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Lloyd Blankfein Proves Once a Trader, Always a Trader

Lloyd Blankfein Proves Once a Trader, Always a Trader

We learned last week that former Goldman Sachs Group Inc. Chief Executive Officer Lloyd Blankfein has some extra time on his hands, having failed to transition into a policy-making role in Washington like so many ex-officials at the Wall Street powerhouse have done. How is he spending that time? Trading. Blankfein, 67, said in an interview with Bloomberg News that he makes several trades in his personal account every day, usually stocks and commodities but occasionally currencies. 

Anyone who has spent time on an institutional trading desk will immediately recognize this behavior for what it is: Once a trader, always a trader. A pickle can’t turn back into a cucumber. It’s in your DNA and it affects how you see the world. Every situation is or isn’t an opportunity. There is always money to be made somewhere. You can’t stop just because you’re retired.

Trading is an addiction of sorts. It has much in common with gambling, even though professional traders maintain that it isn’t anything like gambling. But once you have acquired a financial instrument and watched its value fluctuate, it’s hard not to be beguiled by the exhilaration of having money at risk. Blankfein says he gets up in the middle of the night to check foreign markets and trade. I did that at one point in my career, too. It’s fun, but it’s not for everyone. Whether it’s stocks, roulette, horses or cryptocurrencies, some people just don’t feel alive unless they are taking risks.

For someone who makes a living taking risk in his or her professional life, it’s hard to turn it off in their personal life. Traders are often libertines, indulging a variety of impulses. This was more common 20 years ago before Wall Street underwent a cultural overhaul as a result of the financial crisis. But I don’t run into too many risk-takers these days who are profoundly boring people. Taking risk in your personal life often means doing something you shouldn’t, accompanied by the thrill of the possibility of getting caught. I don’t consider this behavior to be immoral; it just comes with the territory.

My first exposure to finance was on the open-outcry trading floor of the Pacific Coast Options Exchange in 1999. I set up an informal meeting with one of the market makers who was busy trading options tied to the shares of Sun Microsystems. I walked into a dark, musty room full of computer screens with multicolored numbers on them. Everyone was wearing trading smocks and sneakers, yelling at each other and throwing pieces of paper around. About what, I had no idea, but I loved the environment.

One thing you notice about new traders is that within a few months they start speaking what seems like a different language. They say things like “stop me out on lunch,” or “I’m a size bid for that watch.” They eat at the steakhouse Del Frisco’s for lunch and they start wearing ridiculous vests. Although the vests weren’t a thing when I was a trader, it was the equally ludicrous $200 ties that were the thing in those days. Trading isn’t simply a lunch pail and thermos 9-to-5 job; it becomes who you are and you become steeped in this culture that most people find bizarre.

Across the street from where I worked at Lehman Brothers Holdings Inc. back in the 2000s was a Dunkin’ Donuts. The woman who ran the cash register there was unquestionably brilliant. She could handle five customers at a time, speak three languages and make change in less than a second. She was one of the quickest people with math I have ever seen. The Lehman traders had a great deal of respect for her, and even talked seriously about hiring her! She would have made a fine colleague. She was fast, decisive and ruthlessly efficient. And she seemed to be endowed with a competitiveness that could have potentially made her very successful on Wall Street.

Thirteen years after leaving Wall Street, I’m still trading, just at a much lower frequency. Even so, my broker knows that I will still haggle over the terms of a trade’s execution. And I can’t help but think about what a blessing it’s been to have worked in the capital markets. The stock market is a great mystery beyond the realm of human understanding for most people. I obtained a great education on Wall Street and I’ve been blessed with the ability to make money in the markets — a gift that will last a lifetime.

Honestly, out of all the possible career paths that former Goldman Sachs executives typically take in public service, I’m way more envious of Blankfein and his day trading (and his philanthropy). That’s what I’d like to be doing when I’m 67 — trading up a storm and living my best life — and not being within 1,000 miles of politics. Jon Corzine, Hank Paulson, Gary Cohn, Steve Mnuchin and Robert Kaplan entered public service and they all got more than they probably bargained for by doing so. Trading is a good life, and it’s not a life without meaning.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Jared Dillian is the editor and publisher of The Daily Dirtnap, investment strategist at Mauldin Economics, and the author of "Street Freak" and "All the Evil of This World." He may have a stake in the areas he writes about.

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