If you came to my old Wall Street office with a box of doughnuts and a few ideas that would make me money, I would pay you $2 million in your first year. I had to. If I didn’t, someone else would.
That’s exactly how my old research director at Cramer Berkowitz, my old hedge fund, got his start. He cold-called me, told me he had five great ideas. I didn’t know where he went to school—I still don’t. Matt brought the Krispy Kremes at 4 a.m. piping hot and told me I should bet the farm on his picks. They all hit home, and we made about $10 million off them.
I doubt he knew how badly I shortchanged him when I gave him a $2 million bonus after his second year; I had made twenty times that from him. For all he knew, he was just some kid from Long Island who hit the lottery when he was 24.
Wall Street is still the only place on earth where if you do some work, make some calls, study the books, and arrive at some undervalued ideas, there are plenty of companies willing to pay you not just a salary and a little end-of-year bonus but a percentage of what you deliver to the bottom line. The payback is instant, and it doesn’t matter what you look like, where you come from, or what you have done. When it comes to meritocracy, when it comes to opportunity, and when it comes to the velocity with which you can strike it rich, nothing can touch the pure molten cauldron of the brokerage-investment-house complex.
At my old hedge fund, I must have hired at least a dozen people who simply struck me as people who could make money for my firm. Of course that means I would hire some clunkers, including the son of one of my Harvard professors who ultimately fell asleep at his desk and cost me thousands—then wrote a nasty book about me—but there were a lot more of the good guys.
Unlikely people. Awkward people. Look at Governor-elect Corzine and Mayor Bloomberg. When I would go down to the fixed-income floor at Goldman Sachs where Jon worked, he was just this awkward, soft-spoken hick from Illinois with no presence at all. But he had the numbers—bonds were rocking—and he was printing money for the firm. So even though he wouldn’t otherwise stand out in a sea of traders, he got the top job at the firm and made hundreds of millions of dollars—because he earned it. Lloyd Blankfein, the heir apparent to Hank Paulsen at Goldman—no different. Nebbishy guy, rough-hewn, not a diplomat. I remember being in a meeting with him years ago where he pushed me around like I was a moron. But I was told he was a guy you had to lie on the tracks for, because he delivered numbers.
I still remember Bloomberg schlepping his boxes around to hedge funds like mine in the eighties. Little guy, strange Boston accent, but he knew what traders wanted, which was analytics, not just news. He knew that people wanted a box with a brain, especially when it came to bonds, and he wiped out Telerate, then the gold standard, in less than a decade with his Bloomberg terminals. Unlikely billionaire is right.
Not everyone has the talent to make money. Many people can’t tell the difference between a stock and a bond. But that’s another reason to love Wall Street. If you catch on at any of the major firms, they will train you to do this stuff while paying you decent coin as you learn. Then after you learn, you can go bring Krispy Kremes to the next crop of Cramers out there.