The other day I logged in and a friend sent me an IM link to a review for the new Wall Street movie and wrote, “look at what this jerk said about equity guys”. It’s titled Wall Street on Wall Street and it’s posted on a the Business Insider. The article was written by Randall Lane and includes commentary from industry insiders including Lawrence McDonald who is the author of A Colossal Failure of Common Sense and former Lehman Brothers VP in distressed debt and convertible securities trading. After my initial read of what McDonald had to say about equity guys whom he refers to as “lugheads” – I was ready to attack. Here read the following quote for yourself:
MCDONALD: It was hard for me (watching the movie)—it brought back a lot of memories, you know? It just was hard for me to watch it because I just remember going through that and losing everything.
The culture of the employees, the trading floor…I thought all that was pretty good, though some of the machines looked funky. And those equity guys were portrayed very accurately, like the lugheads that that know their stories on a couple of [stocks]. At Lehman the difference between equity floor and the fixed income floor was like night and day. It’s like the Harvard, MIT crowd in fixed income and then it’s like UMass on the equity floor. So many equity guys totally got blind-sided. They didn’t understand credit derivatives, and they just were so wrapped up in their own little stories.
Then I read it two more times and thought to myself…. You know what? How can I be angry with this guy – he’s absolutely right. You can’t retort when you’re on the same side of the argument. We are lugheads and to assume schools like University of Massachusetts is being way too too generous – it’s more like College of Staten Island.
What I will say though is this: What does IQ and where you went to school have to do with trading? All you need is a monkey with brass balls to make markets. Good traders don’t give frog’s fat ass about the fundamentals of a given stock. It’s about liquidity, how much it trades and where the players are. My buddy’s father used to train Harvard Business School grads – One kid was tops in the naval academy and flew F-16 fighter jets but couldn’t trade himself out of a paper bag. Try pricing 5.7 million shares of Oracle for sale at 3:55 p.m. on a triple witch. Trading is about street smarts, instinct and balls – It takes all three. You could put any name in front of a good trader and he can glance at a chart, see the levels, average daily volume and trade the stock effortlessly without ever knowing what the company does.
Harvard guys are soft, they have no balls and should be analyzing stocks – not trading them. The best traders I ever saw (before it all became automated and electronic) were street hustlers who barely graduated high school. When it came to making markets and trading themselves into the money these guys would absolutely crush any MBA from Princeton.
It’s not real money – it’s a game. And if you’re not good at the game then you can’t play anymore… and if you are good at the game and forge some solid relationships then you can do very well for yourself. I know a guy who is one chromosome away from walking on all fours who’s “best pal” works for a monster mutual fund in Beantown and pockets north of three million a year.
It’s a game , plain and simple. Sometimes you’re working the game console and sometimes you’re the late night circus monkey but either way you can take your Ivy League grad school degree and shove it up your ass.
Respectfully,
Dopey
