I am going to have my hands full with the upcoming months. Every time I talk to my boss, I learn something new. The man is absolutely amazing in his intensity and is razor sharp when it comes to negotiations, perhaps even more important is his tremendous people skills, he knows exactly how to push buttons and install respect/awe in your heart at same time.
For example, he asked me how old I am, and I told him 22, and he immediately said that I look older (28-29ish), and I have an incredible career in front of me. Compliments cost you nothing, yet extremely useful in winning over other people's heart. Proper use of compliments however is absolutely essential, as he definitely hit me in the soft spot with that one, as one of my biggest assets is youth, and one of my greatest obstacles is age. It was a very effective compliment. I remember when he interviews younger guys he tend to talk about buying their girl friend diamond bracelets, and when he interview Asian guys it is usually make your mother proud. There are so much I can learn from him.
There were a few issues I discussed with him today. The team I recruited from a competing firm is filing a law suit against them, sour grapes happen all the times in this business and our firm has some of the best lawyers in this business. It is most likely nothing more than a scare tactic, and my boss assured me that if it comes down to it he will pay it off, I was assured that I can let my guys trade with 100% confidence that someone has their back. My contract will most likely go into full effect on January 1st, 2002. He said he wants two weeks to make sure that everything is under control as he does not want to compromise my position as a team leader right off the bat just in case.
That said, he gave me the go-ahead signal to be absolutely relentless with recruiting. He gave me the power to basically outgun anybody on the street when it comes down to commission rates and payouts, simply because we self-clear. He even told me to continue to attack the firm we recruited that team from, and I explained to him that with the current tension it is best to stay clear. He told me that if I come across anyone from that firm, give him the number, he will do the recruiting and put the person on my team.
The way I see it, there are three types of traders in this industry.
On one end of the spectrum, there are people who make massive sizes at every firm, and they are probably happy for the most part, barring some unforeseen scenarios, it is almost impossible to recruit a super star performer when he is red hot, you may catch him if he is on a losing streak, but the risk is of course he blows up in your face.
There are also the fresh blood's, with very little capital and zero track record besides a Datek account statement, and it is almost guaranteed that they will lose some of your money before taking off, that is, IF they take off. You try to minimize the initial damage by having them trading 100 shares until they get to an acceptable level of performance. However, people who are willing to get a shot in this business without starting capital are a dime a dozen, and you really need to talk to them to separate dreamers and believers. For a firm's (and in my case, a trading team for that matter) longer term success, I am convinced that you have to give everyone a fair chance. My boss told me he wants well educated people (Ivy Leaguers, like her prince, my arch rival), here his people skill fell short a little bit as he forgot that I am a college dropout myself. I personally have a totally different set of criterias about who to hire. I want people who literally have no life and totally obsessed with the stock market in general, people who would spend hours after the close whether they had their best day or worst day. Most importantly, I am looking for people who came from blue collar families, so they have a sense of urgency, an instinct that reminds them that this is their best possible opportunity, if not the only opportunity, to make it big time. A silver spoon Ivy Leaguer (her prince), and a hungry college dropout with nothing to lose (me), I would (well I hope I am right in this specific match-up) put the money on the farmer boy over the prince every time. If you can control your losses, it comes down to who wants it more.
The third and last type of traders, is the type of trader everyone and their mother want. You have some guy who has been trading for a few months, he is about to break even, he is generating decent commissions, he is conservative and doesn't go crazy with size. He is probably at another firm, and not happy with his commission rates / payout. We can talk about atmosphere, training, team environment, software, and equipment all we want, but in the end, it is what you offer to a trader's bottomline that is most important. Like the way we buy a stock right before a breakout, every single firm is after traders who are close to a breakout. This is the tier that has most movements, the bloody battleground between recruiters. Quite simply, it is wonderful to let some other firm take the damage of the learning curve and you grab him as he starts to produce. Every firm wants to do this, every firm try not to let it happen too often, and it is an all out war.
Fortunately, with the type of rates that I am allowed to give out, combined with the fact that no other firm can start their traders with less capital than we require, I am very confident that I will smack down a lot of competition and break a lot of legs.
I have three friends at work that I wanted to bring onto my team. One is M, I have been trading with for six months, and we developed great chemistry. He just turned positive (read: like a stock that went down and just broke the high of the day, completing the "U" shape). Another is S, someone who is down nearly 9K (most in commissions) but seems to have consolidated into a potential bottom. Both M and S are good friends of my age, and I would have loved to have them on board. My boss didn't want to give them to me, simply because he wants me to stay hungry and aggressive, and go attack other sources, which I totally understand. However, Mrs D started her group with 4 people from our own firm, and two of them were steady performers already making a living (I know because I was one of them). Compared to M and S, it seems double standard that my boss is not cutting me any slacks, especially given the fact that I have been doing a solid job recruiting, and Mrs D have brought in only one guy since the inception of her group. Obviously, with the distasteful comments she threw my way, I am out to build a far superior team that will make her look like a joke, I am getting warmed up with the new recruits, but I would still like M, who is like a brother to me over the past six months and he really wants to be on my team. I know the boss doesn't want me to create competitions and start to recruit every free agent from within our own firm, but I gotta let M talk to him tommorrow, as we have truly developed our game together.
The trader I did get the approval for, is in his own words, someone nobody else wants. He is what you would call, a senior citizen who took part in a young man's game and is getting nowhere. An ex-broker with tremendous wisdom in just about everything in life, knows literally every stock, every indicator, spends 12 hours a day at our firm, the fatal wound is his inability to take shots. He has been trading for close to a year, and only avearges 2000 shares a day each way. He is down 13K after commissions, only a few K before.
Why did I say yes? Because being a good leader is more than just making profit off your guys, there is something called friendship that is far more important than money. I remember what he did for me in the past, telling me that I am going to make it during the summer losing streaks, telling me that I still have a chance when the princess reunited with her prince, and telling me that I am indeed good enough to excel in my current position when I had doubts about my age and lack of experience. He was there for me when I needed him, and now is my turn to give him my 100% effort, to at least try to make something happen. He is running out of time, within the next 3 months I must make a serious impact in him, a herculean task, but like pursuing the princess, not everything is like a stock trade, there are many low probability trades we take in life, not because it benefits us, but it is because it is the right thing to do.
And in this case, I owe him, my 100% effort to make him a better trader, and he shall have it now. Will it help? Even he would admit it, probably not, but he is a great book if you can get past the old dusty cover, and something tells me that he will give it all his got.
P.S. Given the heated recruiting battles, it is no wonder that many firms are adopting "golden cuff" policies. My firm has none, and that's called confidence in our rates.
