ruler from Krishna and gently tapping him on his shoulder. 'My great, great, great, great, great granddad, used to hammer them on the head if they didn't perform.
How have you done this month, Krishna?'
'I think you'll reprieve him this month, Maffie,' said Ruffish. 'He's doing pretty well. And you Maffie. Are you winning like, your great, great, great, whatever?'
'The market's doing OK, thanks Ruff.'
'What did you do at university, Jack?' asked Tong, looking me up and down.
I felt embarrassed and shuffled about restlessly.
'Jack's going to university later. We're trying out something. Raw talent against you geniuses,' said Ruffish.
'Is he doing work experience, Ruff?' asked Aram. He had obviously worked out that I was no more than sixteen or seventeen.
'We're incubating him. He's going to run a small fund,' replied Ruffish.
'The Schoolboy Fund?' scoffed Aram. The others looked at me sceptically.
I thought that I had better stand up to this lot. Otherwise they would ride all over me.
'The Aquarium Fund?' I suggested.
'Sounds a good name, Jack,' said Ruffish. 'Jack used to help his Dad in a fish and chip shop. He bought fish at the market. He knows value. Have any of you guys traded the real thing? Been in a real business?'
'I've traded tins of baked beans, sardines and sweets. We'll offer you a special discount at my Dad's grocery shop, Jack,' said Krishna, half joking.
'Don't laugh guys. I'm sure you've read in the papers about schoolboys and girls who beat fund managers,' said Maffie. 'Are you happy to supervise Jack, Maffie?' asked Ruffish.
'Sure. Schoolboy and Woman. Aquarium will surprise you bigots,' joked Maffie.
During the rest of the meeting they talked about various markets and how their funds were doing. Afterwards Ruffish and Maffie took me to my own working space. On the desk were a cordless phone, large laptop and a Bloomberg screen showing prices, charts and news reports.
'Do you have chart books here?' I asked.
'We run off charts on the printer, but we also subscribe to a chart service,' said Ruffish. 'I'm old-fashioned, I'm the only one that looks at them.'
'If Jack wants them, you're back in fashion,' grinned Maffie.
* * *
The days passed quickly and autumn and winter swiftly followed. Early in the morning I would go for a run with Jazz and Pattie, have a quick shower, climb on to a bus in Swains Lane, opposite the Heath, and be in the office by 9am. By December, it was too dark, cold and wet to go out for a run, so the dogs had to wait for Martha. I hated going to work in the grey pre-dawn light and coming back in the dark. Longed for the spring.
Ruffish insisted that I study for the Investment Management Institute examinations. It was a pain to wade through the boring text books in my free time. But Ruffish and Maffie said that I had to do it. If I didn't pass, the Financial Services Authority, the market regulator, wouldn't allow me to manage money for investors. In the meantime I could only trade on behalf of myself and the firm.
I kept in contact with Ivor Ensworth and Tom and Tess by email. He invited me to go to South Africa for Christmas, but I decided to spend it with Martha. Occasionally I would go and visit the Slimcops or go out with them for dinner. I was grateful that Stan had paid off Dad's creditors and especially happy that Gill Derby had received her back rent plus interest. Bailey & Baton were at last off my back. Stan's solicitor was a tough negotiator and had pushed the furious Baton's fee down to a derisory £1,000. Even that was far too much!
/> Leila introduced me to quite a nice girl. Suzi, an artist, was plump and pretty, but not really my type. I went out with her a few times and I'm not sure who dumped who. She didn't seem to be terribly keen. I spent evenings at my local in Swains Lane and other pubs in Hampstead or Highgate and met a few girls. We went to restaurants and movies. But there was nothing serious. I played football on Sundays and had drinks with the players afterwards. I didn't have much in common with them other than joking about football teams we supported. None of them were interested in cricket. I was an outsider from Yorkshire and accepted it. I felt pretty relaxed and the bad times, including the bridge, became distant memories.
Newspapers no longer carried anything about the Yapolovitch murder. Case unsolved. Old news. I was no longer scared and money wasn't a problem. There was more than enough to keep me going. Sometimes I thought about Sandy and Maggie. Wondered what they were doing. Maffie was now the only girl who interested me, even though she was older. Unfortunately she only wanted me as a friend. We often went to lunch together and joked around.
I bought a book on Shaka, King of the Zulus. He was an exceptional military strategist. So much so that historians called him the 'Black Napoleon', after the brilliant, ruthless, French Emperor and Commander who dominated Europe around 1800. Shaka's favourite battle manoeuvre was the pincer movement, which he called the 'Horns of the Buffalo'. His Zulu impis, or regiments, would advance towards the enemy in the formation of a buffalo's horns. Shaka's main force was in the centre and there were regiments on the left and right, just like horns. The impis in the centre would run towards the enemy with their spears held high. As soon as they clashed, the regiments on the left and right horn would turn inwards and surround the enemy from the rear. Shaka never lost a battle. Dingaan, his jealous brother, murdered him.
'Maffie, do you think Shaka's tactics could work in the markets?' I asked when we were having a light lunch in a French brasserie, near the office. It was spring and for a change, the sun was shining. I enjoyed going there with her, as she spoke French and joked with the waiters.
'Shaka believed that the best form of defence was attack,' she said. 'I guess that's what I do. Research shares and without any hesitation, buy or sell. If you vacillate you lose.'
Trader Jack -The Story of Jack Miner (The Story of Jack Miner Series) Page 12
