Memoirs of a Minyan: Inmates in the Asylum

By Todd Harrison  JUN 10, 2009 7:50 AM

The purpose of the journey is the journey itself.

 


Editor's Note: “Memoirs of a Minyan” is a first-person account that follows Minyanville founder Todd Harrison as he weaves his way through Wall Street and beyond. This e-Book will publish each Wednesday over 18 weeks.




Chapter 1: Inmates in the Asylum

It was the turn of the century and change was afoot.

As Y2K fears swept the Street and the stock market scaled the wall of worry, Wall Street was flush with newfound wealth and irrational exuberance.

It was an exciting time to be a trader as money magically meandered overhead like some sort of magic carpet ride. If you weren’t cutting a rug, you were missing out. And everyone from taxi drivers to stay-at-home moms were wearing dancing shoes.

I was already a veteran of my chosen profession, having honed my skills at Morgan Stanley (MS) for seven years before managing the derivative portfolio at a multi-billion dollar New York hedge fund.

At 30 years old, some said I achieved a level of accomplishment in a world filled with grizzly old timers. But there was plenty to do and more to make, a self-serving motivation that drove me to the next best trade.

I knew Jim Cramer and Jeff Berkowitz for many years, having covered their hedge fund while climbing the corporate ladder at Morgan Stanley. I respected them both, as people and professionals, and we established a symbiotic relationship over time.

We swapped ideas, shared insights and traded billions of dollars worth of stock, blazing separate yet similar paths. It was a period of discovery and unbeknownst to us at the time, it was the genesis of a relationship that forever changed our lives.

As 1999 drew to a close, our circles began to overlap with increased frequency. I was ready to take the next step in my career and Cramer Berkowitz was ready to transform its trading desk from an execution platform to a legitimate revenue generator.

They already had the intellectual capital in house and the performance to prove it. Our imminent marriage would lift us to the next level and establish our fund as a force to be reckoned with.

The courtship was seamless as we took the necessary steps to consummate the relationship; I would join the firm as a partner and run the entire trading operation. I asked for full autonomy on staffing decisions, commission direction and risk management systems. Each and every request was granted.

As we uncorked several bottles at Gramercy Tavern, the deal was struck with hugs and handshakes. The trading operation would be mine to mold and after ten years on the Street, I finally had an operation to put my fingerprints on. I tendered my resignation at The Galleon Group and took the first cab I could find to 40 Fulton Street.

I was hungry yet humble, excited yet nervous, enthusiastic yet measured.

The existing traders had been with Cramer Berkowitz for years, executing the vision and vibes of Jim, Jeff and research director Matt Jacobs. I was schooled a bit differently and believed the trading process could be additive and accretive to profits derived solely from the research functionality.

I assumed my position at the head of the desk and committed myself to quietly observe the people who would become my professional family for the next three years.

But as I would quickly learn, my role at Cramer Berkowitz would be far from quiet and anything but normal.

Just the way I like it.

The Purpose of the Journey is the Journey Itself

I didn’t always want to be a trader. In fact, it’s a small miracle I found my way to Wall Street and beyond.

I struggled whether to share this story as I didn’t know if anyone would be interested in my lot in life. As I weaved my way through the many mazes in my mind, I decided to put pen to paper and recount my steps.

If not for you, for me, but with a larger lens on the immediate gratification conspicuously consumptive society we lived in. Some might say I bowed to the false idolatry of money and perhaps I did. I was conditioned to believe that success was measured by a bottom line and validation could be found in a bank account.

Everything you’re about to read is true, as seen through my eyes. I share it without vice or virtue and with all due humility. Lou Manheim said in the movie Wall Street, “Man looks in the abyss, there's nothing staring back at him. At that moment, man finds his character. And that is what keeps him out of the abyss.”

I’ve stared into a few black holes during my career and emerged each time with newfound passion and incremental resolve. The ability to turn obstacles into opportunities is one of life’s best-kept secrets and the greatest wisdom is bred as a function of pain.

As with any journey, the path we take is more important than the destination we arrive at. My particular route included climbing the corporate ladder and chasing the trappings of success. Once I got to where I thought I wanted to be, I realized net worth and self-worth were entirely different dynamics.

That was distinctly different than what I was programmed to believe as a child and it facilitated a professional and spiritual rebirthing. In life, as with the markets, the big picture is made up of many smaller pictures.

To fully appreciate where I was, we must first understand how I got there.

Bagel Boy

My parents divorced when I was three years old. Looking back, their marriage was doomed from the start, a fast-tracked union facilitated by the Vietnam War during a time of extreme geopolitical uncertainty.

We moved from New Jersey to Great Neck, Long Island and lived in a small apartment overlooking a park. My brother and I shared a room and adapted to life without a father. Our mom took a job in Manhattan and her income allowed us to enjoy a solid middle-class existence.

We lived in an affluent town, though we weren’t in the wealthiest of neighborhoods. Great Neck was a place where children measured each other by the logo on their shoes and labels on their shirts. That was my first taste of money, having some, but seemingly never having enough.

When I visited friends on the other side of town, I marveled at the sprawling lawns and fancy cars. I asked my mother why we lived with such modest means, unaware of how painful it must have been for a single parent with two young boys to field such questions. Her response was always the same—“If you want more money, get a job.”

It was the single best piece of advice she ever gave me.

At the age of 13, I began working at the local bagel shop. I awoke at 5:00 AM on Saturdays to prepare for the mad rush of customers, many of whom were the families I aspired to emulate.

I never forgot the symbolism of that counter, a divide representing the chasm between the “haves” and “have nots” as money changed hands for goods and services. Little did I know that I would experience life on both sides of that cash register.

Coming of Age

My father moved to California and our interaction was limited to infrequent visits and occasional summers. I used to stare at the phone on my birthday waiting for it to ring, looking for a semblance of normalcy or an inkling of paternal acceptance. It rarely, if ever, did.

My dissatisfaction manifested in many ways. I gained weight, got into fights and lashed out at whoever got in my way. I was the child who looked for validation at the bottom of a milkshake and acted out to get attention.

My mother had the foresight to harness my aggression and guide me towards sports as a positive outlet. I excelled as an athlete and thought I finally arrived and conquered my demons. How wrong I was.

High School is a vicious place, particularly in Long Island where you’re measured by possession. My self-esteem was fragile as a function of my father’s abandonment but I continued on a productive path. I held several jobs, following the advice of my mother that if I wanted to get ahead, I had to work for it.

My grandfather Ruby was my best friend but the void left in my father’s wake was powerful. I began to communicate with him to understand why he left and how I played a role in it. I decided to find out what the man was all about and moved to Woodland Hills, California at the beginning of my junior year of high school.

My father’s energy vacillated from one day to the next. Every encounter was random—one moment we were tossing a baseball, trying to recapture lost time and the next, I tiptoed through the house because he was so angry I didn’t want him to hear me. I thought he was moody but would find out years later that something entirely more disturbing was afoot, something beyond his control.

He worked as a post-production executive and seemingly found his calling. One evening, he pulled into our driveway in a flashy red Ferrari and announced he had been promoted. I’ll never forget how much he loved that car—he washed, waxed and incessantly detailed it as if it, alone, was symbolic of his success. I would witness that stretch for status many times over when I eventually arrived on Wall Street.

I also bought a car, a red Nissan 200SX, as I was anxious to emulate him. My father co-signed the loan with the understanding that I would be responsible for the monthly payments. I worked several jobs to make ends meet. On weekends, I traveled to Simi Valley and picked weeds for $50 per day. My mother’s advice played often in my head. “If you want money—get a job.”

I missed playing sports but was willing to make the sacrifice if it meant having wheels. California was a lot different than New York and if you didn’t have a car, you were socially disadvantaged. It simply wasn’t an option.

One night, my father walked into my room and said he was fired from his job and sold the Ferrari. He told me he needed my car to go on interviews but I still had to make the payments. If I didn’t like it, he said, I could move back to Great Neck. I agreed to help, hoping to help him get back on track.

When I graduated high school in 1987, I returned to the east coast and worked as a short-order cook in Times Square. I watched the well-dressed professionals as they paid their way and rushed to work while rarely, if ever, making eye contact. As I readied for a fresh start in upstate New York, it was hard to contain my excitement.

My lone goal was to be on the other side of the cash register.

R.P.

Click here for the next chapter of Memoirs, "Animal House"

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No positions in stocks mentioned.

Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at todd@minyanville.com.

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