The Pained Trader: Heart of the matter

Pablo, the husky puppy, digs holes in the garden the way I cultivate unhappiness: it just comes naturally to him. He follows his instincts to churn up the earth like I mine the City for thick seams of despondency.

  • By The Pained Trader
  • 06 Sep 2018
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Since the sun-baked ground has been softened by autumnal rains of late, Pablo’s raking paws have found less resistance and taken to displacing countless wheelbarrows of soil and has given the impression that I employ a sapper fearing imminent aerial bombardment to gouge trenches in my lawn, rather than a gardener.

His frenzied excavations have failed to recover a priceless Viking burial hoard or the fossilised remains of a dinosaur, Salestradersaurus Ex, but they have brought forth the following into the light of day: the tiny skeleton of Chloe the gerbil who had a heart attack on the mouse-wheel and was buried in a cardboard shoebox, circa 2009; the bones of Richmond the rabbit who, like a lagomorphic grassy knoll, drowned in mysterious circumstances in my sauna barrel circa 2013; a bone which might have been human; an old pound coin, now worthless, just like the following exhibit; my career, which was interred a long time ago and had archaeologists stumped trying to recognise and date the badly-degraded component parts; finally, my heart, which was laid to rest only recently, still bearing the wounds responsible for its necrosis. Its hope nodes were still twitching. I bashed it with a shovel and reburied the whole lot without ceremony.

I told the dog if he digs up my past, which was stowed six feet under in the dead of night, then it shall be his grave, too. There are two family pets in that cemetery already and plenty room for another. Infra dig, Pablo.

I realised as I was typing that last paragraph that were you, Gentle Reader, to have nothing better to do with your time than apply a word filter to this weekly passegiata round the ruins of my mind, then references to my heart would be disproportionately frequent and rarely employed in the literal sense. And, in the sterile, dog-eat-dog world of the City, constant resort to this metaphorical repository of emotions is frankly incongruous. It’s not the stuff that finance is made on.

When I came into this business three decades back, I was told by the old-timer who took me under his wing and doled out folksy, homespun wisdom, mostly through baseball metaphors, that this game was all about numbers. (To remind you: in my interview at Salomon Brothers I was asked to multiply 2.2 by 1.1. I answered, with all the sweet confidence of youth: “About 3.”) To all intents and purposes, I am practically innumerate. My analytical qualities are as oxymoronic as ‘Happy Christmas’ or ‘harmless fantasy’. Every decision I have taken in the past 30 years has been informed not by the application of shrewd logic and precise calculation but rather by the ungovernable power of my emotions.

A trader is meant to be a dispassionate arbiter of risk, stoking a fire in his belly while cooling his head in the fridge. Ideally, he assesses every trade on its individual merits and, irrespective of the outcome, approaches the next trade with a similarly detached and neutral mindset. He discards all previous trades to the past. He does not dwell on them. He does not allow irrational feelings of bitterness, pride, obstinacy and superstition to dictate his buys and sells.  

I was never that trader.

I was a trader who felt a sickening lurch in his stomach as soon as whatever position I had just put on, went out of the money. Invariably, this was one minute after I entered the bargain into my trading system. I would always double up, hang on too long, permit the rotting loss on that short to dissuade me from this no-brainer buy over here. I always lost money with a hangover and since my hangovers were a) legion and b) cursed with a metaphysical dimension mostly characterised by self-loathing this became a severe handicap to prudent risk management.

After paying what was, for more than 12 months, the all-time high for the Hang Seng futures contract, I came to realise my gut feel for stocks and markets was an unreliable prognosticator for their short-term direction. I discovered I had a habit of being long markets which I liked to visit (Malaysia or Indonesia) or where I fancied the birds (Thailand, the Philippines) and staying short those I didn’t (Taiwan, South Korea). A casual glance at my trading patterns indicated a predisposition to buy things when I felt happy (not often, now that I think of it, but occasionally when just back from lunch, pissed, at 2.30pm) and sell things when I was sad, (dyspeptic mornings or any time when I had recently been mauled by The Doberman of Love – a semi-permanent arrangement).

This was no way to run a business but, in my defence, it was not me running it; it was the violent uncontrollable urges welling up unbidden from within. I did not have ice or ichor coursing through my veins but molten lava. I was a rotten trader. I can say that now. Everyone said it then.

What the old-timer failed to point out when I was just starting off was that this business is not just numbers. It’s people, too. That glaring omission may indicate why he has been running an enormous hedge fund for the past 20 years and has amassed an equally enormous fortune in the process while I’m stuffing chickens and polishing turds at Salvation Bank.

The presence of raw emotions bubbling so close to the surface made the composed treatment of numbers impossible and it hasn’t always helped with people either. I have devoted an inordinate amount of time to compiling and maintaining my Top Ten Tossers in the City. When I have taken a dislike to the person for whom I ostensibly work, I will expend considerable energy undermining that person and sustain a lifetime grudge of staggering intensity. Had I diverted some of that negativity into more constructive practices, who knows what I might have made of this so-called career? Being born with no flesh makes for a sensitive type who cannot withstand rejection or indifference from clients. This is an unhelpful trait when stockbroking, or my variant of it, meets with little else.

Stockbroking favours those with a skin of Kevlar not gossamer and shuns the self-conscious, the paranoid and the delicate of temperament like a leper’s bell. The ability to subdue these impulses and keep hypersensitivity in abeyance tends to separate the winners from the also-rans in finance. That’s my theory, anyway. Would that I had a choice.

To feel things so deeply made the big punts that came off orgasmic at the time and all the more memorable for their rarity. To feel things deeply makes the friendships one strikes up with colleagues or occasionally those bastards on the other side of the fence more intense and more sincere. And where, even in the City, there was romance, to feel things deeply made the contractions of the heart more lacerating and the distance between our lips shrink to nothing.

Heart is no metaphor. You need one in the City.

  • By The Pained Trader
  • 06 Sep 2018

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Citi 284,259.14 1099 8.15%
2 JPMorgan 274,379.00 1197 7.86%
3 Bank of America Merrill Lynch 256,326.55 870 7.34%
4 Barclays 213,412.52 794 6.12%
5 Goldman Sachs 189,725.03 618 5.44%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 BNP Paribas 37,223.03 158 6.64%
2 JPMorgan 34,910.99 67 6.23%
3 SG Corporate & Investment Banking 30,353.68 113 5.41%
4 UniCredit 29,801.83 136 5.31%
5 Credit Agricole CIB 27,998.53 136 4.99%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 JPMorgan 11,324.10 47 8.92%
2 Goldman Sachs 10,371.50 49 8.17%
3 Citi 9,134.57 51 7.19%
4 UBS 6,517.25 25 5.13%
5 Morgan Stanley 6,459.47 42 5.09%