submitted by Tony Greer
This story took place while I was at a small research boutique on Wall Street. Delta Airlines had been on an incredible run and just reported earnings. Our airline analyst was a leading bull in the sector. He opportunistically used the Delta report to raise his price target on Delta, again. This time from a price it had yet to trade, to a higher price it had yet to trade, which was always amusing to me.
On the morning desk call, Mr. Airline Analyst explained his price target raise on Delta’s “incredible” earnings report and PRASM data. The stock was gapping higher in the pre-market. We were short-handed on the trading desk and trying to absorb the call.
Clients were asking for looks while the S&P was opening lower in a continuation of selling from the day before. I got tired of listening to the story about brilliant management execution and the potential for margin expansion so I barged into the call, “Hey Airline Analyst, hey great call so far, what do you think about making sales with this gap open higher while they’re selling stocks around the world, do you think there’s a chance we see a pullback in Delta first?”
Then he said something I had never heard anyone say in the markets. “No, I don’t think it’s a sale here. If you missed the earlier portion of the call – I raised my price target. I actually think the stock will go up several days in a row.”
The hair on the back of my neck stood up, “Your call, is that the stock should go up several days IN A ROW?!?!?” To me that demonstrated a gross misunderstanding markets. With Delta gapping higher, and the rest of the equity world trading lower, every PM on the PLANET was going to sell into the new high in Delta.
First, I told my clients of slow and fast money variety – “Here’s the scoop in Delta – it’s gapping up on earnings yesterday, our perma-bull Airline Analyst raised his Price Target for the 3rd time this year to yet another price it has yet to trade, he thinks it’s going to go up *air quotes* ‘several days in a row,’ and I think that’s insane. The S&P is getting hit, and I’d sell Delta all day long. Bye.” *click* Over, and over again.
THEN, I walked over to the sales desk and said – “You guys see what’s going on in the rest of the world, right? The DAX is off 2%, S&P futures are down 1%, Treasuries are bid for no good reason, and this maniac thinks the stock is going up ‘several days in a row.’ That’s completely f*cking insane.” I was calm, but extremely intense.
They looked at me like Randy “the Macho Man” Savage just entered the trading room and started giving financial advice. A sales desk of a dozen professionals made eye contact with me, but had absolutely no reaction to my comment about Delta Airlines. Nothing. They turned away, ducking further into their cubicles.
I had an order to sell Delta for a mutual fund. I had an order to sell delta short for a hedge fund, and my day was looking up. The bell rang, Delta gapped up $1 on the opening, I got the short and the majority of my long sale off, and in 30 minutes time, Delta was testing unchanged. I completed my sell order, and started calling clients looking for more orders while the entire tape went red.
Then a direct light rang. I was feeling confident with a few bucks in the till by 10AM, and as I mentioned, we were short-handed on the desk. I didn’t know whose client it was but there was nobody else available, so I picked up the line, “Hi it’s Tony, how can I help?”
“WHAT THE F*CK IS GOING ON IN DELTA AIRLINES!?!?!?!?!”
Me: Ha, well we raised our price target again after earnings last night, the world sold into the gap higher opening, and we’ve been two sided actually.
“I BOUGHT A MILLION SHARES OF DELTA YESTERDAY ON YOUR F*CKING CALL!?!?!?!?!! THIS THING IS FCKNG COLLAPSING.”
Me, sensing he’s an empowered 20-something execution guy that doesn’t know anything:
I’m sorry we missed you. It was a little hectic here. What do you wanna do in Delta?
(I’m twisting horns, lightly.)
“DELTA IS NOW DOWN 2%. WHAT THE F*CK IS GOING ON!??!?!”
Me: Sir, you can see the rest of the world has been selling stocks since 2AM last night when London opened. Delta gapped higher on earnings and probably our price target raise, and the entire world came after the thing, I mean… is there something I can…
“WHO THE F*CK IS THIS@??!?”
Me: This is Tony Greer. Who’s this?
“THIS IS (MR ASSHOLE DESK TRADER) GET ME YOUR F*CKING MANAGER AND DON’T EVER PICK UP THIS F*CKING LINE AGAIN, DO YOU HEAR ME?!?”
Me: HAhahahahah, yeah yeah… let me go get Joe. I’ll be back. *Click* JERKOFF.
To Myself: get me the HELL out of this god forsaken shop.