Limitless (14 page)

I looked at him and paused, quickly reviewing in my head
everything
I’d just read about Mediflux.

‘I didn’t buy any,’ I said. ‘In fact, I’m going to sell it short.’

This meant that, contrary to the prevailing wisdom in the room, I expected the Mediflux share price to fall. While they were all busy buying it, I would borrow Mediflux stock from my broker. I would then sell it, having committed to buying it back later at what I hoped would be a considerably lower price. The lower the price, of course, the greater the profit for me.

‘You’re going to
short
it?’

He said this quite loudly, and as the word
short
darted its way around the tables like an acute pain along a sciatic nerve, you could almost feel the whole room stiffen. There was a brief silence and then everyone started talking at the same time and checking their screens and looking across at my table. Over the next couple of minutes the tension in the room increased as the original Mediflux faction regrouped and began hurling comments in my direction.

‘Feel sorry for
you
, buddy.’

‘Margin call!’

‘Loser!’

I ignored these taunts and got on with executing my short-sell strategy on Mediflux, as well as looking after my other positions. For the next while the Mediflux share price continued to rise, reaching 51 points, but then it seemed to stabilize. Jay nudged me again and shrugged his shoulders as if to say,
Talk to me, why did you short it?

‘Because it’s all hype,’ I said. ‘What – a couple of mice with cancer in some laboratory somewhere sit up in bed and ask for tea and suddenly we’re all into a
buying
frenzy?’ I shook my head. ‘And when is this new protein they’re developing going to have a
commercial
application anyway? Five years? Ten years?’

Jay looked worried all of a sudden and seemed to recoil into himself.

‘Besides,’ I said, pointing at my screen, ‘Eiben-Chemcorp pulled out of a takeover deal of Mediflux about six months ago, and it was never properly explained – doesn’t anyone want to remember
that
?’

I could see him rapidly processing the information.

‘This does
not
have legs, Jay.’

He turned to the other guy beside him and started whispering. Soon – as my analysis made its way around to all of the other traders – dark clouds of uncertainty descended on the room.

From the babble of muttering and clicking that ensued, it was obvious that two camps were emerging – some of the traders were going to hold on to their stock, while others were going to join me in shorting Mediflux. Jay, and the guy beside him, reversed their positions. The baseball caps held fast to theirs, but refrained from
making any comments about it – not aloud, at any rate. I remained huddled over my terminal, keeping a low profile, even though the atmosphere was electric, with a definite sense that in the ecosystem of the room I was an interloper who was making some kind of a bid for power. I hadn’t intended it that way, of course, but the thing is, I
was
convinced that MEDX was a turkey – and so it was to prove.

Late in the afternoon, just as I had predicted, the stock collapsed. It started slipping at about 3.15 p.m., much to the consternation of about two thirds of the traders in the room. MEDX closed at 17½ points, a drop of 36½ points from its high, earlier in the day, of 54.

At the closing bell, a cheer went up from a small group sitting at the table directly opposite me. They came over afterwards to
introduce
themselves – and I realized that with them, Jay, the guy beside him, and one or two others, I had formed my own crew. It wasn’t only because they were happy to have taken the tip from me, but it was also, I think, because of what they saw as the sheer, ballsy scale of my own trade. I had shorted 5,000 MEDX shares and come away with over $180,000. This was more in one trade than most of them could hope to make in a year, and they loved it – loved the sanction it gave to risk, loved how it confirmed that scoring big
was
possible.

One of the three baseball caps nodded at me from across the room, a gesture that I think was meant to indicate he was conceding defeat, but then he left quickly with the other two and I didn’t get a chance to say to him – magnanimously, or, perhaps, patronizingly – that hey, they had come up with the stock in the first place. I still refused to go for a drink with anyone, but I did stick around for ages, chatting and trying to find out as much as I could about how day-trading firms like this one operated.

On my third morning at Lafayette I was the centre of attention. But I was also, undeniably, on trial. Was I a one-hit wonder – I’m sure they were all thinking – or did I actually know what the fuck I was doing?

As it turned out my period of probation only lasted a few hours. A position with a data-storage company, JKLS – not unlike the one of the previous day – soon presented itself, and I whispered to Jay
that I was about to initiate coverage of the stock at its current price with an immediate short-sell. Jay, who had quietly assumed the role of my underboss, passed on this information to the next table up, and within less than a minute it seemed that the whole room was shorting JKLS. During the course of the morning, I fed out a few other tips that some people, but certainly not everyone, picked up on. Early in the afternoon, however, when the JKLS price began falling rapidly, and a cheer went up, a quick review of my other tips took place, and the doubters joined in.

By the closing bell at four o’clock, it was
my
room.

Over the next couple of days, the trading ‘pit’ at Lafayette was packed to capacity – with all of the regulars in attendance, as well as quite a few new faces. I stuck to my short-selling strategy and led an onslaught against a whole series of overhyped and overvalued stocks. My instinct for identifying these stocks appeared to be unerring and it was thrilling to watch them all behave exactly as I had predicted. In turn, people were watching
me
very closely and naturally wanted to know how I was doing it, but since these same people were also making a lot of money from my recommendations, no one had the temerity to come out straight and simply ask me. Which was just as well, because I wouldn’t really have had an answer.

It did seem to me to be instinct, though – but informed instinct, instinct based on a huge amount of research, which of course, thanks to MDT-48, was conducted more rapidly and comprehensively than anyone at Lafayette would ever realize.

But that also wasn’t enough to explain it – because there were plenty of well-resourced, well-financed research departments around, from the windowless backrooms of investment banks and brokerage houses throughout the country, stuffed full of pale,
nameless
‘quants’ number-crunching till dawn, to places stuffed full of Nobel-prize winning mathematicians and economists, places like the Santa Fe Institute and MIT. For an individual, I was processing a huge amount of information – it was true – but I still couldn’t compete with outfits like those.

So what was it?

After the first day of my second week at Lafayette, I tried to
evaluate the various possibilities – maybe it was superior
information
, or heightened instinct, or brain chemistry, or some kind of mysterious synergy between the organic and the technological – but as I sat there at my table, staring vacantly at the screen, these
ruminations
slowly coalesced into an overwhelming vision of the vastness and beauty of the stock market itself. Grappling for understanding, I soon realized that despite its susceptibility to predictable metaphor – it was an ocean, a celestial firmament, a numerical representation of the will of God – the stock market
was
nevertheless something more than just a market for stocks. In its complexity and ceaseless motion the twenty-four-hour global network of trading systems was nothing less than a template for human consciousness, with the
electronic
marketplace perhaps forming humanity’s first tentative version of a collective nervous system, a global brain. Moreover, whatever interactive combination of wires and microchips and circuits and cells and receptors and synapses was required to achieve this grand convergence of band-width and brain-tissue, it seemed to me in that moment that
I
had tumbled upon it –
I
was jacked in and booted up …
my
mind was a living fractal, a mirrored part of the greater functioning whole.

I was also aware – not to lose the run of myself here – that
whenever
an individual is on the receiving end of a revelation like this, addressed to himself alone (and written out, say, on the night sky, as Nathaniel Hawthorne would have it), the revelation can only be the result of a morbid and disordered state of mind, but surely
this
was somehow different, surely
this
was empirical, demonstrable – after all, at the end of my sixth day of trading at Lafayette, I had an unbroken chain of winners and over
a million dollars
in my brokerage account.

That evening I went for a drink with Jay and a few of the others to a place on Fulton Street. After my third beer and half a dozen
cigarettes
, not to mention a torrent of day-trading lore from my new colleagues, I resolved to set a few things in train – changes that I felt it was now time to make. I resolved to put a deposit down on an apartment – somewhere bigger than my place on Tenth Street,
and in a different part of town, maybe Gramercy Park, or even Brooklyn Heights. I also resolved to throw out all my old clothes and furniture and accumulated
stuff
, and only replace what I absolutely needed. Most important, however, I resolved to move on from day-trading and into a wider playing field, to move up to money management maybe, or hedge funds or global markets.

I’d only been trading for little over a week, so naturally I didn’t have much idea about how I was going to pull something like this off, but when I got back to my apartment, as though on cue, there was a message from Kevin Doyle on my answering machine.

Click.

Beeep
.

‘Hi Eddie, Kevin – what is all this stuff I’ve been hearing? Call me.’

Without even taking my jacket off, I picked up the phone and dialled his number.

‘Hello.’

‘So what have you been hearing?’

Beat.

‘Lafayette, Eddie. Everyone’s talking about you.’

‘About
me
?’

‘Yeah. I happened to be having lunch with Carl and a few other people today when someone mentioned they’d heard rumours about a day-trading firm on Broad Street – and some trader there who was performing phenomenally. I made a few enquiries after lunch and your name came up.’

I smiled to myself and said, ‘Oh yeah?’

‘And Eddie, that’s not all. I was speaking to Carl again later and I told him what I’d found out. He was really interested, and when I said you were actually a
friend
of mine he said he’d like to meet you.’

‘That’s great, Kevin. I’d like to meet him. Any time that suits.’

‘Are you free tomorrow night?’

‘Yeah.’

He paused. ‘Let me call you back.’

He rang off immediately.

I went over and sat on the couch and looked around. I was going to be getting out of here soon – and not a moment too soon, either. I envisaged the spacious, elegantly decorated living-room of a house in Brooklyn Heights. I saw myself standing at a bay window, looking out on to one of those tree-lined streets that Melissa and I, on our way from Carroll Gardens into the city, on summer days, had often walked along, and even talked about one day living on. Cranberry Street. Orange Street. Pineapple Street.

The phone rang again. I stood up and walked across the room to answer it.

‘Eddie – Kevin. Drinks tomorrow night? At the Orpheus Room?’

‘Great. What time?’

‘Eight. But why don’t you and I meet at seven-thirty, that way I can fill you in on some stuff.’

‘Sure.’

I put the phone down.

As I stood there, with my hand still on the receiver, I began to feel light-headed and dizzy, and everything went dark for a second. Then, without consciously registering that I had moved –
and moved to the other side of the room
– I suddenly found myself reaching out to the edge of the couch for something to lean against.

It was only then that I realized I hadn’t eaten anything in three days.

I
ARRIVED AT THE
O
RPHEUS
R
OOM
before Kevin and took a seat at the bar. I ordered a club soda.

I didn’t know what I expected from this meeting, but it would certainly be interesting. Carl Van Loon was one of those names I’d seen in newspapers and magazines all throughout the 1980s, a name synonymous with that decade and its celebrated devotion to Greed. He might be quiet and retiring these days, but back then the chairman of Van Loon & Associates had been involved in several notorious property deals, including the construction of a gigantic and controversial office building in Manhattan. He had also been involved in some of the highest-profile leveraged buyouts of the period, and in countless mergers and acquisitions.

Back in those days, as well, Van Loon and his second wife,
interior-designer
Gabby De Paganis, had been denizens of the black-tie charity circuit and had had their pictures in the social pages of every issue of
New York
magazine and
Quest
and
Town and Country
. To me, he’d been a member of that gallery of cartoon characters – along with people like Al Sharpton, Leona Helmsley and John Gotti – that had made up the public life of the times, the public life we’d all consumed so voraciously on a daily basis, and then discussed and dissected at the slightest provocation.

I remember once being in the West Village with Melissa, for instance, about 1985 or 1986 – in Caffe Vivaldi – when she got up on her high horse about the proposed Van Loon Building. Van Loon had long wanted to regain the title of World’s Tallest for New York, and was proposing a glass box on the site of the old St Nicholas
Hotel on Forty-eighth Street. It had been designed at over fifteen hundred feet, but after endless objections was eventually built at just under a thousand. ‘What
is
this shit with skyscrapers?’ she’d said, holding up her espresso cup, ‘I mean, haven’t we gotten over it yet?’ OK, the skyscraper had once been the supreme symbol of corporate capitalism, indeed of America itself – what Ayn Rand referring to the Woolworth Building as seen from New York Harbour had called ‘the finger of God’ – but surely
we no longer needed it
, no longer needed people like Carl Van Loon coming along trying to imprint their adolescent fantasies on the city skyline. For the most part, in any case – she went on – the question of height had been irrelevant, a red herring, as skyscrapers had merely been
commercial
billboards
for the likes of sewing-machine companies and retailers and car manufacturers and newspapers. So what was
this
one going to be? A billboard for fucking
junk bonds
? Jesus.

Melissa, on occasions such as this, had wielded her espresso cup with a rare elegance – suitably indignant, but never spilling a drop, and always ready if necessary to flip the axis and start laughing at herself.

‘Eddie.’

She always calmed down in the same way, too – no matter how animated she’d become. She would lean her head slightly forward, maybe swirling whatever coffee was left in the cup, and go still and quiet, diaphanous strands of hair settling gently across her face.

‘
Eddie?
’

I turned around in my seat, away from the bar. Kevin was standing there, staring at me.

I held out my hand.

‘Kevin.’

‘Eddie.’

‘How are you?’

‘Fine.’

As we shook hands, I tried to edge that image of Melissa from my mind. I asked him if he wanted a drink – an Absolut on the rocks – and he did. A few minutes of small talk followed, and then Kevin started priming me for the meeting with Van Loon.

‘He’s … mercurial – one day he’s your best friend and the next he’ll look right through you, so don’t be put off if he’s a little weird.’

I nodded.

‘Oh, and – I’m sure I don’t have to tell you this – but … don’t pause or hesitate when you’re answering him, he hates that.’

I nodded again.

‘You see, he’s really caught up at the moment in this
MCL-Parnassus
thing with Hank Atwood and … I don’t know.’

One of the largest media conglomerates in the world, with cable, film studio and publishing divisions, MCL-Parnassus was the kind of company that business journalists liked to describe as ‘a megalith’ or ‘a behemoth’.

‘What’s going on with Atwood?’ I asked.

‘I’m not sure exactly, it’s all still under wraps.’ Then something occurred to him. ‘And
don’t ask him
– what
ever
you do.’

I could see that Kevin was having second thoughts about setting this thing up. He kept looking at his watch, as if he were working to a deadline and time was running out. He drained the last of the vodka from his glass at about ten to eight, ordered another one, and then said, ‘So, Eddie, just what exactly are you going to be telling him?’

‘I don’t know,’ I answered, shrugging my shoulders, ‘I suppose I’ll tell him about my adventures in day-trading, and give him a
run-down
of all the major positions I’ve held.’

Kevin seemed to be expecting something more than this – but
what?
Since I couldn’t offer him any satisfactory explanation for my success-rate, other than to refer to some
in
explicable ability I seemed to have developed, all I ended up saying was, ‘I’ve been
lucky
, Kevin. I mean – don’t get me wrong – I’ve worked at it, and I do a
lot
of research, but … yeah, things have gone my way.’

As far as Kevin was concerned, however, this kind of ill-defined bullshit clearly wasn’t going to be enough – even if he couldn’t bring himself to say as much out loud. It was then I realized that there was an underlying anxiety in everything he
had
been saying up to that point, a fear that unless he had some inside track on my trading strategy, and consequently some leverage with Van Loon, he was just
going to end up handing me over to Van Loon – and that then,
effectively
, he would be out of the picture.

But there wasn’t much I could do about that.

For my part, I felt pretty good. I’d eaten a plate of pasta
in bianco
after my disturbing spell of dizziness the previous evening. Then I’d taken some vitamin pills and diet supplements and gone to bed. I’d slept for about six hours, which was as much, if not more, than I’d managed in a month. I was still on two doses of MDT a day, but I now felt fresher and more in control – and more confident – than ever before.

Van Loon swept into the Orpheus Room as though he were being filmed in an elaborate tracking shot and this was just the last stage in a sequence that had taken him all the way from his limousine outside on the street. Tall, lean and a bit stooped, Van Loon was still quite an imposing figure. He was sixtyish and tanned, and the few wisps of hair he had left were a distinguished silvery-white. He shook my hand vigorously and then invited us both to join him over at his regular table in the corner.

I hadn’t seen him ordering anything or even making eye contact with the barman, but a couple of seconds after we’d sat down – me with my club soda and Kevin with his Absolut – Van Loon was served what looked like the perfect Martini. The waiter arrived, placed the glass down on the table and withdrew, all with a lightness of touch – silence and near invisibility – that was clearly reserved by
management
for a certain …
class
of customer.

‘So, Eddie Spinola,’ Van Loon said, looking me directly in the eyes, ‘what’s your secret?’

I could feel Kevin stiffen beside me.

‘Medication,’ I said at once, ‘I’m on special medication.’

Van Loon laughed at this. Then he picked up his Martini, raised it to me and said, ‘Well, I hope it’s a repeat prescription.’

This time
I
laughed, and raised my club soda to him.

But that was it. He didn’t pursue the matter any further. To Kevin’s obvious annoyance, Van Loon then went on to talk about his new Gulfstream V, and the problems he’d been having with it, and how
he’d spent sixteen months on a waiting list just to get the damned thing. He addressed all of these remarks directly to me, and I got the impression – because it was too pointed to be accidental – that he was deliberately excluding Kevin. I took it for granted, therefore, that we wouldn’t be going back to the subject of what my ‘secret’ might be, and we – or rather Van Loon – simply talked about other things … cigars, for example, and how he’d recently tried to buy JFK’s humidor, unsuccessfully as it had turned out. Or cars – his latest being a Maserati that had set him back nearly ‘two hundred large’.

Van Loon was brash and vulgar and conformed almost exactly to how I would have imagined him from his public profile of a decade before, but the strange thing was I liked him. There was a certain appeal in the way he focused so intently on money and on various imaginative, flamboyant ways of spending it. With Kevin, on the other hand, the emphasis seemed to be solely on ways of making it, and when a friend of Van Loon’s joined us a while later from another table, Kevin – true to form – succeeded in veering the conversation around to the subject of the markets. Van Loon’s friend was Frank Pierce, a fellow veteran from the 1980s who had worked for Goldman Sachs and was now running a private investment fund. None too subtly, Kevin mentioned something about using mathematics and advanced software programs to beat the markets.

I said nothing.

Frank Pierce, who was quite chubby and had beady eyes, said, ‘Horseshit. If it could be done, you think someone wouldn’t have done it by now?’ He looked around, and then added, ‘I mean, we all do quantitative analysis, we all do the
math
, but they’ve been going on about this other stuff for years, this black-box stuff, and it’s crap. It’s like trying to turn base metals into gold, it can’t be done, you can’t beat the markets – but there’ll always be some jerk with too many college degrees and a pony-tail who thinks you can.’

‘With respect,’ Kevin said, addressing himself to Frank Pierce, but obviously trying to draw me out at the same time, ‘there
are
some examples around of people who have beaten the markets, or appear to have.’

‘Beaten the markets
how
?’

Kevin glanced over in my direction, but I wasn’t going to rise to the bait. He was on his own.

‘Well,’ he said, ‘we haven’t always had the technology we have now, we haven’t always had the capacity to process such huge amounts of information. If you analyse enough data, patterns
will
emerge, and certain of those patterns just may have predictive value.’

‘
Horseshit
,’ Frank Pierce boomed again.

Kevin was a little taken aback at this, but he soldiered on. ‘I mean, by using complex systems and time-series analysis you can … you can identify pockets of probability. Then you patch these together into some mechanism for pattern-recognition …’ – he paused here, less sure of himself now, but also in too deep to stop – ‘… and from there you build a model to predict market trends.’

He looked over at me imploringly, as if to say
Eddie, please, am I on the right track here? Is this how you’re doing it?

‘Patterns my ass,’ said Pierce. ‘How do you think
we
made our money?’ He leant his weight forward in the chair and with his stubby index finger rapidly identified himself and Van Loon. ‘Huh?’ Then he pointed to his right temple, tapped it slowly, and said, ‘
Un-der-standing.
That’s how. Understanding how business works. Under standing when a company is overvalued, or undervalued. Under standing that you never make a bet you can’t afford to lose.’

Van Loon turned to me, like a chat-show host, and said, ‘Eddie?’

‘Absolutely,’ I said in a quiet voice, ‘no one could argue with that …’

‘
But?
’ Pierce snorted sarcastically. ‘There’s always a
but
with these guys.’

‘Yes,’ I went on, sensing Kevin’s obvious relief that I had deigned to speak, ‘there
is
a but. It’s a question of velocity’ – I had no idea what was coming next – ‘because … well, there’s no time for human judgement anymore. You see a chance, you blink and it’s gone. We are entering the age of decentralized, online decision-making, with the decisions being made by millions – and potentially
hundreds
of millions – of individual investors all around the world, people who have the ability to shift huge amounts of money around in less time
than it takes to sneeze, but without consulting each other. So,
understanding
doesn’t come into it – or, if it does, it’s not understanding how companies work, it’s understanding how mass psychology works.’

Pierce waved a hand through the air. ‘What – you think
you
can tell
me
why the markets boom or crash? Why today, let’s say? And not tomorrow, not yesterday?’

‘No, I can’t. But these
are
legitimate questions. Why should data cluster in predictable patterns? Why should there
be
a structure to the financial markets?’ I paused, waiting for someone to say
something
, but when no one did I went on, ‘because the markets are the product of human activity, and humans follow trends – it’s that simple.’

Kevin had gone pale by this stage.

‘And of course the trends are usually the same …
one
, aversion to risk, and
two
, follow the herd.’

‘
Pah
,’ said Pierce.

But he left it at that. He muttered something to Van Loon that I didn’t catch, and then looked at his watch. Kevin remained
motionless
, staring down at the carpet, almost in despair now.
Is that it
, he seemed to be thinking,
human fucking nature? How am I supposed to turn
that
to my advantage?

What
I
was feeling, on the other hand, was acute embarrassment. I hadn’t wanted to say anything in the first place, but I could hardly have ignored Van Loon’s invitation to contribute. So what happens? I speak and end up being a patronizing asshole.
Understanding
doesn’t come into it?
Where did
I
get off lecturing two billionaires about how to make money?