92 a hedge fund tale of reach and grasp
Doug was furious. “ You told me the payout was going to be twelve
percent, come hell or high water. You never mentioned it had anything
to do with what the fi rm or what other prop traders did. You ’ re reneg-
ing on our deal! ”
The warlord was defensive. “ I said about twelve percent. There was
no guarantee. ”
“ Bullshit, ” said Doug. “ We had a defi nite arrangement, and you
and the fi rm are violating it. Why should I be penalized because other
guys screwed up? ”
“ I could probably fi nd another fi fty thousand for you. Will that
make you happy? We like what you ’ re doing, Doug. Your returns and
your Sharpe ratio are good. ”
“ No, it won ’ t make me happy! What about next year? What ’ s the
payout going to be? Are you going to increase my line? ”
“ Sorry, but I can ’ t commit to either, yet. The fi rm is rethinking
the size of its allocation to prop trading. It ’ s the usual senior manage-
ment story. They love prop trading when she ’ s pretty and hate her when
she ’ s ugly. ”
“ That ’ s reassuring, ” said Doug. “ Thanks a lot, ” he said as he angrily
stomped out of the warlord ’ s small offi ce.
“ It really pisses me off, ” Doug told Joe. “ He painted me a picture.
I thought prop trading was going to be fun and exciting. It ’ s not. It ’ s
grinding, scary stuff. Last summer, when the shit hit the fan I was pretty
fully invested and the pressure practically ruined my life. Day and night
I was agonizing over every tick. It ’ s not investing; it ’
s fucking mindless
day trading with your career and family ’ s survival at stake. It stinks. ”
He sighed. “ One night this summer when Susan and I were out to
dinner, I got physically sick at a restaurant. Every night like clockwork
I was waking up at three in the morning hallucinating from nightmares
to check Japan and Asia. Try going back to sleep when your positions
are going the wrong way! I was taking Tylenol PM to sleep, and then
I would wake up with that crummy, lousy, hungover feeling. While I
was on vacation in August, I actually couldn ’ t get it up either because
of the Tylenol or because I was freaked about what was happening.
And then after I survived all this trauma and booked good money for
them, they cut my payout and I earn a lousy seven hundred twenty
thousand. ”
CH006.indd 92CH006.indd 92 1/5/11 8:37:21 PM1/5/11 8:37:21 PM