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Memoirs of a Minyan: Battle Lines Are Drawn

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The purpose of the journey is the journey itself.

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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. Click here to read previous Memoirs chapters.


Chapter 8: Battle Lines Are Drawn

My grandfather taught me to keep my right hand up. As a former Golden Gloves boxer, that was his way of telling me to protect myself.

After Jim's rant, I never walked through those hallowed halls the same way again. I knew I was only as good as my last trade but at Cramer Berkowitz, that expression was taken to an entirely new level.

It wasn't enough to be right. You had to be right all the time, every day.

It was March 2000 and the NASDAQ rallied 35% in a little over a month. As Focus Enhancements faded into the rear-view mirror, Jeff and Matt scoured corporate America as Jim and I, sitting five feet apart and facing each other, moved mountains and molehills from dawn till dusk.

While we shared a mission, our styles were diametrically different. Jim warmed to stocks once they rallied and cooled after they fell. As a function of my training at Morgan Stanley (MS), I liked to "fade" the market, nibbling on dips and selling blips. It was a high stakes game of chicken and somebody was bound to blink.

I remember my moment of clarity as if it happened yesterday. Tech stocks were ramping 10, 30, 50 points in a single day and I awoke in the middle of the night with a disturbing epiphany. It wasn't the first time I had the thought but it was different that time, a clarity that seemed obvious, a crystallization that would define my career.

The technology bubble was about to burst.

One of the toughest disciplines when trading is to sell a stock that is making money. Multiply that dynamic by a large portfolio, add a slew of zeros and factor in the emotional context of our office and you'll get a sense of the task at hand.

I won't say I was the lone bear-Jeff also sensed wreckage on the horizon-but the timing, coupled with the intensely competitive landscape, made for prickly friction with a razor thin margin of error. I believe Jim summed it up in his first book, Confessions of a Street Addict, when he wrote:

"When April came in, and the NASDAQ was still in the 4500 area, Todd suggested that we were on the verge of a collapse of titanic proportions, that the whole NASDAQ bubble was about to burst and would shortly be at 1,500."

Now, you've got to understand Jim. He has a genuinely kind heart but could make your life miserable if you're on the wrong side of his mind.

Jeff used to say that if Jim hit someone with a car and you politely informed him of the accident, he would drive the victim to the hospital and buy the family dinner. If you told Jim he screwed up, he would raise his arms and scream, "Shut up or I'll hit you too!"

Such was life at Cramer Berkowitz in the weeks before what proved to be the largest car crash in financial history.

It wasn't enough that I had a strong sense the wheels were going to fall off the financial wagon, I had to explain why the timing was right and do it with tact. Heaven help me if we missed further upside or worse, got squeezed on the short side.

The tension was thick and as the new kid on the block, I knew where loyalties lied.

Pop Goes the Weasel

April 2000 arrived with a bang and the NASDAQ dropped 20% in a few short sessions. What's more, as we actively traded the volatility, we caught the counter-trend rally back to NASDAQ 4500 before again riding the short side to fresh market lows.
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