Free to Trade (5 page)

Then, fifty metres from the line, two green shirts barged past me as a Kenyan and an Irishman battled for the line. I told my legs to move faster, stride longer, but they didn't obey. Suddenly the crowd were cheering for the two backs a yard or two ahead of me, not for me. It was as though I were slowly moving backwards.

I made it over the line in third place and won a bronze medal.

For several months afterwards, I basked in the attention I received. From the media, from people at work, people I met in business, even from people in the street. But despite the euphoria, I could not hide a simple fact from myself. I had lost. I had put everything into that race, a year of my life had been devoted to that one-and-a-half-minute period. And I had lost.

My time was easily my personal best. As I resumed training and racing the next season, my times came nowhere close. It began to depress me. I became more and more sure I would not be able to better that one effort. And it would take all my energy just to get close.

I wanted time for other things. For friends. I wanted a job that would stretch me. I wanted a new challenge.

So I quit.

When I told Frank, I expected him to be furious with me. But he took it very well. In fact, he was very supportive.

'I've seen too many young men sacrifice their lives to athletics,' he said. 'Go out into the world and do something.'

Secretly, I think he knew, as I did, that I had got as far as I was going to go. He didn't want me to lose years of my life aiming for the gold medal which would never come.

So I gave up. And I had gone out into the world to win at something new. Trading.

I sped towards the pond, passing a couple of middle-aged, wheezing joggers moving at walking pace. A red setter bounded up towards me, ignoring the shouted plea of its owner to heel. He bounced up and down beside me for a few yards before darting off after a terrier yapping at a squirrel in a tree. He leapt over an embracing couple under a tree, who took no notice.

I still needed to run. I ran three or four times a week, usually the three or four miles round the perimeter of Hyde Park, as fast as I could. I needed my fix of adrenalin, the masochistic pleasure of feeling totally exhausted.

I thought of yesterday's Sweden trade. A smile came to my lips as I recalled the sweet feeling of knowing I was right and the market was wrong. Or rather Hamilton and I were right. I had done well for a rookie trader. It had been the first time I had been under pressure, real pressure, and I had come through it well. I had been scared at one point, but I had held my nerve. The fear had been a necessary part of the exhilaration. Just as a runner had to go through the pain to experience the adrenalin rush, so a trader had to feel fear.

I looked forward to what Hamilton would have to say to me when he returned. It had been my first real opportunity to prove myself to him, and I had taken it. I hoped he would appreciate it.

I dodged a gaggle of chattering Arabic women out for an evening stroll in their black yashmaks and gold facemasks, and veered left towards the exit of the park. I lengthened my stride as I ran the last couple of hundred yards to my flat, nagging doubts snapping at my heels.

I pulled the keys to my building out of the pocket of my shorts, my chest heaving, sweat soaking my exhausted muscles. I opened the door, stepped over the debris of unopened junk mail and freesheets, and pulled myself up the stairs to the first floor.

I let myself into my flat, quickly stretched my muscles, and collapsed on the sofa. I stared around me, too tired to move. It was a small, convenient flat. One bedroom, a living room with an alcove kitchen just off it, and a hallway. I kept it tidy; I had to since it was such a small space. The furniture was simple, practical and cheap. On the mantelpiece was a small selection of my most treasured running trophies, and a black and white photograph of my father and mother leaning against a dry-stone wall. They smiled down at me with the lost happiness of twenty years ago.

It wasn't much, but I liked it. A convenient bolthole.

Groaning, I pulled myself up off the sofa, and hobbled on stiffening muscles into the bathroom for a soak.

As soon as I got to work the next day, I grabbed the
Wall Street Journal
from Karen's desk where it was left every morning. I was surprised to see the newspaper shaking slightly as I looked down the column of stocks for the ticker GYPS.

There it was. Eleven and a quarter dollars. The stock had risen by more than 50 per cent overnight! I turned round to see Debbie coming into the trading room clutching a cup of coffee. She saw the page I was reading.

'Well?' she said.

'Eleven and a quarter,' I said with a grin.

'I don't believe it!' she said, grabbing the paper from me. She let out a whoop, and threw the paper up in the air. Everyone turned round to look.

'I'm rich!' she screamed.

'Not very rich,' I said. 'It's only a few thousand dollars.'

'Oh be quiet, you old misery,' she said. 'I'm going right out to get some champagne. We've got some orange juice in the fridge. Buck's Fizz all round.' I was dubious about this but Gordon and Rob made smacking noises with their lips. Even Jeff rubbed his hands in anticipation. He had his own reason to be happy. Overnight the dollar had finally done what his economic model said it should.

She was back in quarter of an hour clutching an ice-bucket in which nestled a bottle of champagne. I had no idea where she had got it from at that time of the morning. Glasses and orange juice were fetched from the fridge, and within a couple of minutes we were all toasting the Gypsum Company of America.

'We should have this every morning,' said Rob, staring appreciatively at the bubbles rising in his glass.

'Our lord and master would have a fit,' said Gordon.

'No chance,' said Debbie. 'I can't imagine him actually having a fit about anything. It would be more a cold stare and a quick lecture. "De Jong & Co. prides itself on its professionalism, and you, Robert, are not acting in a professional manner,"' she said in a prim Scottish accent, which somehow managed to capture the essence of a typical Hamilton put-down.

Rob laughed. 'Well you had better get rid of that,' he said, pointing to the empty magnum on Debbie's desk.

'Oh, he won't be in till lunchtime,' Debbie said.

'Oh won't I now?' said a quiet measured voice from the door of the trading room. Instantly the room was silent. Jeff turned to his sheets of computer print-outs and Rob, Gordon and Karen all melted back to their desks. It was as though the Upper Fifth had been caught misbehaving by the headmaster.

This was ridiculous. We weren't schoolchildren and Hamilton was not a headmaster.

After a long silence, I raised my glass to Hamilton. 'Welcome back. Cheers.'

Hamilton just looked at me.

Emboldened by my greeting, Debbie approached Hamilton with the bottle and a glass. 'Won't you have one?' she asked.

Hamilton's gaze turned to her. He ignored her offer. 'What are you celebrating?' he asked.

'I have just made a killing!' said Debbie, her enthusiasm undimmed.

'That's good to hear,' said Hamilton. 'What was the trade?'

Debbie laughed. 'Oh no, it's not De Jong that made the killing, it's me. I bought some shares yesterday and they are up 50 per cent today.'

Hamilton stared at Debbie for a few seconds. Then he said in a quiet, reasonable voice, showing no trace of anger, 'Just let me put down my things and let's go into a conference room.'

Debbie shrugged, put down her glass and followed him to his desk, and then out of the trading room.

'Whew,' said Rob, 'I wouldn't like to be in there.'

Ten minutes later Debbie came out. She stared at a fixed point on her desk and walked straight towards it, looking neither left nor right. Her cheeks were slightly reddened. Her mouth was clenched firmly together. There was no sign of tears, but she looked afraid that if she relaxed one muscle in her face, they would break out. She sat down, stared at her screen and began to tap bond yields furiously into her calculator.

Hamilton entered the room and walked through the silence over to his own desk. He took some papers off the pile that was his in-tray and began to read. The tension was only broken by Rob, who answered a call from a broker with an elaborate display of cheerfulness.

After half an hour or so, Hamilton came over to my desk and sat in a chair beside it. Debbie studiously ignored him, punching numbers into her calculator. Although I had worked with Hamilton for six months, I always felt nervous talking to him. It was difficult to have a casual conversation; he seemed to listen to everything I said so carefully that I was always scared of saying something foolish or banal.

He just sat there leafing through the position sheets which outlined all the trades we had done whilst he had been away.

'You were back a little earlier than we expected,' I said, to break the silence.

Hamilton smiled slightly, 'Yes, I got an earlier flight.'

'How was the trip?'

'Good. Very good. De Jong is beginning to build a bit of a name for itself in Japan. There is one insurance company, Fuji Life, that I have high hopes for. They sound as though they might give us some money to manage, and if they do, it will be big.'

'Great.' It was good news. A fund management firm like De Jong is only as good as the size of funds it manages. A big new investor could really put us on the map.

'How have you been doing here?' Hamilton asked, running his finger down the position sheets.

'Well, we had some fun with a new issue, as you know.'

'Ah, yes. How is the Sweden doing?' he asked.

'Moving up slowly but surely,' I said, trying to keep the pride out of my voice.

'Well, don't be too quick to sell it, it has got a long way further to go.'

'OK.'

'And watch out for any other new issues. After the success of the Sweden, people will be looking to buy anything as long as it is at a halfway-decent price. Now, what are these two million Gypsum of Americas I see we have bought? I have been trying to sell our position for over a year.'

I paused for a moment, disappointed and a little angry. No 'Well done'. Not even a smile. I realised I had been looking forward to Hamilton's return and the approval I felt I deserved. More fool me. In Hamilton's world, taking risks and getting it right were taken for granted.

Trying to keep the indignation out of my voice, I described Cash's excited bid for our bonds, and my decision not to sell. I then told Hamilton why I had decided to buy some more.

'Hmm,' said Hamilton. 'And where are they trading now?'

'They are still bid at the price I bought them, 82,' I said. 'But the stock is up to eleven and a quarter dollars. The bonds should follow soon.'

'Yes, Debbie told me you had bought some stock as well, for your own account.' Hamilton looked hard at me. 'Be very careful, Paul. You won't be lucky all the time. And when you do get unlucky, make sure it doesn't wipe you out.'

I could feel my face getting hot. I had made good money on the Swedish issue and it looked very much like I was going to make some more on the Gypsums. I deserved some encouragement, for God's sake! Of all people, Hamilton was the last person to criticise anyone for taking risks.

'Thank you,' I said. 'I'll remember that.'

'Good,' said Hamilton. 'Now, have you got anything interesting coming up this week?'

'Actually, yes,' I answered. 'Cash is coming in this afternoon with his sidekick, to try to sell us a new deal.'

'Not another one,' said Hamilton. 'I would have thought one would have been quite enough for one week.'

'No this is different. It's a junk bond issue. It's for the Tahiti, a new hotel in Las Vegas. It's a risky deal, since almost the whole cost of the construction of the casino has been financed with debt. But it yields 14 per cent.'

'Now, that is a lot. I hope we can live with the risk. This is where you earn your crust.'

I sincerely hoped so. Junk bonds, or 'high yield bonds' as they are sometimes more politely called, can be very profitable. They can also be very dangerous. The name 'high yield' comes from the high interest coupon that these bonds pay. The name 'junk' comes from the high risk that they represent. They are usually issued by companies burdened with high levels of debt. If everything goes well, then everyone is happy; the investors in the junk bonds get their high coupon, and the owners of the company make a fortune out of an often small initial investment. If everything does not go well, then the company is unable to earn enough cash to meet its interest bills and it goes bankrupt, leaving its junk bondholders and its owners with paper fit only for the waste-basket. The secret to investing successfully is picking those companies that will survive. This was where my experience as a credit analyst came in. Hamilton wanted to begin buying junk bonds, and he had specifically hired someone with credit skills to help him do it. I was looking forward to my first opportunity to display those skills, although I knew nothing about casinos, and was more than a little suspicious of Bloomfield Weiss's new deal.

'Well, let me know how it goes,' Hamilton said. With that, he stood up and went back to his own desk.

Debbie muttered something that sounded very much like 'Bastard!'.

'What was that?' I asked.

She looked up just for a second, her face still clenched with the effort of keeping control.

'Nothing,' she said and bent over her calculator. The anger radiated from her desk.

I looked at my watch. It was a quarter to twelve.

'Look, it's almost lunchtime. Why don't we go out and get a sandwich?' I said.

'It's too early,' said Debbie.

'Come on,' I said firmly.

Debbie sighed and threw her pen down on to her desk. 'OK, let's go.'

We ignored the usual Italian sandwich shop over the road and instead walked to Birley's in Moorgate. Clutching our absurdly expensive turkey-and-avocado sandwiches, we walked on to Finsbury Circus.

It was a gorgeous day. The sun was out and a gentle breeze ruffled the dresses of the secretaries who were making their way to the lawn in the middle of the Circus for a lunchtime's sunbathing. We found an empty patch of grass with a view over to the bowling-green. Young men in bright blue striped shirts and red braces were playing. The gentle murmur of relaxed conversation hovered over the lounging office workers scattered over the lawn, pale limbs and faces turned towards the July sun.