“Rich! Rich!” “Poor! Poor!”
And on like that for several weeks, until my wife pointed out that our entire investment portfolio consists of ten shares of Eastern Airlines inherited from my uncle Mel. The investment industry creates euphoria and panic. It moves astonishing amounts of cash around the world at startling speed with shocking results. Then it pays itself fantastic amounts of money. Companies registered with the United States Securities and Exchange Commission charged their customers $27.8 billion in brokerage fees in 1996. They made $30.7 billion trading for their own accounts, $12.6 billion underwriting stock issues, $10 billion selling mutual fund shares, and $84.3 billion doing things classified as, to use a technical SEC term, “other.” People on Wall Street don’t consider themselves seriously employed unless they’re “making a phone number.” Kids fresh out of business school are building indoor golf courses and dating Anna Nicole Smith. There’s an old stock-market joke about your investments: “The broker made money. The firm made money. Two out of three’s not bad.” Is the investment industry just a bunch of pirates in neckties? “Most of them are,” said a sales representative for a brokerage house. “What makes you think they’re not?” said a financial analyst. “I wish,” said a man who manages $2 billion of other people’s money. He was staring morosely at the yard-high stacks of annual reports and research materials on the credenza next to his desk. “I was out of town for two days,” he explained. “My secretary FedEx’ed me some other stuff.” “The work hours are horrible,” explained the Irish specialist broker. “Tons of hours. It takes speed, concentration. There’s a big burnout factor. A lot of ‘I want a life.’” But the same can be said of delivering Domino’s pizzas. The professionals in the world of money seem to make so much of that money themselves. How can anybody justify the size of the paychecks?
“I don’t,” said the $2 billion money manager. “I can’t defend it,” said David the floor broker. “They shouldn’t be making it,” said the specialist.
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