Rigour and the silver fox

submitted by Shaq


It was the early spring of 1994 and I was a 23-year-old junior metals trader working for J Aron & Co, the commodities arm of “The Vampire Squid.”  That was Goldman Sachs FICC division at Peterborough court in London. It was just like every other morning back then where I waited to pounce on the incoming 10.30am (5.30am NY) call on GDC’s (x2010) line to talk to the head of the business James “the silver fox” Riley to give him the days run down. It would be a morning conversation I would never forget in a hurry as it opened my eyes to the passion, intensity and ultimately the accountability of Money and how traders hungered for it at every level especially at the top.

This particular Titan of commodities trading was a short, blue eyed, grey haired 50-year-old American of Irish descent that worked in Manhattan but lived with his family in Long Island. Through my early ears he mentored me, moulded my DNA and business acumen to become part of a distinct group of traders that were respected, feared, and despised by its peers on Wall Street. Even within the walls of GS the commodities division was regarded as the untamed and under regulated wild west of markets.

My role at the time apart from fetching everyone’s breakfasts, lunches, teas, coffees, and any other chores the senior traders wanted me to perform was to run the LME Lead book the smallest franchise in the business but with a firm client base. Over the course of the three previous months, due to cold weathe,r the price had risen 40% and the book had on paper made its budget in record time. This however was just on paper and not crystallised. The previous day was at the time my largest daily trading loss of $750,000 and a chunk of my YTD pnl. Having had a conversation with senior traders on the desk the day before I thought that my number within the reporting lines of all the other businesses would be overseen by Jimmy and not noticed. How wrong I was.

This particular morning I had my diatribe ready for Jimmy with his systematic questions that he asked for in a precise order every day about markets, prices, flows client activity etc.  This concise format sat very comfortable with me as it coincided with my mild OCD.  I would later learn to harness the power of it from the Silver Foxes sith apprentice, known as “CJC” who had completed the highest level of Jedi training.

The Silver Fox then asked about my previous days PnL, and how I lost $750,000.  Without a chance to reply, actually, he went into a fierce offensive attack about the value of the franchise, how I was a mere custodian of it, and how my role was to make sure I captured the value he had worked and fought so hard to build.

Back then GS was a private partnership and not the huge publicly listed firm it is today.  Every dollar made belonged to the partnership, as the Silver Fox often pointed out to me. His words that particular morning resonated when he told me that I had lost the tuition fees for his four children’s education.  He was holding me accountable for it and his expectations were that I would make back the losses.

In hindsight this was just a ruse to make me more diligent and RIGOROUS in my thought process on the application of capital. This lesson and the nature of our business back then, may have seemed unfair, but it has never left me.  To this day I apply the trading ethos and rigour this man taught me.