by MF Cheeze
(Recently I traveled to Armonk, New York, to visit the legendary stock trader Leland Filch, known everywhere as the notorious Shmendrick of Wall Street. Filch dazzled the financial world for decades with his daring trades and flamboyant personality. Now 107 years old and in failing health, Mr. Filch graciously allowed himself to be briefly disconnected from life support for this interview.)
Yeah, I was a trader. I flipped shares. I shaved points. Nowadays people look down on that kind of thing, but back then it was respectable, like selling corn dogs or being a pickpocket.
It was a way of life. You'd wake up in the morning, and you'd trade until you had enough money for breakfast. Then you'd trade some more until you had enough for lunch. If you wanted dessert, you kept trading until you had enough for pie. Then you'd trade 5% extra to pay the sales tax. After that, you'd keep on trading to get cab fare home. A lot of guys made a comfortable living doing that.
I started trading in bucket shops when I was 13. That was 1903. They'd pay me a nickel a day to write the stock quotes on a blackboard as they came in off the ticker. After a while I got good at guessing which way the price was going to go, so one day I took my nickel and started playing the market. It turned out I had a knack for it. In just three years I had run that five cents up to three quarters of a dollar, which is a pretty good return, percentage-wise. Once I knew I could do that, I was no good for regular work.
So I set myself up to do business downtown. There were three of us then--me, Bucky Dunder (who later killed himself when he found out how they make Spam), and Jonathan "Frenchie" Hobart. We thought we were real hotshots then, three wheeler-dealers on the make, out to show the world how it was done. Frenchie kept saying how when he got rich, he was going to buy a candy factory and have his face commemorated on a Pez dispenser.
So one day Buck shows up for work in lederhosen--I mean, with the knee socks and everything--and he says, look guys, call me nuts, but all the designers are saying that Bavarian Chic is going to be the next big fashion trend. If we put our money in this, we're a cinch to clean up. I said, Dunder, not only is that the dumbest idea I've ever heard, I'm going to short every one of those lousy designers to my last dime. Two days later, the Germans torpedoed the Lusitania, and that's how I made my first million.
You have to understand the trading system we had back then. At that time, you would take your "money" (as we called it) and invest it in a "stock." Then you'd sit back and hope the "stock" would "go up." (Let me know if I'm going too fast for you.) If it went up, then you would sell it. The idea was, you'd do this over and over again until you had enough mazoomas to pay Jean Harlow to fetch you your slippers in her teeth.
This was the foundation of the national economy.
Remember, Wall Street was a different place in those days. It was a real market. By that, I mean, it was like a grocery store. You could trade anything you wanted for stock--old rags, scrap metal, it didn't matter. Five chickens could get you 50 shares of Union Pacific. A peck of gooseberries was the same as 100 shares of Allegheny Rail. I remember once in the Panic of 1919, J. P. Morgan seized control of U. S. Steel with thirty turnips and the elastic on his wife's bloomers. Another time there was a fishmonger who got a margin call, and the next thing you know, the floor of the New York Stock Exchange is crawling with live eels. It was crazy. But nowadays they keep track of all that stuff with computers.
Everybody asks me about the Crash of '29. That was a day I'll never forget. There was panic in the streets. Grown men crying, their fists full of worthless paper. Millionaires turned to paupers inside of an hour. I only heard of one guy who made money that day--and that was only because he had the concession on clean underwear.
Everything was topsy-turvy. There were things you never saw before: brokers jumping out of windows, squirrels with antlers, Eleanor Roosevelt dancing the Charleston on the back of a camel. The ground shook, cracks tore open the sidewalk, and giant lizards battled to the death in the streets. Molten lava was spewing from the sewer grates. Everything was out of control. But then Rockefeller started buying heavily into RCA, and everything got back to normal.
The crash taught me a great lesson, though. I was with my partner, Bigby, that day. Bigby was a large man. I mean large. When he watched his weight, he had to use binoculars. We were following the ticker, and he said, oh my god, Ford is down 27, and it's not even ten o'clock. I said, too bad *you* couldn't lose that much by ten o'clock. And that's when he removed my liver with a stick pin.
The Depression was a tough time on Wall Street, but it was still possible to make money. I was making 14 cents an hour waiting on tables. That may not sound like much, but you have to remember, in those days, Andrew Mellon was only making nine cents. And he was the maitre d'. You'd think a guy like that would be bitter for having to take on a day job, but he was quite gracious about it, although he'd turn beet red whenever anybody mentioned the word "debenture."
I got back on my feet again in '38. Here's how it happened. One day I'm sweeping the floor in Chez Barf, and in walks Monty Quartz, the famous oil tycoon. Filch, he says, get rid of that apron, you're coming to work for me. The next thing I know, I'm sweeping the floor at his place, the lousy rat. But Quartz has a daughter, and by April, we're married. When Quartz dies later that spring from accidentally swallowing a live ostrich, I'm the only one left to take over the business.
So now I'm going like gangbusters. I'm a captain of industry. I'm in like Flynn, rolling in clover, riding the gravy train down easy street. I'm living the life of Riley, shaving with Ockham's razor on the horns of a dilemma with Hobson's choice. It's fat city, boys. I'm in the pink, a real pig in a poke, with a stitch in time. Buy Polaroid, dammit! Remember the Alamo! Buy! Buy! Buy!
(At this point, a medical attendant injected a clear liquid into one of Mr. Filch's biceps. Filch gurgled quietly for several minutes, and then resumed.)
Yeah, I remember Buffett, too. That kid had the damnedest luck. He'd buy a newspaper with a two-dollar bill and get back $15,000 in change. He'd find a penny on the sidewalk, and by the time he put it in his pocket, it was a couple of sawbucks. You'd send him out with a market order for 2,000 shares of Studebaker, and he'd screw up and come back with Xerox at eight cents a share. Everybody wanted to kill this guy. So finally I asked him, Warren, what's your secret? He just smiles and hands me a card with an address on it and says be there at midnight. So I go, and I peek in the door and there's fifteen stock analysts jumping naked around a pentagram waving liverwurst over their heads and chanting ooga booga. Naturally I run out of there screaming. Of course, I don't believe any of that stuff, but ever since, every time I buy an odd lot the Chairman of the Federal Reserve has a sinus attack.
These days, I don't know. You got stocks trading with names like Yahoo. I mean, what the heck is that? How in the Sam Hill can you take yourself serious when you trade a company called Yahoo? In my day, companies had names that meant something, like Intercontinental Fill Dirt and Amalgamated Wax. These were names you could stake your reputation on. Not like this here Yahoo, for crying out loud.
The trading life is tough. It takes a lot out of you. Sometimes I wonder if it was all worth it. If I had to do it all over again, maybe I'd try a nice quiet life instead, operating a gambling casino or running guns across the border. Things aren't so bad for me now though, since they're letting a 16-year-old candy striper named Bambi change my dressings.
Do I have any words of advice for any new traders just starting out? Yeah. Buy low. Sell high. Kill if you have to.