15. The Audible

I worked around the clock, trying to create profits by day and Minyanville at night and during the weekends. I was no longer motivated by conventional measures of success such as money or status—things that had seemed so important to me just a few months prior.

I knew that 9/11 affected me—seeds were planted that day that sowed beneath my consciousness—but hadn’t a clue how profound the ramifications were. I internalized my experiences and thought to myself that nothing would ever stop me if I could just power through. If I could just power through….

My soul and spirit felt like damaged goods, and I didn’t go out much, which was a rapid departure from the active lifestyle I once lived. My friends reached out, but who had time for that? There was too much to do, or that was my internal rationalization when I opted for a few hours of sleep when I stopped working. Eventually, my phone stopped ringing, and social invitations dried up. I barely noticed.

I couldn’t continue at that pace and didn’t want to. I remember looking into the mirror one morning and not recognizing the drawn, empty face that returned my stare.

I had started a children’s foundation in my grandfather’s name, and I wanted to extend that sense of purpose to my career. I didn’t want my headstone to one day read, “He had a good feel for the tape.” I knew the financial markets and I loved my grandfather—Minyanville and the Ruby Peck Foundation were the only solutions that made any sense.

It had quickly become an expensive reality, one that ultimately cost millions of dollars, but once I began to pave that path, there was no turning back. The hours turned into days, the days into weeks, and the weeks into months. Before I knew it, I was staring at the final stretch of 2002. It was almost time to reset the clocks.

Houston, We Have Liftoff…

We launched Minyanville.com in October 2002 as a “financial infotainment and education” platform.

TheStreet.com chose that exact day to open their Web site for free as we pulled back our curtain. I knew they were watching, but I underestimated their agenda. I had reached out to them before we launched, offering my content for free as long as it was branded Minyanville. Their response was essentially, “Go fuck yourself—you’re the enemy now.” They were ruthless, but they weren’t idiots. The last thing they were going to do was lead my readers directly to me.

I searched TheStreet.com Web site and realized they had deleted most of my content from the archives. Countless travails from the inner elasticity of the bubble, personal reflections about my grandfather, steadying words to investors on how to position for the new world—all gone.

Cramer took some of his money out of the fund, and I could tell he was leaning on Jeff. It was a tough spot for my good friend, and the stress was evident. Imagine working with someone you genuinely love, a person who chose you to facilitate his success, only to become a source of angst instead. I resented Jim for that. Whatever was going on was between us, but he had leverage with our investors, and used that influence to turn the screws on my partner.

By December, we were tired and fried after yet another year of battle. Our 2002 results mirrored those of a year earlier, marginally positive gains and well below what we were capable of doing. And we were miserable, which is an unpleasant dynamic in any environment, but an absolute barrier when battling for performance in the fierce world of finance. If you’re not on the same wavelength as the guy next to you, you won’t shoot straight when performance is in your sights.

Just as Jeff and I communicated without words while trading, we had a similar connection away from the tape. He was equally aware that our relationship was strained. He had Jim on one side, our investors on the other, and a staff that relied on us both to put food on their table in the middle.

He, like me, wore his heart on his sleeve, and I could see it beating a mile away.

Exit Strategy

The conversation started as any other, with me asking him if we could get off the desk and chat. When we shut the door to his office, there was a silence that spoke volumes about what needed to be said. I don’t know how the conversation would have gone if I hadn’t started it, but I imagine the outcome would have been much the same. It was one of the most honest and heartfelt discussions we ever shared.

“This isn’t working,” I began as we looked into each other’s eyes. “I agree,” he responded, quicker than I anticipated.

As partners, we knew what needed to be done, but as friends, we were saddened that it came to that. He knew that I was building Minyanville, and deep down, I knew it wasn’t fair to put him in that position. Writing while trading was a great idea when your partner owned the company and performance was pristine, but it was entirely different when you’re viewed as competition and profits are elusive.

In the former situation, it’s a seamless dynamic, and in the latter, an unnecessary distraction.

Twenty minutes later, I tendered my resignation. After fifteen years of friendship and three years of blood, sweat, tears, and laughter, we decided that we would part ways.

It was the middle of December—almost three years to the day after we uncorked those bottles at Gramercy Tavern—and I suddenly had no idea where I was going to operate from. That’s a problem when you’ve already spent a million dollars on a Web site that was predicated on mapping the financial markets.

For the first time, the reality of the situation hit home. I had three weeks to relocate, and two of them were already booked at an expensive resort in Bora Bora. I took my trading team to dinner that night and assured them they would be taken care of, although I was less sure about myself.

In a few short weeks, I would need a new home, and I hadn’t a clue where that would be.

Blink and You’re in Business

It didn’t take long for the word to spread. Wall Street is a small place when it comes to juicy news. Our trading coverage—from Goldman to Morgan to Bear Stearns to Lehman Brothers—lined their pockets with commission revenues generated by Cramer Berkowitz, a number that grossed between $90 million to $100 million per year during my tenure at the head of the desk. They weren’t happy that the gatekeeper was relinquishing the keys to the castle, particularly when the castle did business the right way.

Minyanville had launched, I was the only writer, and the Ruby Peck Foundation had proven costlier than anticipated. I needed a home that allowed me to stay in the flow and make some dough, and after 12 years on the Street, I had peers who had a vested interest where I landed.

I listened to a few offers, unsure of which direction to pursue, when a former colleague asked to meet with me before I made any decision. He worked with a reputable money manager at a fund located on Park Avenue and as part of their business model they operated a “hedge fund hotel,” providing space, trading systems, and human capital in exchange for order flow and trading commissions.

I walked to their offices and was immediately impressed with the large marble lobby that housed some of the world’s largest financial institutions. I made the rounds, sat with the principal players, and listened to possible collaborations. “You should think about starting your own fund,” they said. “We’ll set you up here and help with the process and paperwork.”

It wasn’t something I had seriously considered, but they were friendly faces with a solid structure. And they believed in me, which wasn’t something I overlooked.

Minyanville was costing almost six figures per month on top of my initial investment, and I had numerous other obligations. Furthermore, the effort required and the costs to start a not-for-profit foundation after 9/11 were substantial. I needed a revenue generator, something that could underwrite a symbiotic ecosystem for all three endeavors. I had honed my skills at Morgan, sharpened them at Galleon, and demonstrated them at Cramer Berkowitz, building one of the finest desks on Wall Street. As I listened to the potential hedge fund structures, my mind began to calculate the windfall.

A typical structure charges 1% of total assets as a management fee and 20% profits as a performance fee, but they floated something differently, a structure with no management fee and 50% payout of the profits. It was a deal reserved for the best traders on the Street, a back-end loaded payday based purely on performance.

They offered to seed me, and while I wasn’t particularly thrilled about launching a new fund, the offer was too good to refuse. I had faith in my abilities and plowed most of my money into the fund. Others followed, and before I knew it, I had moved my personal items and sports memorabilia to my new Park Avenue home.