The Secret Broker: How an Inner Pickle got me Pistol Knight
The Secret Broker
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After 35 years of stockbroking for some of the biggest houses and investors in Australia and the UK, the Secret Broker is regaling Stockhead readers with his colourful war stories — from the trading floor to the dealer’s desk.
I always love a good play on words and a certain story this week brought back some old locked away memories.
When I was 18, my then boss was a man by the name of Freddie Wright. He was in charge of a few important things and one of them was ‘Account 2674’, which was a back office management booking account.
Every broking firm would have one of these accounts. It was where bargains (the correct name for a share purchase) were booked to when a client could not be reached for their booking instructions.
For example, if a client had given a limit order that got filled during the day and was uncontactable (read “at Ascot or Wimbledon”), then it would get booked to ‘Account 2674’ overnight in a pre-mobile phone manner.
When the client had finally sobered up and was back at his estate having kippers and eggs, early morning booking instructions could be taken.
Once in, Freddie would then book the shares out of this overnight account and into the client’s account, as per their instruction.
So, Freddie was the gatekeeper of this account. That meant he held a lot of responsibility and the partners trusted him 100% in his duties. That’s beacuse they had to wear the liability overnight for all of the purchases, as every sale and purchase had to be settled every day, before we all headed to the pub.
Nothing was ever allowed to not be booked out and left hanging for the next day. Nothing. Stock Exchange rules and regulations.
I sat next to Freddie and he had worked there for over 30 years. He smoked two cigars a day in the office and it was only a couple of years later that I would really understand what was going on in the conversations he would have with the firm’s brokers and partners.
“Right Freddie,” they would say. “I’m in a pickle and need to park 100,000 Royals into ‘Account 2674’ overnight, as I can’t get hold of the client.”
100,000 Royals would mean 100,000 shares in Royal Insurance (not potatoes). As they were around £3.18 at the time, the firm would be holding a liability of £318,000 overnight.
So, Freddie would become known as ‘Right Freddie Wright’ and the ‘Account 2674’ became known by the nickname ‘Inner Pickle’.
(Incidentally, Eddie Wong, who was in charge of the firm’s computer mainframe, became known as Wrong Eddie Wong, as he could never find out what was wrong without pulling out an important plug and muttering “I just don’t know what is wrong” to himself.)
A few years later, when I was let loose on some of the firm’s clients, I would sometimes need Freddie’s services and his overnight holding account. Especially when – how should I say this – maybe the client you “couldn’t get hold of” was actually, uh, you.
Now, there won’t be any broker from the 80s and 90s who wouldn’t know about this colourful, yet grey area, of broking. That’s why ‘Account 2674’ was nicknamed ‘Inner Pickle’ – it gave you some breathing space overnight to work out who to book a losing trade to the next morning.
They don’t call them the “good old days” for nothing.
The guy two years earlier – the one that wanted Freddie to hold 100,000 Royals overnight – actually booked them out to his wealthy mother the next day! He had tried to day trade them, they had fallen 20 pence and overnight he had persuaded mum to take them. His ‘Inner Pickle’ became an Account 2674 ‘Outer Pickle’.
It quickly became office lore. If you were in the pub looking a bit grim and someone asked you what was wrong, all you had to say was ‘2674’. A PA (Personal Account) punt gone wrong, which had to be sorted by the morning, or you could be wearing a loss that you could not cover.
Luckily, one of our mates was a fund manager and if you called him first thing in the morning and mentioned ‘2674’ he would call you back five minutes later with an account to book the losing trade to. This would also be accompanied with a restaurant booking for lunch.
The cost of lunch at the Long Room Steak House would be around £200. But the loss that he sneaked into a fund saved you from wearing a £20,000 bad bet… and certainly got you ‘outer’ a pickle.
I remember having to call on him one day after a wayward punt had gone all ‘Eddie Wong’ on me. When I sat down at the lunch table, he laughed and said: “Christ, you look like you’ve been on the piss all night.”
Well, I had been, as I was so worried about my predicament.
He was so good to us all, that for a birthday present one year, we all chipped in and bought him a greyhound called Kobi, as he loved his racing.
Kobi needed a racing name, and we had put forward a few which the Greyhound Board quickly rejected on the grounds of causing offence.
After about 20 rejections, we snuck through ‘Pistol Knight’. That meant that we could now get pissed all night and watch Pistol Knight lose our money, every Tuesday at the Wembley Greyhound Track.
Pistol Knight had become our Outer Pickle!
The actual story that triggered off these memories appeared in the FT and had the headline ‘The U$100m Pickle’.
The article was about a little American deli, which had become worth U$100m because its OTC (Over The Counter) listed shares had gone from U$1.00 to over U$13 on speculation that a major backdoor listing was about to be put into it.
As the deli only made a profit of US$18,000 for the year, the article surmised that it could be top of the market. If so, and you are still holding your AfterPay shares this week, then you certainly are in a pickle – or a ‘Branson’, as the barrow boys would say.
As for me, I’m off to the dogs.
The Secret Broker can be found on Twitter here @SecretBrokerAU or on email at firstname.lastname@example.org.
Feel free to contact him with your best stock tips and ideas.