About Those Mad Wall Street Egomaniacs We Call “Masters of the Universe”
Some people grow, other people swell. You’d better figure out who you are. — John Weinberg, Senior partner and chairman, Goldman Sachs, 1976 – 1990
Reading on a regular basis the Wall Street Journal on hedge fund managers, two themes emerge: They hate fame and they like to be feared.
That is not uncommon on Wall Street, where it’s better to be hated and rich than loved and famous.
That is, unfortunately, the hierarchy in the finance culture today: the more important you are, the less you need to be liked, and the less you need to be seen.
At the very top of the Wall Street pyramid are the billionaire hedge-fund managers, masters of the markets who are famous for not wanting fame. Their ability and desire to stay under the radar of the public is a signal of how really important they are. They flee from cameras, flee from being interviewed. Unflattering news, unflattering photos, are either bought with money or buried via legal action.
The distaste of fame often morphs into outright secrecy, especially amongst the hedge-fund set.
If fame is a sign of weakness for this hedge fund set, then secrecy is a sign of success. True masters of the markets don’t need anyone else’s help. They can divine the secrets behind the frenzy of blips on the screen, finding the hidden order in randomness, and turning that into gold. If you think you have that secret it’s dumb to tell others about it for free. Much better to charge huge fees to share in the benefits of your special knowledge.
People on TV giving investment advice? Either they are fools who don’t know anything and pretend to know it all, or they’re fools who know something and are giving it away for free. Either way, fools.
It also comes from being beaten up so often. Even the best trader loses about 45% of the time, beaten by the markets; random numbers that have no empathy. Taking that beating daily, weekly, monthly, wears on you. If you can’t beat the markets, beat the person closest to you.
I know I certainly did during my Wall Street years, berating anyone who crossed my path at the wrong time. After being wrong, I needed to show somebody I could be right. Reset the ego.
Masters of the markets may not want fame, but some certainly want the trappings it brings: the best tables at the best restaurants, access beyond the velvet ropes, and membership to the most exclusive clubs. So they get those things by simply buying them. Everything has a cost, and Wall Street loves to prove that. It confirms their worldview: money is the most important thing.
Eventually, for every Wall Street trader, for every hedge-fund manager, there will come a time when it is over. A run of luck will come to an end. The secret that made them feel special will be discovered. Or the regulators will find them, breathing down their necks, challenging the secrets as being too secret, or the wrong type of secrets.
The markets will win, they always do, and they are not magnanimous in victory.
Then the egos will be bruised, egos built up over many years of being lauded for being able to beat the markets. Egos that haven’t needed fame or love to nurture.
At that point, the money is there to offer solace. After a life of secrecy, a life of fear, they can rest with their money.
A fair share of anything is the starvation diet to an egomaniac.