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OK time for a quick Tales From Investment Banking. 1/n
2/n Back in the day (90s, not that long ago), we had to do shit manually. Want to look at a research report? Walk your ass down to the investment bank's library (full time staff of 4, filing paper copies of quarterly reports and such) and fight over the microfiche machine
3/n earnings estimates were a highly sought after piece of data, unavailable to the public. Firms like ours would pay up for "I/B/E/S" https://en.wikipedia.org/wiki/Institutional_Brokers%27_Estimate_System and other such data sources.
4/n One of the services we paid up for was Dow Jones, so we could search for news headlines and other such things so we wouldn't look like the total buffoons we were in front of clients.
5/n As a lowly i-banking analyst with almost no money during a generational bull market, I was going down the rat hole of trying to trade my way to riches. Compliance back then should have been called Compliant - you could trade anyhting not on the restricted list.
6/n I had been doing a deep dive on technical analysis, and had spent $500 of my hard earned money on Metastock - one of the few technical analysis packages back then that would allow you to really customize and create your own indicators https://en.wikipedia.org/wiki/MetaStock
7/n I was working 12-18 hour days as junior i-banking clown so had little time during the day, but used the software to write algos that would generate a handful of trading signals. But I had a problem.
8/n I couldn't really afford data, and given I was screening every stock in North America every day I needed a lot of it. I discovered that the Dow Jones service we subscribed for at the i bank also provided closing stock prices. Perfect.
9/n so for an entire month, I had my Pentium PC with a 33.3k baud modem (28.8 was for commercial bank humps not i-banking shooters like me) dial into the Dow Jones service, and pull down the closing price and volume for every North American stonk and have Metastock crunch it.
10/n It took about 6-7 hours for the whole thing to run, but every morning I'd skip to work with 5 or 6 stonks to choose from as a trade. Was a bull market so really didn't matter what I picked but it felt good with early wins.
11/n So about a month and a half later, one the Directors of the i-bank called me down to his office. This cat worked in the mining and resources group which was dead as a doorknob but couldn't be let go as his dad was on the board of several important clients.
12/n To keep him "busy" the actual purported COO of the i-bank put this fella in charge of "infrastruture and data" and training i-banking analysts on same. In training there was ne'er a mention of costs. "None of your goddamned business", and "if we need it we get it".
13/n So I wander down to this guys office and he says "Keubiko, I just need to go over some expenses with you - how did you use $100,000 worth of Dow Jones data last month"
14/n I was all:
15/n And he was all:
16/n I said "that doesn't sound right". And this guy says "I guess it's okay, we just need to know which client you're going to charge it too." I was all:
17/n I basically assumed I was about to canned. No way out. So I fessed up (kinda) and said I was doing some "research" on my own and there were no clients to charge the $100K to (and didn't remind him we were 2 weeks into the next month probably racked up another $50K).
18/n He was all
19/n But recall how this guy was in charge of analyst training on these systems. After he finished yelling I said "In training you never told us anything about quotes being $1 a piece, I just assumed the costs were fixed"
20/n My plan was to turn it from being 100% my fault, to 95% my fault and 5% his for his shitty training program. When he started realizing he would have to wear some of this shit he was all:
21/n So what was going to be a "you're fired" moment became a "what are we gonna do, bro?" moment.
22/n His "charge it to the client instincts" kicked in and he started going through a list of files that we might be able to stuff the charge on. I sat there quietly like the dumbfuck I was with mixed emotions of this guy wanting to steal from clients but also wanting my job.
23/n so I did something crazy and went to the actual COO and totally fessed up to what happened. She was amazing and instantly said "Don't worry, we pay so much to Down Jones I'll just call them, say it was a mistake, and they shouldn't charge us a dime.
24/n Dow Jones totally waived the fee, and the COO even pressured them into a flat fee for "quotes so my $100K /month stonk quote habit became a $100 expense paid by the firm.
25/25 the Director didn't talk to me for a few months. He knew what I did and I knew what he was trying to do. And that's how I survived that particular month.
