The Secret Broker: You don’t get to the Big Smoke without a little kindling
The Secret Broker
The Secret Broker
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.
Me and Mrs Broker are away having a traditional mid-week break, which we always take on Budget Night and come back a few days later.
Not so I can sit up and follow everything to do with the Budget; I actually have no interest in it whatsoever.
A long time ago, I realised that everything is leaked before the actual Budget Night hits the TV screens, so there is no point watching and taking notes.
Most of it is already known.
The main reason to be away at this time is so no one can annoy me with ‘what do I think about so and so in the Budget’ and ‘how will it affect my equity holdings?’
By being away and with ‘no reception’, I am free from all of this. By the time I have reappeared back out of my bunker, they have worked it all out by themselves.
I find that all the newspapers cover off on all of the Budget ups and downs very well, so they have done all the heavy lifting in analysing things and then coming up with intelligent and well thought out reading fodder.
The other enjoyment of being away at this time of year is it allows me to hone my (summer forgotten) skills at building a fire, so I am prepared before the real cold air arrives.
Ever since I was a kid, I’ve been fascinated by fire and this included insisting as an eight-year-old on being driven past an old burnt-out building on our way to visit a certain Aunty.
The fact that fire can be man’s friend or foe is the bit that always got me.
I remember writing once about how Australia is peppered with stone-built fireplaces and the scraps of a burnt down house surrounding it.
Why they didn’t build their whole house in bricks and stones like their still standing fireplace still astounds me.
You can learn a lot about life, when you start to build your first fire of the year.
Without the small bits of kindling being involved, no fire would be kept alive long enough to breathe flames into the real big logs which are needed to really produce a nice long-lasting evening heat.
While down on my knees putting everything in place before I strike the one (yes, one only) match which will ignite this fire, it reminded me of the structure of some of the old trading floors I’ve had to endure.
Having started at the bottom as a messenger and worked my way up through the ranks, I appreciate that it is the small things that actually make the big things happen.
My first boss would tell us that even though we work in the Post Room, without us going out and delivering and collecting documents, the whole City of London would not be able to function.
He normally made this speech just before sending us out into the freezing depths of the streets of London.
The bigger the buildings, the more the wind would howl down the little alleyways and freeze your glasses so you couldn’t even read the street names.
Now, here is an interesting fact that only a few people would know, and most of them would probably have been a frost-bitten messenger at one time in their lives.
Every building in the City of London had to allow, by law, a public thoroughfare right from one end to the other end, if the building was built on an old alleyway.
So basically you could walk from the Stock Exchange floor to the Bank of England without actually needing to go down any alleyways, and cross only one street.
These buildings had such thoroughfares covered over, so on some walkabouts, you could actually stay quite cosy and warm.
The other advantage of this bit of English eccentricity was that each building required a doorman to police these public thoroughfares.
Being pre-Google Maps, each doorman became our own personal Google Map and were a fountain of knowledge on how to get you to your next destination.
For example, the building 99 Bishopsgate is right in the heart of the City of London. Even though it is over 100 metres tall, it has ‘a public right of way that exists through the building as part of the City of London ‘highwalk’ system, connecting a pedestrian bridge over London Wall to the walkways around Tower 42’.
Now, having built my fire, I sit back and relax with the warm air filling the room and the flickering flames bouncing off of my tablet and do a bit of reading.
One article about the new UBS trading room attracted my attention, as it mentioned that they had 140 traders on one floor and how they were organised around the place.
It even mentioned that their trading room had different coloured carpets. Dark grey meant no personal communication was allowed in that area, whereas the light grey carpet meant that personal phone calls were allowed.
I was giggling to myself, as you can imagine being tasked with arranging a babysitter for the weekend and you’re standing on the light grey carpet, when someone shouts out from the dark grey carpeted area that they have a broker bidding for $100m of your three-year bond position.
Do you drop your phone and run back to your desk and lock in a nice profit for the book or do you keep negotiating with 14-year-old Samantha over what treats will be stocked up in the fridge for when she arrives.
I know from experience that – and still having a certain set of male attributes still hanging intact – that ‘I’ll call them back’ is a far better way to handle the situation.
Organising Diet Coke and Tim Tams to win over the babysitter is far more important. A no-go means I can’t go home till after midnight. The “I gave you one simple task to do and you can’t even get that right” result is just too stressful.
“But darling, I was standing on light grey and had to run back to my dark grey carpeted desk mid-Tim Tam negotiating!”
In my day, you wouldn’t care whose phone you would be on or where you were standing as you would close both deals at the same time.
‘Done’ to the broker and ‘done’ to Samantha. Two phones and one colour carpet. Easy.
In fact, the biggest trading floor I worked on had over 1,000 people on it. It was so big that it had its own canteen and the noise-reducing baffles over our trading section alone cost over £4m.
When everyone’s desk had to be moved back a few inches to make way for a new trading team, they charged my book £10,000 for each desk in my section.
So, UBS, your modern 2023 trading room doesn’t really impress me that much.
And remember that, just like building a successful fire, it’s the kindling that makes it all happen. Without it your 140 ‘big logs’ will never put real big juicy flames under your trading profits.
Now, can you help me up please, I think I’m stuck. My knees haven’t warmed up yet!
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