The index of self destru.., p.18
The Index of Self-Destructive Acts, page 18
“Your profile really captured Frank,” Justin said. This was true. He didn’t add that Blakeman had obviously written those parts that had captured Frank the best.
“I should have spoken to you for it,” Waxworth said. “You seem to know the family better than anyone.”
Justin appreciated the sentiment, but he was glad he hadn’t been interviewed. He’d been asked about Frank more times since the Ballpark Incident than in his whole life before then, and he was ready to be done with the question. It wasn’t so bad when it came from someone like Lucy, who seemed genuinely curious to hear his thoughts, but most people raised the subject as a kind of test. Either Justin was meant to prove his loyalty by defending Frank or he was meant to prove his integrity by disavowing him. His honest answer—a man he cared about had said something hateful, which had hurt Justin to hear but hadn’t made him stop caring about that man—was bound to disappoint in either case.
“You did just fine without me.”
“It would still be nice to talk,” Waxworth pressed on. “Maybe I could write something about you. I mean, you’ve made some pretty good predictions yourself, and unlike me you had skin on the line.”
Justin was used to compliments like this, and he didn’t take them too seriously. He’d been written up a few times in the financial press over the years, and the pieces always mentioned the fact that he’d left investment banking just before 9/11, which was seen as remarkably canny, since hedge funds like Eisen’s had recovered more quickly than the banks after the attacks. No one suggested that he’d seen it coming, but people couldn’t help giving him credit for the move anyway. They ascribed to him some talent for the bold choice. A few articles had made it sound as if he would otherwise have died that day, though everyone from the Q&M offices had survived. Seven years later, he’d unwound most of his own fund just a few months before the financial collapse. His charitable work had taken him off the financial pages, into the general press, where he was treated as a sort of preternatural genius, his story turned into a morality play. A self-made millionaire had raised himself from poverty and been rewarded for his decision to get up and walk away from the table. This all made good copy, particularly since it had coincided with Obama’s campaign, for which Justin had hosted a fund-raiser. He was a minor avatar of the post-racial moment. Members of both parties had approached him about running for mayor when Bloomberg’s term ran out, though he’d never publicly stated a political opinion in his life.
“I got pretty lucky, to be honest.”
“That’s probably true,” Waxworth acknowledged. “But I’ve looked at some of the bets you made at DRE, and you really seemed to have some kind of edge. Of course that stuff’s usually proprietary, but since you’ve quit the game, you’re in an unusual position to give people an inside look at how you did it. I’d love to know.”
If his tone had been different, Justin might have taken this for a threat. At the very least, he would have read into it some kind of innuendo. But it was spoken so guilelessly. Waxworth was genuinely curious to know how Justin had done it. Did he have no inkling of Eisen’s reputation? Was it possible to be at once so smart and so naive?
“I’m not sure I’m ready to tell all,” Justin said. “But if I change my mind I’ll come straight to you.”
Justin had first met Dan Eisen at one of those fund-raising galas where MDs buy tables and bring all their underlings, where everyone drinks too much and half the people don’t know the name of the charity they’re there to support. Late in the evening, he found himself in line at the bar with an uncomfortably overweight middle-aged man whose ill-fitting tux and skulking manner looked entirely out of place. The man asked politely what had brought Justin there. Kit had received some kind of award during dinner, and Justin somewhat drunkenly explained that he worked at her bank and also happened to be a close family friend.
“I’ve known her basically all my life,” he said.
The man seemed interested by this, and he continued asking questions until they arrived at the front of the line, where he ordered himself a ginger ale. Before they parted ways, Justin handed over a brand new business card—he was in his fourth year at Q&M, and he’d just been promoted to associate—and raised his vodka tonic in salute.
Back at their table, Justin’s one close buddy from work, another recently minted associate named Joe Ambrose, asked what he’d been discussing with Dan Eisen, which was how Justin learned that he’d been bragging about his insider status to one of the most successful hedge fund managers in the world. For the better part of a decade, Eisen had made more money than anyone else on the Street while remaining almost unknown outside the small circle that followed such things very closely. He didn’t invest in fashionable restaurants or indie films. He didn’t buy eight-figure Brâncuşis at auction. He didn’t build Sagaponack McMansions that blighted the old money’s views. His total lack of interest in the things that wealth could buy made him rather dull to the media outlets that dedicated themselves alternately to the celebration and condemnation of conspicuous consumption. He had no interest in playing guru, never went on TV to make bold predictions about where the market was headed, didn’t put his name on ghostwritten books of investment advice. His quarterly reports were almost comically terse. If you want a bedtime story, he’d once begun a three-sentence investor letter, read Dr. Seuss.
Justin learned all this online in the days after their brief encounter. He also learned that Eisen didn’t drink, which meant that Justin couldn’t even reassure himself that his late-night boasting would be easily forgotten. In his embarrassment, he tried to forget the whole thing, so he was doubly surprised when he got an email a week later, inviting him to visit the Group DRE offices.
Eisen was like no one else Justin had ever met, a near-obese fifty-three-year-old City College grad from Bushwick, an orthodox Jew who walked around the office barefoot, in white undershirts and pressed jeans. Over lunch he asked Justin how much he knew about DRE.
“I just know you make a lot of money,” Justin answered honestly.
Eisen shrugged appreciatively.
“I’m a humble stock picker. There aren’t a lot of us around anymore.”
Every fund was trying to get returns that were uncorrelated with market performance, but most of them did it with nontraditional investments: real estate, timber, currency arbitrage. Eisen made his money in old-fashioned equities. There was a widespread belief that the market had gotten too efficient to be beat consistently, but Eisen was disproving that.
“The market is only rational in the aggregate,” he said. “On the individual level, people do stupid shit every day.”
Investors overreacted to bad news. They made decisions with their emotions. A string of setbacks in some sector caused companies with strong fundamentals to be punished along with their peers. In the most extreme cases, assets could exceed market capitalization, which meant a company could be bought for less than its component parts were worth. This was transparently irrational. It amounted to accepting a ten-dollar bill in exchange for fifteen singles. Of course appearance couldn’t dictate reality in the long run. Facts did win out in the end—“that’s all the efficient-market hypothesis really means”—but in the meantime, the market was bound to be misunderstood by those who got stuck on the surface. There was money to be made by spotting these misunderstandings before the market corrected them. If you had enough capital to throw around, you could actually cause the correction. In which case, you were the one making the market efficient.
The philosophy behind this strategy obviously appealed to Eisen, who prided himself on being too rough around the edges for the old boys’ network, and he expected it would appeal to Justin, too.
“I don’t give a shit what Katherine Doyle thinks,” he said pointedly after offering Justin a job. “If you’re good, you’re going to get paid. If you’re not, you’re going to get fired.”
The base salary Eisen offered him was less than Justin was getting at Q&M, but a good DRE bonus was more than he’d make in a decade as an investment banker. If he did well enough, Eisen would seed a fund for him in five years, at which point seven- or eight-figure compensation might turn into nine. If he didn’t do well, he would be out of a job, but this seemed a risk worth taking.
Eisen had found him at the right time: Justin was ready for a change. Kit had made clear when she gave him his first job out of college that she could only get him “into the pool,” after which he would sink or swim on his own. The other junior analysts figured out pretty quickly that Justin had a prior relationship with the boss, but no one held it against him because he worked so hard. Many of them were living in the city for the first time, overwhelmed by all the opportunities. Justin was single—he intended to stay that way—and he had a handful of good friends he sometimes saw on the weekends. He didn’t need to construct a social life. He simply put in more hours than the others. Everyone had known that Justin would get an offer at the end of their two-year program, and no one suggested that Kit would have to make it happen.
If anything, the ease with which he flourished at Q&M was worrying. He had great confidence in his abilities, but he was forced to admit that his competition wasn’t as fierce as it might have been. After growing up in awe of the Doyles, he was shocked to realize that Q&M was in the second tier of investment banks. With his magna degree in economics from Georgetown, Justin could have gotten a first-tier offer if he’d known enough to seek one out, something he realized only after the fact. He was grateful for Kit’s help, but he was starting to think that it had limited him in a way. He could never become as rich as Kit Doyle by working for her. Even if she one day passed the reins to him, as she sometimes hinted she would, the age of the family-run firm was over.
“We may be able to do a little better,” she said vaguely when he told her he’d gotten an offer. “I just gave you a bump with this move to associate, and you know I can’t play favorites.”
“It’s not about the money,” Justin told her. “I need to find out if I can make it on my own.”
This was meant to flatter her. For all her talk about sinking or swimming, she liked the fact that people thought of Justin as her protégé, that his success was a credit to her. Even if he went on to do great things somewhere else, it would always be known that she’d given him his start.
“Who have you been talking to?” she asked, clearly expecting to hear the name of another bank.
Her expression changed when he mentioned Eisen. It was common enough for young analysts to want hedge fund jobs, which were the quickest route to making extravagant amounts of money, but she obviously expected Justin to have other priorities.
“You’ve got to be careful with guys like that,” she said. “They’ve got sharp elbows. I don’t know if you’re ready to play the game that rough.”
As hard as it was to believe now, Justin hadn’t known Eisen’s reputation at the time. There might have been some whispers, particularly up at Kit’s level, but they hadn’t made their way into general circulation. Kit’s reference to “sharp elbows” struck Justin as simple snobbery, perhaps with a hint of genteel anti-Semitism. She was making the very mistake that Eisen had warned him about—judging the unpolished surface instead of the truth at the core. He didn’t tell her this, and she made no more suggestions of the sort when he announced a week later that he was accepting Eisen’s offer, but he’d always sensed that he’d disappointed her. The fact that she never said as much—she never mentioned Eisen again until that night at the party—only confirmed the depth of that disappointment.
At the end of his first year at DRE, Justin received a big enough bonus to justify his decision, but he accepted it more in the way of encouragement than reward. The job was a grind, and his work was solid but unspectacular. He found the market pretty efficient after all. You had to do a lot of research, go down a lot of blind alleys, to identify where it was getting something wrong, and the corrections usually weren’t that big. If you picked your spots and minimized your losses along the way, you could do a point or two better than an index, which was enough at least to keep the job. He didn’t expect the same large bonus his second year, but he was astonished when Eisen told him that he wouldn’t be getting one at all.
“I thought I was doing pretty well,” he said.
“You get a salary for doing pretty well,” Eisen answered. “You get a bonus for doing better than pretty well.”
“I’m working my ass off.”
Even as Justin said this, he knew it was a mistake. Eisen didn’t care about effort or process or intentions. He cared about results.
“Maybe you need some help.”
For a moment Justin thought he was being offered an assistant.
“I would appreciate that.”
“Not from me,” Eisen clarified with a disgusted laugh. “I thought you were a popular guy. Don’t you have some friends who could help you out?”
Dan Eisen was perhaps the most direct man Justin had ever met, and now he was talking in riddles.
“What do you mean?” Justin asked.
“I thought you had lots of friends. I thought Kit Doyle was your fucking den mother or something. Maybe I was wrong about that. If you don’t have friends, you might think about finding some. They might give you the help you need.”
Eisen explained what he meant by a “friend,” how a real one differed from some random schmuck with a tip. People tried to give you tips almost constantly in this business. Most of the time the difficulty was getting out of their way. A few made surprisingly blunt offers—they had something valuable, and they wanted to know what you would give them for it—but many didn’t have any clear idea of what they were doing or what they wanted in return. Maybe it was enough to feel important or to be in good with someone important. Some just started talking after a few drinks, seemingly without premeditation. Their eagerness to violate whatever minor fiduciary trust had been placed in them seemed almost pathological. They couldn’t stand to let secrets go to waste. Eisen told him to be wary of such people, who were apt to be as sloppy with everyone else as they were with you. What you wanted in this game was a real friend, someone who had as much to lose as you did, and so could be trusted.
Justin nodded uneasily at the end of this speech, and he waited for Eisen to dismiss him.
“Do you think you’re too good for the work we do here?” Eisen asked abruptly.
“Of course not,” Justin said.
“Are you afraid that Kit Doyle wouldn’t approve? Is that the problem?”
This time Justin didn’t answer, so Eisen went on: “Let me tell you something. It’s very easy to stay on the high road when you were born up there. But that road was built by people who got plenty dirty in the process. They didn’t have a name for what we do when Kit Doyle’s father and grandfather were doing it. They just called it ‘business.’ It happened in the locker room at some racquet club where Jews and blacks need not apply. It’s only when people like you and me showed up that they all decided the game had rules. ‘Fair play’ is just another word for pulling the ladder up behind you. Meanwhile all these so-called clean shops give their favored clients first crack at the IPO they’re putting together, or they pump up stocks they know are pieces of shit because they need to get them off their books, and they have the balls to question the way I run things here? Fuck them. Are you with me, Price?”
“I’m with you.”
“All right. Go out there and get to work.”
Justin stood up and started walking to the door. After he’d taken a few steps, Eisen called him back.
“You want to keep your hands clean in this business, buy a fucking pair of gloves. You want to stay pure, join a monastery. You understand?”
“I understand,” Justin told him, and he walked out the door.
The conversation had saddened him, though perhaps not for the right reasons. He’d been sold a vision of the world, one in which those who could see the facts as they really were could succeed, regardless of where they came from or how they looked. All he’d wanted when he came to DRE was the chance to compete on a level playing field. But Eisen was telling him that this was the level playing field, and Justin knew that in some sense Eisen was right. He’d always found something canny, even calculated, about Eisen’s lack of polish, and now he saw how it made the refinement of others look suspicious, a self-serving put-on. He thought of Kit’s remarks about Eisen’s sharp elbows and the rough way he played the game. Instead of feeling that Kit had been vindicated, he thought she’d only confirmed Eisen’s point. That afternoon, he emailed Joe Ambrose, who was still at Q&M, and invited him out for a drink. A year later, his total compensation cracked eight figures for the first time.
When Kit finally appeared, she was already in hostess mode, taking breakfast orders, which she relayed to Marinela before going to rouse Margo and Frank so they could all eat together. In the meantime, Lucy returned from her run, and Justin could see the whole morning slipping away in front of him. After they ate, they would lounge on the lawn or by the pool until Eddie arrived, and it would be impossible to get Kit alone without attracting attention.
Marinela reappeared in the doorway as they were finishing breakfast, and Justin saw his chance.
“Mrs. Doyle,” she said. “It’s Edward on the phone.”
