“New York is a hellhole! And you know how I feel about hellholes!” — Homer Simpson
I’ve been living in New York City for 12 years now. After the usual “where are you from” exchanges during casual small talk, people ask me how I feel about that. I get this one common question way too often: Are you a true New Yorker now?
What? Don’t ever call me that again. That’s highly inappropriate. Don’t you see my cap says LA? Then I eject immediately from the conversation.
Well, no, my real answer is usually some version of “I’m a California guy but I’m stuck here for a bit because you know… life.” You know what my impression of New York was when I was kid? I thought it was a hell hole of a city. I watched that Simpsons episode where they go to New York and took it as the gospel. There’s trash everywhere. Criminals on every corner and the cops are even worse. Everyone is rude. The food carts are gross. And don’t get me started on the evil Yankees and their overrated golden boy Jeter. I was constantly arguing with obnoxious New Yorkers on online baseball forums about the proper ranking of MLB shortstops. The Captain’s defensive metrics were straight up trash yet he kept winning gold gloves. A-Rod, Nomar, and Tejada were all better, they just didn’t get hyped up by the East Coast Bias media mafia. If I walked down a street and saw a Yankees cap, I instantly thought that person was an asshole. The last place I ever thought I’d move to was New York City.
You know how in every school, no matter what state you’re in, you got these dreamy-eyed, worldly kids who are just dying to move to NYC? They see a Broadway play on vacation or a Woody Allen movie, and it’s instantly Oh My God I <3 New York I want to live there! Infatuated with this overly-romanticized version of the city, they make it their life’s mission to escape their boring little town and “make it” in NYC. I was nothing like that, I swear.
So how did I end up here? I didn’t give NYC a second thought until my last year of college.
In college, I had this obsession with day trading. And we’ll go over my college years maybe in another post. At the time, I read a lot of books about financial markets and trading. I was becoming more sure that this was I wanted to do for a living. The only question was where to go next. Did I want to get into hedge funds? Bulge brackets? Commodites and energy trading? I had to read more about the industry of trading itself. There wasn’t a lot out there, it was mostly trash about predicting price movements with miracle indicators, but there was one book that very specifically dug into the industry of proprietary trading.
That one book really hooked me good.
Two Great Positions, or TGP for short hand, was centered on a prop firm managed by the author Victor–a firm called MBC Securities. TGP, a book, about MBC, a prop trading firm. By the way, this is all completely fictional creative writing on my part.
TGP wasn’t the best written book. It didn’t have a single actionable trading strategy in it. It mostly comprised of stories and anecdotes of MBC prop traders trying to make a living in NYC. Young guys competing for best pnl on the trading desk. Old guys teaching the young guys how to trade. Successful traders working their asses off by honing their strategies and their mental game. Unsuccessful traders dicking around and not knowing how to take a loss. There was something compelling about it because it was giving me a vision for the trader I wanted to be. I had no workplace experience, it was all up to the imagination. TGP was giving me imagination fuel on where I saw myself in the future and what I wanted to be a part of.
TGP doubled as a sales pitch for MBC Securities. I’m just going to bullet list all the things I remembered about my impression of MBC from vignettes in the book and how it hit on certain appeals for my young, impression 20-something self:
- They had a loaded roster of young traders, all trained in-house through the vaunted MBC training program, and now they make $5k-$10k a day. Victor gave them all these colorful nicknames like “Mister Momentum” or “Tiger Killer” or “Doctor $” or “Maverick”. Everyone had different backgrounds: some were Ivy Leaguers, some were from city college, some were athletes in college, others a bit more bookish, some were outgoing and some were shy. What they all shared in common was they just “got” trading. Most people just don’t get it, they’re in it only for the money and it’s just a phase but these guys were truly obsessed with conquering markets. I can’t wait to meet all these great day traders in person!
- They had all these state-of-the-art tools to get better: trading simulator, analytics software, and most impressive of all–a massive amount of video recordings of level II tape patterns and all the algos they could see plain as day. Those simple algos are going to be pillaged for easy gains every single day once I’ve consumed them all. I thought once I was done with the simulator, which the author called “Secret Weapon X,” I was going to be like Neo in the Matrix, just fighting my way through all these algos in GOOG and AMZN and AAPL and scooping up all the spreads.
- Because of their tape reading ability and ninja-fast trading skills, MBC traders absolutely killed it in 2008 while all the hedge funds tanked. They didn’t need spreadsheets and pie charts about free cash flow ratios to take a 5% position held over years to generate alpha returns, it was just bang-in, bang-out for 30 seconds flat to make a grand. I liked that style of trading, makes it sound like a video game.
- The managing partners used to make millions of dollars in the golden age of trading (the late 1990s) and now pride themselves as world class trading coaches. They even make apperaances on CNBC Fast Money. I can’t wait for them to share all their wisdoms and teach me to be a millionaire trader.
- Victor was very real about the high failure rate of prop trading. Most people just never learn how to not lose money, let alone how to make it consistently at an above-average rate of return. Most people don’t have the discipline or patience. Or even if they do, they just never pick up the “essence” of understanding short-term price movements. I respected him for not blowing smoke up my ass. The fact that trading was an extremely difficult pursuit with similar success rates to athlete/actor/entrepreneur, only made it more enticing as a personal challenge.
- New York seems like a cool city I guess. After you make a teacher’s salary within a week, you go out with the boys for happy hour drinks. You can be that charismatic dude at the bar who slaps down a few hundos to buy a round for the house and you’ll have the attention of all the chicks. Tell them you’re a trader and their eyes will light up. Something like that.
I saw myself as a part of this team of super talented traders, sharing trading ideas, training hard every day, competing with each other to rack up crazy profits–similar to a sports team. TGP scratched my lifelong itch that I could be “great at something”. And then once I conquer the markets in the financial capital of the world, I would be seen as sophisticated and respected. Pete, the King of the Universe.
At the end of the book, Victor encouraged undergrads who were passionate about trading to look into the firm and send an e-mail. The highest priority would be given to the kids who had already taken the proactive steps to trade their own account and here I was, trading every single day on Interactive Brokers for the last 2 years. I attached a resume and a brokerage statement. I said I read TGP, I was a big fan, made some stupid attempt to make a poignant market observation at the time so as to give an impression that I knew what I was talking about, and then clicked send.
Their response? MBC invited me to come visit their NYC trading desk during winter break.
(to be continued in Scholarship)