Life, on the Line (25 page)

Dagmara got a job with Citibank, and I started a small business selling posters to college students at the beginning of each new semester, and to doctors' offices the rest of the time. I didn't make much money, but it wasn't bad. It was on par with what I would have made starting out in a real job. Still, it wasn't a career.

Growing up in Chicago, it's hard not to hear stories of traders. New York has investment bankers, Chicago has floor traders, a much less prestigious and much more blue-collar job. I knew a few guys from my high school who skipped college altogether, hit the pits with a small stake, and were now developing condos while I was pondering law school. I also knew more than a few traders who were once rich and were now broke. I interviewed with companies like Société Générale and Goldman Sachs, but in the end the job offers and training programs seemed too much like jobs and not enough like a life. I would have little or no control over what I learned, where I worked, or how much money I made. So I took a job on the floor of the Chicago Mercantile Exchange making minimum wage and told myself that I would find a way to become an independent trader.

Six months of clerking on the floor was an eye-opener.The Chicago trading floors are loud, Darwinian places where your educational awards mean nothing and the last trading day could be, literally, your last trading day. Just as I was about to quit and figure out how to head to law school I met a young trader who was smart, analytical, and just leaving a large trading firm to start as an independent options trader. Even though he said he didn't need an employee I begged to work for him, going so far as to offer to pay him to work. He had the knowledge I needed.

I spent seven months working side by side with Frank Serrino as he made markets in Canadian Dollar options. Then I put up my savings from the poster business and he put up the other half of the money and I started trading I
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lots in Swiss Franc options. My goal was to make about $150 to $200 per day, then grow my account slowly, start trading 2-lots, and so on.

Trading for a living gets a lot of attention in the press due to day traders, rogue options traders who can take down banks, and evil hedge-fund thieves. But floor trading as an independent is more akin to being a professional golfer, except that every time you make a bad shot you pay money to the golfer who made a good shot. It's a zero-sum game, meaning that no wealth is created or destroyed; it simply shifts risk and money between players. It serves a useful purpose to the economy in aggregate, but as an individual trader it is akin to being psychoanalyzed 24/7. If you are good, 49 percent of your decisions will be wrong. Even if you are great, something just short of a majority will be losers. It's hard not to second-guess your decisions constantly, even though doing so produces precisely the wrong feedback and outcomes.

I read everything I could get my hands on about the markets, great traders, historical economics, and most of all, personal psychology. I made sure I was the first guy in my pit every day and the last one to leave. I was hazed mercilessly because I was young, overly serious, and about 150 pounds dripping wet. And since I was the first guy in the pit who had a computer in my pocket, I was also eventually seen as a threat.

Dagmara's father is a patent attorney and was not keen on having his daughter live with, let alone marry, someone who was falling short of their intellectual capacity. But one Christmas I was invited to ski with them in Aspen, Colorado. And there a wonderful thing happened.

Dagmara's parents were both born in Latvia, and food-wise they were the polar opposite of my parents. Constant travel and cultural exploration were the norm, and new food experiences were celebrated. One night we headed to a restaurant that sounded like a nightmare to me. Krabloonik, just outside Snowmass, bills itself as “Fine Dining & Dogsledding.” I didn't see how that combination could work. In addition, their seasonal menus specialized in local game meats like elk, buffalo, caribou, and wild boar. I had to be on my best behavior, but I was dreading the dinner.

There are two ways to get to the restaurant. You can ski there crosscountry—or snowshoe—or drive in through a beautiful but snowy country road. We drove in, parked, and then walked down past the dog kennels, where dogs were howling wildly in the snowy evening. The log-cabin restaurant was like a set design for the Rocky Mountain lifestyle: glowing fire, thick-beamed ceilings, warm lighting.

Dagmara's father ordered a bottle of red wine and some appetizers. I glanced through the menu and realized I would have to order a steak, because it was the only thing that looked familiar. I closed the menu quickly as the appetizers arrived.

Dagmara put caribou carpaccio on my plate and I glared at her accordingly. But this, she knew, was her chance to make sure I tried something new. She gave me that look that told me I better just go along. I took a big forkful in order to slug it back with some water, but as soon as it hit my mouth I paused. It was delicious. A silky texture mixed with capers, olive oil, and balsamic gave it everything at once—sweet, salty, and savory. I took another bite. “This is delicious. Caribou, huh?”

“Try it with the wine, Nick,” Dagmara's father, Tali, suggested. “It's Australian. One of my favorites.”

I had never had a decent glass of wine in my life. My parents were not wine drinkers, and I'd never had any in college. I took a sip. It was literally life-changing. I had no vocabulary to describe what I was tasting, so I just said, “Wow, what is that?”

“Penfolds Bin 707 Cabernet. You like it?”

I had already finished the glass along with the caribou. When the waiter came by I ordered the wild mushroom soup, a house specialty, along with seared elk tenderloin. Dagmara assumed that I was already drunk.

Tali and I polished off a few bottles of the Penfolds and, noticing my newfound interest, he decided to up the ante and ordered a bottle of vintage Bordeaux, as well. The entire experience was like a light switch being flipped. I had no idea that food and wine could be so intriguing and delicious.

I began reading about wine the way I read about trading. It was a fascinating subject simply because it was so vast and entrenched in history. I heard about a wine auction that the Chicago Wine Company was holding on a Saturday morning in the same building where Tali worked. I thought it would be a great way to find something we had in common and to spend some one-on-one time with my future father-in-law. I invited him along and he readily accepted.

The auction took place on the coldest Saturday morning in something like twenty years. It was well below zero outside with severe wind and snow. I woke up, looked outside, and called Tali. “That's too bad, I was looking forward to it,” I said.

“Nonsense. I'll pick you up in a few minutes. I have a parking space in the building. You won't even need a coat.”

We arrived in the dining room of the restaurant-club in the Prudential Building to find eighty bottles of vintage wine open and four people standing in a room with 150 seats. A man from the auction company with a British accent approached us and asked if we had purchased tickets to the pre-auction wine tasting. Tali looked at me, but I shook my head. I hadn't known about it.

“Well, never mind then. This dreadful weather has kept everyone away. No sense in letting all of this go to waste, and despite how I might try, I can't drink it all myself. Come along with me; I'll show you the highlights.”

We spent the next ninety minutes sampling 1982 Bordeaux, Burgundy from three decades, ports, sherries, and all manner of California cult wines that were just gaining prominence. By the time the auction started I was inebriated enough to purchase a single case of 1983 Grand-Puy-Lacoste, not great vintage, but a good one and a good value. I was hooked. And I enjoyed tremendously the opportunity to get to know Dagmara's father one-on-one.

In 1995 Dagmara and I were married.

 

I spent ten years trading.

I got faster and faster at making markets, of doing the math and calculations in my head, and working on models and programs for new trades and risk analysis. After two years with Frank I left with a single employee and a great friend, Jim Hansen, and together we backed ourselves with very little money and not much experience. But we were willing to outwork everyone else.

Over a period of six years we built a company by hiring what we called “corporate refugees,” teaching them how to think like a trader, and then backing them with our money when they were ready. We had former lawyers, accountants, and guys from advertising working for us. What they had in common is that they were willing to work for next to nothing for a year, devote themselves completely to retooling their psychology and discipline, and then work like hell in the pits—all because they had tasted corporate life and hated it. A few years in we had fifteen employees and Jim moved back to his native San Francisco to start an office at the Pacific Coast Exchange. I also invested in a Web company—Funbrain.com—in 1997 that was being built by Mike Cirks and Paul Hudson, the programming team that had developed our risk analysis software. The Web was poised to explode, and these two were trustworthy and brilliant. We did the deal on a handshake.

I had gone in a few years from making literally minimum wage to earning nearly a million dollars a year. I had also experienced the beginnings of what could be called “trader personality disorder.” The pace of the regular world seemed wildly slow, and my temper and patience grew shorter and shorter.

Then, in 1998, I reconnected with Keith Goggin, a classmate from Colgate who was now trading at the American Stock Exchange. Over the course of a year I lobbied the Merc to allow us to utilize a dedicated connection between traders at the Amex and the Merc to exchange traded funds in New York against their futures in Chicago. When we were finally given the go-ahead to do so, we were the first to have the technology and the connection, and our business exploded. In short order we merged our firms, began trading huge numbers of shares and contracts each day, and couldn't hire people fast enough. We began to make a great deal of money very quickly.

In April 1999 Dagmara and I had a son and we named him James Talis after my father and hers. Life was fantastic.

 

While I spent all of my time trading, Dagmara spent her early motherhood cooking. She had always loved food, and now that she spent more time at home with our son, she spent tons of time reading
Food & Wine
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Gourmet
during his naps. I would catch the 5:35 A.M. train into the city every day and be home by 4:30. By 6:00 P.M. a gourmet meal was on the table more nights than not. Multiple courses, handmade pastas, cakes, and even homemade gelato and sorbets were on the menu every night. When I did take a vacation we would often head to Napa. James's first birthday was spent with friends in Sonoma.

By 2001 I had largely attained my goals financially and professionally. I was tired, burned-out, and increasingly unable to enjoy anything. In February my father died of cancer. It was the hardest day of my life to watch him go.Then, on September 11th—his birthday and my parents' wedding anniversary—the terrorist attacks occurred and thirty-five of our employees were scattered around lower Manhattan fleeing the scene. My priorities changed quickly after that. Trading didn't seem terribly serious or important. In early 2002, after Dagmara pointed out that I was not happy, something that I myself had failed to realize, I rather abruptly retired from my firm.

At thirty-five years old, I was in some respects back to square one. I had no idea what I was going to do with the rest of my life.

 

We traveled for a bit and hit many of the great restaurants in Paris—Taillevent, La Tour D'Argent, L'Arpège, and L'Ami Louis among them. We also enjoyed a fantastic meal at Don Alfonso 1890 on the Amalfi Coast. Dagmara continued to cook, and now that I had more time, I started to expand from my basic love of grilling on my Big Green Egg to learn more complex techniques. But the withdrawal from work and the adrenaline rush of trading was hard to replace.

For a while I spent time looking at other Internet companies to invest in and small private-equity deals. These were satisfying to analyze because they were small, nimble companies built by passionate people. And while I invested in a few, I wasted a great deal of time going down blind alleys. I wanted to trade again, and a friend in the hedge-fund business provided an opportunity.

Then, on a Friday afternoon, Mike from Funbrain called Dagmara and invited us to a lunch at Trio.

I had been to Trio with my in-laws for a few brunches and one dinner, both under Rick Tramanto and Shawn McClain. I had enjoyed it, but wasn't anxious to go back, especially not for a lunch on a Friday. But the Cirks had the reservation and we loved to travel and dine with them, so off we went.

At the last moment, Mary and Mike had to cancel, so Dagmara and I indulged in a guilty pleasure all by ourselves. We were practically the only people there other than the staff.

We sat down and an elegant, thin gentleman approached the table. “Can I offer you a glass of champagne, perhaps, while you look over the menu?” Dagmara and I looked at each other and giggled. It was such an odd spur-of-the-moment lunch that we decided to go all in. “Sure. Please.”

“The chef does have a tasting menu the appropriate length for a lunch if you are so inclined.”

“Why not?” Dagmara said.

By the time our first substantial course came we were slack-jawed. After one bite of the lamb, which was woven together almost like a rope, I motioned for the waiter. “Is everything okay?” he asked with a smile on his face. He could tell we were pleased.

“Yeah. Everything is beyond okay. Uh, who is in the kitchen?” I knew from my previous visits that something had changed significantly, and for the better.