Trade Secrets

I’ve always counted things. I have an obsession with numbers and data. This makes working for a hedge fund seem logical.

All my life, I’ve counted and sorted almost everything: macaroni shells on my plate, squares in a parquet floor, freckles on my boyfriend’s neck. Data always has a purpose. One day, I’ll notice an odd shaped “freckle” on my boyfriend and tell him his numbers are off. He’ll go see a dermatologist and find out it’s a melanoma. And, BOOM! I saved him.

Counting is serious business for me.

I counted stairs and floor tiles, and tally them up as though I could include them among the reasons I was worthy of calling myself a New Yorker. Every morning, I would add another 47 subway stair steps to my bank. I would keep my eyes firmly on each step and diligently count. Which is why it is not at all surprising that I was the only person to see the little black pocket journal lying on the second step from the top.

It was just under the railing that split the staircase in half and had migrated to that position after being jostled out of the way by hurried straphangers. I paused, as briefly as I could so as to not enrage the distracted stranger on my tail, and scooped it up.

I got to the top of the stairwell, little black book in hand, and only found a grumpy, distracted horde. No one was frantic. No one was looking down. No one was noticeably without their pocket journal. And, pretty soon, hardly anyone was around at all.

I pulled back the elastic band that held the journal closed and opened the cover. No name. No contact information. Nothing.

There was only a quote on the inside cover in impeccable handwriting:

I looked at the LED sign above me and noticed that it was almost 8:40, so I put the little journal in my coat pocket and made my above ground and out into the streets of lower Manhattan.

I had a presentation in less than two hours, but now that random quote was in the forefront of my mind. More accurately, I needed to know who that journal belonged to. I tried my best not to pull it out of my pocket in the elevator to flip through its pages for more clues.

I palmed the little journal in my coat pocket as I made my way through my office, still resisting the urge to yank it out. I hung my coat, hat, and scarf on the hook at the entrance to my cube and started my day.

***

By lunch, I was on a high. My presentation had gone well, and I used the mystery journal quote in my closing remarks. It went over very well with one of the department heads who perked up and exclaimed “CHARLIE MUNGER! Not exactly the patron saint of hedge funds, but definitely a Wall Street god.”

It had solved one mystery for me: the quote is Munger’s — esteemed partner to Warren Buffett and the brains behind Berkshire-Hathaway.

I decided to delve into the journal, but all I found was codified lists.

I recognized a few things —

VRAC is Vraycom/NTC, a national telecom behemoth; FLIX is Flixter, the pay-as-you go streaming service known for on-demand programming and original content; and GENM is Genome Corporation, a biotech company developing a diagnostic system that can predict cancerous cell formation.

What the numbers in each table meant, I wasn’t 100% sure, but it was definitely some kind of valuation method.

The opposite page included a series of prices for each company, but I didn’t know what the order depicted.

$48, $49, $49, $46, $49, $49, $50, $51, $53, $53

$53, $55, $55, $49, $55, $56, $60, $60, $65, $59

$56, $58, $58, $62, $60, $61, $60, $60, $63, $60

They had to be the cost per share, but from when? They could be years old. They could be from last month. The most recent entry could be from today. Who knows?

My lunch came, and I scarfed it down while I searched the internet for these companies and tried to reconcile the cost per share tracker against the most recent ticker reads. It was definitely a fool’s errand.

The journal continued with that cryptic code and valuation charts for fourteen companies. Some pages had more quotes, and there was an occasional website or note-to-self.

Surprisingly, about a third of the way through the journal, there were incredible ink pen drawings.

Whoever this person is, they have a very interesting mind. I would spend the rest of my evening trying to piece together the data.

***

By 3am, I had discovered the pattern. The share prices were monthly averages for the past several years. It was ironic because the Wall Street scuttlebutt was that Genome Corp, Wallcott Pharmacies, and Flixter had finished poorly, but they were performing as the data trends would predict. However, the companies’ shares were selling for about 20% below their actual market value.

I continued to sip wine as I conducted my research, and between my heavy pours and the information in the little black book, I was drunk trading by 4am. I bought $4,000 worth of shares in the most promising performer in the little black book — VRAC, and I decided I would find the owner of this book. First thing Monday, I would put up signs in the subway station.

***

“DID YOU DROP A BOOK? PLEASE EMAIL [email protected]"

That’s all my flyer said. I put them up all over the station and hoped to hear something.

I waited until the end of the day to check the email account.

I had almost 300 emails by 6pm.

By the end of the month, I had received about a thousand responses, but no one had successfully claimed the book.

The day after Valentine’s Day, I made several additional copies of the original flyer at lunch, and I hung them up after work as I made my way to the train platform.

I pulled out my cellphone to check on the market. The price per share for Vraycom/NTC was holding at $150. I had more than doubled my investment. Most people would sell now, but this was still below the company’s expected Q1 value.

“Are you a day trader or fintech employee?”

I locked my phone and spun around.

“What?” I asked.

When the conditions aren’t just right, a stranger talking to you in NYC is almost lewd. And, when the conditions are all wrong, having a stranger try to engage you warrants a scream and, possibly, mace.

“Are you a day trader or do you work in fintech?”

I gave a nervous and awkward giggle.

“Yeah…no…we don’t know each other. But we should definitely talk,” he said.

This is about to cross the scream/mace threshold.

“Really?”

“I’m Craig Gasket. And about a month ago, I dropped a very important book on those stairs over there.” He pointed to *the* stairwell, and the Cheshire Cat grin grew larger on his face.

My heart was in my head. Quite possibly exploding.

“Hey,” he began, “I don’t know where you’re headed, but would you like to grab a coffee?”

“I…um, I’m not heading anywhere. I mean…I’m heading somewhere, but no coffee…”

I’m officially an idiot.

He laughed and placed both hands on my shoulders.

“Okay. Let me start over — I’ve been in London since I dropped my journal, and I can’t believe that I returned to the scene and not only saw your flyers, but I also saw you putting them up. The book is mine, and I’d like to help you help me. How can I do that?”

***

We took the train to Jay Street and stopped for coffee.

“So, where do we begin?” Craig asked.

“Um…if it’s your book, when did you lose it?” I asked.

“January 8th. A Friday. I was rushing to catch a flight.”

That checked out.

“Okay. So, what is in it?”

“Well, a lot of things. Mostly my notes on businesses in the market that haven’t quite stabilized or reached their max potential.”

He paused to sip his coffee.

“What does that mean?” I asked.

“I calculated the cash flow of about a dozen companies, estimated their real value, and then tracked market performance.”

“Okay. And what quote is written in it? And where?”

“There are a few quotes in the book, but my favorite Charlie Munger quote is on the inside front cover — ‘The best thing a human being can do is help another human being know more.’”

I let out a very startling laugh. He looked around us, raised his eyebrows, and asked, “I take it I passed?”

“It took me a while, but I finally understood what you were tracking in the book. It’s an algorithm. Once I got it, I realized how simple it is. Simple enough to make some easy decisions.”

His right eyebrow shot up.

Crap. I shouldn’t have said that.

“So. You’ve made some decisions, have you?”

My face turned to stone.

He laughed and nudged my foot with his.

“I’m kidding.” He chuckled. “You had my cheat sheet.”

“Yeah, I…uhh…may have made an investment or two.”

“In what?”

I looked around us and leaned in slightly.

“Vraycom/NTC,” I whispered.

He laughed so loudly that he baristas stopped everything to take stock of what was happening.

“Wow. You did do some code cracking. Vraycom is likely to get you some hefty returns pretty quickly! How long will you hold?”

“I mean, I can stay on the hook until it’s about 15% over value.” I replied. “Then, I have to untie some of my money.”

He stared at me with a searching look in his eyes. Like he was looking for something beyond my words. I felt like I was being assessed.

“Listen. If you’re smart, and you seem very smart, I’m sure you don’t have the journal with you. I can meet you anywhere you like to pick it up. But I’d also like to ask something of you.”

I scrunched my face up and looked at him through a squint.

“What’s that?”

“You’re good. You found a simple formula in a complicated code. It’s taken some people a lifetime to figure out that basic math and patience can make you a billionaire. Look, I’ll give you $20,000 for my book back. But I’d also like to give you a job.”

***