During the actual crash
of 1987 I was a sophomore at Cornell so I was playing billiards at Noyes Center,
playing fall ball on North Campus, or playing hoops at Barton Hall while the
market was unraveling. My Dad was in his foxhole – the Over the Counter trading
desk at Dean Witter where he spent all 30 years of his trading career. Having started at Dean Witter in 1969 he was a veteran by 1987. He ran with some big
dogs back then. His boss Jerry Mullins, his friends Buzzy Geduld, Ronny Weiss,
Jack Genovese, “Gus from Troster” were names I heard at my dinner table, names a
lot of old timers in this market would recognize as titans of the trading
industry.
I didn’t catch up with
my Dad about the market until later that week but I remember learning a few
great lessons when I did. The news flow was all about blood in the streets and
suicidal traders but I remember my father talking about it like just another
crazy trading day at the office. And maybe because finding a career rooted in
“craziness” was right up his alley. I don’t have a picture of him from 1987 but
everyone used to say he was a dead ringer for Jack Nicholson in the
Shining. He’s the kindest man on earth but he’s got the devil in
his eyes and I think that’s what made him a Wall Street survivor and humble
success for three decades.
I asked him if we lost a
lot of money as a family and he said “a little.” I asked him if he lost a lot
of money at work and he said “yeah a lot at first, but then once I figured out
what was going on I made it all back by the end of the day.” I had just learned there was opportunity for a 'come from
behind victory' – at work! I was highly intrigued by my first
connection that there was some sort of dealer in the middle of this mess that
could buy and sell, get long or short and navigate markets by instinct. I can
promise you my Dad wasn’t studying fundamentals when he got home from work at
night. He was and avid runner and reader of Popular Science listening to Earth
Wind and Fire on a Technics turntable.
The other thing I
learned was that my Dad didn’t put too many of his hard earned eggs in one
basket. I asked for an explanation why most people sounded so fatal about what
happened but we only lost “a little” money and he just answered something along
the lines of “that’s why I don’t invest in the stock market.” He was quite
aware that the career he built for himself, a gift from God to support our
family, was directly tied to the health of the stock market. Back then there was
always a running joke in our large Italian Family about where everyone’s life
savings was kept. Hint, it wasn't all in the bank. We still do the same
kind of thing; we just graduated from a mattress to a safe.
“In 1987 everybody tried to go to the exit at the same time, but the exit door wasn’t big enough. You had literally a panic. Fast forward to 2012. The volumes we can handle are gigantic, but the exit door hasn’t changed in size.”
E.E. “Buzzy” Geduld, Founder of Herzog Heine & Geduld and Cougar Trading, LLC
