Martin Scorsese’s newest film, The Wolf of Wall Street, depicts the sad and dark side of the capitalistic machine. As many know by now, it’s based on the true life debauchery of a 1980s stock broker, Jordan Belfort (who also inspired the film Boiler Room). While entertaining, but considered a satire by its critics, the film does bring up the dark “sociopath-like” side of the few that give the whole bunch a bad name.
Now, I am not here trying to be a film critic or suggest that all brokers and traders are angels, or anything like that. Believe me when I say that the ‘80s was a time of insanity! I was a trader on the Chicago Mercantile Exchange floor back then, and with the leverage and my age working together, it took many years for me to conceptualize the “real world value” of money. At 24 years of age, my best days were making around $60K a day, but then I would lose $80K on my “bad days!” I have to say that I had a lot more of those bad days than good ones. Seriously, what kind of “normal job” lets a person make or loose that much money on a regular basis?
Regulation in the industry did finally catch up to what was happening and as usual, over shot the mark. Margins were raised, qualifications enacted and restrictions were implemented. The one thing that stands out were the people, the non-educated and non-professionals, chasing the easy money running to other sectors like mortgage brokers. Ex-pizza delivery guys were making $30,000/month, placing mortgages to everyone and anyone. Most had never even owned a house themselves. There was a short test, maybe, with no standardization or on-going education. We all know what happened to the housing market. The cycle repeats itself; Carbon Credits, Forex trading, funding of off-shore housing and palm oil, just to name a few.
First of all, in the movie, it is touted that stockbrokers are only interested in the commission. The mantra, in the equation of who can make money: the brokerage firm, the broker, and the customer— two out of three aren’t bad (suggesting the customer is at his own peril)! I refuse to believe anyone in the business doesn’t want his client to make money first and foremost. Anything other than that would dictate a career of constantly reinventing the wheel and rebuilding. It’s the basis of financial advisement; the better your clients do, the better you will do. If you don’t, your career will be short-lived. At the very least, a financial professional wants to be as transparent and candid in dealing with their clients.
The second point is that Capital Markets have an invaluable function in a capitalistic society. It is NOT one big casino, but rather the exchange and platform for liquidity and funding. It is the circulatory system of money and the capital system.
Without sounding self-serving, my firm; Grace Century provides the research, due diligence and structure for our clients to gain access to early growth companies that are never available to the regular investor. They are able to see opportunities that usually are only seen after a company goes public. The real money has already been made by then, but the risk has already been taken as well. To validate our model and bring value added to the table, our clients get constant updates and unprecedented access to the top management of the organizations we’ve researched.
Want to know what the sales are going to be this week for the company? Just send an email or pick up the phone. What are the short-term goals or what trade shows is management attending? Just pick up the phone. Have a suggestion as, for instance, a doctor who’s invested in one of our life science or regenerative medicine projects (and who also has a network)? Simply pick up the phone.
The building of a firm is not an easy task. It takes hard work once we’ve identified the real opportunities that fit our parameters; one out of fifty qualifies.
At the end of the day, this Wolf can go to bed at night knowing that he is doing the best he can for his clients and members at all times.