So read this book and eat your peas! You'll grow up big and strong!
So the book was titled Eat Your Peas! America's Crumbling Infrastructure And the Need To Rebuild It. We sent our final draft, along with everything on diskette, to Simon and Schuster, and after it was accepted, Harry and I took our wives out to dinner in the Inner Harbor. We felt both exhausted and exhilarated. I had never done anything like this before, and neither had Harry.
It turned out that the next step involved printing and publishing, none of which either of us had to do anything with. We didn't even have to find anybody to do a review of the book, so they could come up with the blurbs on the back cover. Simon and Schuster had some tame celebrities to do that. I mentioned to Harry that we would probably get tapped for that in the future on somebody else's book. He just shrugged and nodded agreement. The cover art work involved a dinner plate full of peas and a fork. There would probably be a book tour in the late fall, but what that would involve nobody was sure.
In the meantime, I needed to make some money! Some serious money! We were on the verge of the biggest market ripple since the start of the bull market in 1982. Now, five years in, the market was about to take a serious nosedive, a major dump that would be called Black Monday. The problem was that I wasn't sure when it would happen! All I remembered was the name, Black Monday, so I was reasonably sure it would happen at the beginning of the week, and that it had been in the fall.
So, what to do about it? First off, come up with a believable cover story! This wasn't me betting big on silver or oil all on my lonesome. I now had a major operation watching me. Throughout the spring I had been commenting to some of the others, especially those involved in trading operations, that the market was getting overheated, that a correction was due. By the summer I was saying it louder, and in July I had Missy, Jake Junior, and our trading team sit down with me one evening and we developed a few strategies.
What happens if the market tanks? How much warning might we get? What do we do about it? With our money? With our clients' money? What do we do after it tanks and we've hit bottom? We outlined some scenarios and I started paying close attention to the market. I knew it would be in the fall, but to me that meant September, October, or November. That's a pretty big window.
It happened in mid-October, the 19th, and the trading team picked it up overseas first. The Hong Kong market collapsed first, followed almost immediately by Australia and New Zealand. The turmoil moved westward, smacking London and the other European markets next, before hopping the Atlantic and pummeling the U.S. On the plus side, American markets and exchanges had the most warning, and we were hurt least of all. Hong Kong lost over 45% on their market, and the effects mitigated slightly as the tidal wave went westward. The American market, reflected in the Dow, only lost 22%, a still horrendous blow.
Why did it collapse? Who knows why, but the fact was that after five straight years of stellar returns, something was bound to happen. The market had grown softer, certainly since the springtime, and was getting nervous. The American Navy was trading shots in the Persian Gulf with the Iranians for a few days already, and that had the energy markets spooked. There was some profit taking, some general correction to the market, and the automated trading programs went crazy, overreacting and forcing the rest of the system to overreact.
The Buckman Group did well, however. My motto is that there is just as much money to be made on the downside as there is on the upside. What made the difference was that everybody else only suspected a problem, and I knew it for a fact. It made our reflexes much faster. Missy and the trading team worked up some strategies to both take some profits and short some stocks when I called a 'Code Red'. Then, when the market bottomed out, we could flip the switch, call a 'Code Green', and cover our positions and catch the rise. Another factor was that this wasn't a long lived blip. The market would generally keep rising through the rest of the decade and right to the end of the '90s.
Midnight on Sunday the 18th, Missy called me at home with knowledge of the Hong Kong crash. I knew immediately that this was the big one I had been waiting on. I told her to assemble the team and to be in the office at 4:00 AM. I rolled out of bed and told Marilyn I was going into the office. I showered and dressed, made myself a hot tea and finished it off, and then drove into Hereford and let myself in. Missy showed up at 3:30, lugging some doughnuts from an all night Dunkin Donuts franchise.
The others all arrived by 4:30, some of them looking bleary eyed and nobody was in their usual suits. I didn't care. Everybody logged onto the market networks and we followed the turmoil in London. They all turned to look at me nervously. I just nodded and said, "This is it. I'm calling the Code Red." Then I went to the break room and made myself some more tea, and snagged a cream filled bun. It was out of my hands.
We had a small trading operation, with Missy overseeing three traders. We didn't touch our tech positions, and certainly not the companies we were on the boards of. We only messed with the stuff we had liquid, and I didn't trust to the automated programs - I wanted humans making these decisions. By 8:00 we started seeing the early birds come in, and it was obvious to them that something was happening. By the time John and the two Jakes showed up, the market news was boiling, and I spent almost as much time calming them down as I was spending keeping Missy and the traders calm. None of them had ever been through this before. I shuttled in and out of the trading room, keeping a smile on my face and calmness in my demeanor. I was nervous myself; one misstep on our Code Red and Code Green scenarios could really fuck us over!
Well, let's be fair about it. I had never been through this before either, but I at least knew how it was going to end. By the end of the day, the Dow lost 22%, but the Buckman Group gained 10%. Tuesday morning I called the Code Green bright and early, and we picked up another 20%. By the end of the week, we had picked up another 20%, and at that point I called it off and we went back to our normal trading routines.
Missy and the traders were nervous wrecks by then, and I was working overtime to keep them sane and centered, but it worked. At the close of trading Friday, I posted the increase in our net worth on the wall, and then led a round of applause by the entire office. I also doubled their bonuses for the year and gave each of them a week at Hougomont for a vacation. I went home and had several drinks!
In one week, the Buckman Group had become a billion dollar operation.
Otherwise things went along normally. Charlie started second grade and the twins started pre-K. The house at the end of the day was only slightly less noisy and confusing than the main trading floor of the New York Stock Exchange. I would come in the front door, and be greeted with a kiss from Marilyn, reach down and scratch the head of a manic Dum-Dum, wave to Charlie who was heading outside to get into some sort of trouble, and try and figure out which of my daughters was trying to climb me. Sitting in my recliner only let the girls and Dum-Dum climb on top of me easier. Marilyn would bring me some iced tea.
It was a very good life. I knew it would come to an end someday, but that didn't mean it would end badly, just that it would end. It reminded me of my previous life, when I would go camping with Parker and the Boy Scouts, and Maggie was young and would be bringing all her girlfriends over. I could see the same dynamics going on now. At the time I had thought it was barely controlled chaos, but later, when they grew up and went off to college and their own lives, I discovered I missed it.