Reading the recent New York Magazine piece on Steve Cohen, the billionaire hedge-fund manager of SAC Capital, two themes emerge: he hates fame and he likes to be feared.
That is not uncommon on Wall Street, where it’s better to be hated and rich than loved and famous.
That is the hierarchy in the finance culture: the more important you are, the less you need to be liked, and the less you need to be seen.
At the very top of the Wall Street pyramid are the billionaire hedge-fund managers like Steve Cohen, masters of the markets who are famous for not wanting fame. Their ability and desire to stay under the radar of the public is a signal of how really important they are.
Garden-variety fame? That is a nasty symptom of being very wealthy that unfairly puts you in the same category as reality TV stars. Those who work on Wall Street are not that, certainly not in their minds.
That sort of fame is like a skin rash that needs to be treated. And as with all things Wall Street, that treatment comes by throwing money at the problem.
So Steve Cohen has attempted to buy up the rights to photographs of himself, limiting their availability. That isn’t a crazy personal tick.
Many on Wall Street have a similar policy. Especially hedge-fund managers. They flee from cameras, flee from being interviewed, and certainly flee from ever being on Page Six. Unflattering news, unflattering photos, are either bought with money, or buried via legal action.
The distaste of fame often morphs into outright secrecy, especially amongst the hedge-fund set.
If fame is a sign of weakness then secrecy is a sign of success. True masters of the markets don’t need anyone else’s help. They can divine the secrets behind the frenzy of blips on the screen, finding the hidden order in randomness, and turning that into gold. If you think you have that secret it’s dumb to tell others about it for free. Much better to charge huge fees to share in the benefits of your special knowledge.
People on TV giving investment advice? Either they are fools who don’t know anything and pretend to know it all, or they're fools who know something and are giving it away for free. Either way, fools.
If you are protecting secrets it also helps to have others fear you. In New York Magazine, he was described thusly:
On the trading floor Cohen was a voracious, unsentimental monster, working his will, conquering all he saw, and verbally thrashing any employee who made a misstep.”
Steve Cohen’s alleged aggressive work behavior is standard on Wall Street. Traders often love to bully other traders. It is almost considered a perk of success. I have so much money; I know the secrets of the universe. I don’t need to bother with things like being polite.
It also comes from being beaten up so often. Even the best trader loses about 45% of the time, beaten by the markets; random numbers that have no empathy. Taking that beating daily, weekly, monthly, wears on you. If you can’t beat the markets, beat the person closest to you.
I know I certainly did during my Wall Street years, berating anyone who crossed my path at the wrong time. After being wrong, I needed to show somebody I could be right. Reset the ego.
Masters of the markets may not want fame, but some certainly want the trappings it brings: the best tables at the best restaurants, access beyond the velvet ropes, and membership to the most exclusive clubs. So they get those things by simply buying them. Everything has a cost, and Wall Street loves to prove that. It confirms their worldview: money is the most important thing.
One of my first business dinners on Wall Street was with a super-wealthy client, a man with hundreds of millions. He was at the tail-end of a long successful career. He insisted on dinner that evening at the then-new Nobu, the hottest and hardest restaurant to get into. When the salesmen explained to him it would be impossible, he laughed, “Everything is possible if you just know how much to pay.”
By the restaurant’s entrance were the usual signs of an invasion of the famous, an array of idling black limos and bulky SUVs, all manned by beefy, idle Russian drivers.
A cluster of plebeians, waiting hours for any table, snaked out the door.
The client split the waiting crowd, went to the maître d, handed him a wad of cash, and got us the best table.
Our table was surrounded by Manhattan’s famous. We were the nobodies crashing the party. It was important to him to remind us, and the waiter, that he was wrongly viewed as a nobody. He was a somebody. A somebody who knew better than to seek fame. “See them," pointing to the various movie stars around us, "they have to sign grubby scraps of papers from people who probably have tuberculosis.”
He then went on to suggest we order the entire menu. Jokingly. I think.
We didn’t, but it was something he was proud to have done before. Look at me – well, don't look at me too much, but recognize me and my money.
Eventually, for every Wall Street trader, for every hedge-fund manager, there will come a time when it is over. A run of luck will come to an end. The secret that made them feel special will be discovered. Or the regulators will find them, breathing down their necks, challenging the secrets as being too secret, or the wrong type of secrets.
The markets will win, they always do, and they are not magnanimous in victory.
Then the egos will be bruised, egos built up over many years of being lauded for being able to beat the markets. Egos that haven’t needed fame or love to nurture.
At that point the money is there to offer solace. After a life of secrecy, a life of fear, they can rest with their money.
They can buy sports teams, or collect modern art, or become a philanthropist. They can finally buy public validation.
Go on TV? Nope, that's still far too louche.
View all comments >
comments (22)
Sign in or create your Guardian account to join the discussion.
This discussion is closed for comments.
We’re doing some maintenance right now. You can still read comments, but please come back later to add your own.
Commenting has been disabled for this account (why?)
Definitely the former, and you can add to the list people giving investment advice in newspapers and online, and investment companies 'recommending' funds. If it's free advice it will only be good advice by accident.
It is NEVER free. But sometimes it's not you paying for it.
So there are some shitbags on Wall St you say?
..man these guys sound like some ragin pous oozing assholes..they can keep thier hording sociopathic world...i got love baby and peace...cant buy that
They all studied the Vatican Bank and how it operates. They invented none of this.
exactly No one really important is in the public eye,for maybe more than fleeting second on almost accidental occasions.
Well put. Usually, on Wall St. and the equities markets, for you to make money, someone else has to loose it first.
Just think how much better off the world would be if these guys put their talents to use actually aiding or improving society, instead of just enriching themselves, and a few other well-connected or already well- off people.
A great article describing the types that go to Wallstreet to earn a fortune not really doing anything but changing money around.
This "money is the most important thing" is also a symptom of living in NYC. Money is important everywhere, but somehow in NYC, it is the number 1, 2 and 3 most important thing. These assholes are treated like rock stars.
I had a female friend who was extremely good looking move to NYC. Naturally, she being young, beautiful and single, she ran into these wall street types.
After the dot com bubble burst, she shared with me what they would say about all the people who lost their fortunes in the stock market.
"The dummies put their money in. And we take it out."
The one thing the article is missing is the sight of seeing a balding 5'5 40 something stock broker with the 5'10 20 something fashion model. The only reason these 2 are together you ask?
Us dummies putting our money in. Thinking the game is anything but fixed.
After reading these articles I always feel like the proverbial moth to flame. There's obviously nothing I can do about the behavior of these fairly predictable, one dimensional alpha males so why do I bother reading about them ? I guess it's a fascination with trying to figure out why they're so miserable and driven to take everyone else down with them.
It's not just the markets. Checks and balances, trickle down, America itself doesn't work.
Beaten 45% of the time? Fucking monkey with a coin could equal that.
If your money management is sound and your edge has a positive expectancy, with a favorable R:R, then 55% winning can prove to be a very profitable overall trading strategy.
In a way, they are the most realistic when it comes to dealing with the system in the US:
Everything and everybody has their price. Ruthless competitors rule.
That is, sadly, the way it really is. So, perhaps instead of criticizing them and trying to fight the system in an unwinnable fight, perhaps we should admire them for being such good players in the corrupt corporate capitalist oligarchy that the US has become.
Reality, baby, reality. ;)
I could never admire greed.
Then, you are a bad American. :)
The most "successful" investment managers are secretive because they are doing something illegal and don't want to attract the attention of authorities. Like Madoff and Cohen. They crave attention and recognition just like anyone else. Hence seeking it from strangers when going big at a restaurant. Or from peers at an art auction. Just not from regulators.
"they have to sign grubby scraps of papers from people who probably have tuberculosis.”
I don't think "money" necessarily creates this kind of bloated egotism, but I might be persuaded this kind of ego is a pathology which gives psychological purchase for some ultra-rich people to have arrived where they did.
Greed is akin to insanity,
and "Sleeping mind (and soul) produces monsters"
http://en.wikipedia.org/wiki/The_Sleep_of_Reason_Produces_Monsters
Wall Street - and most other stock exchanges - run on high frequency trading and insider dealing. The idea that they somehow represent the fulcrum of a free market economy is hogwash!
seems to me the whole world,s a cesspit apart from the odd one that,s gone awol
Hate to say it but underneath the glitz, bling, hedonism, and hype but the rich are the most boring people on Earth. This after 3 years with the Gstaad et al jet set. Its always the same old miserable pretentions. If they has an iota of personality for every dollar they have they'd almost be interesting.