Jeffrey Picower

Jeffrey Picower
Jeffrey Picower

From James B. Stewart’s Pulitzer Prize-winning Den of Thieves (New York: Simon & Schuster, 1992) (p. 236):

 

By and large, investors reacted enthusiastically. The largest single investor – and in Nagle’s view one of the most mysterious – was Jeffrey Picower, who invested $28 million. Nagle had no idea where Picower’s money came from; he occupied an unmarked office suite in an anonymous Manhattan tower.

 

We now know where Picower’s money came from: tax shelters for wealthy clients; merger deals; pharmaceutical spin-outs; and being the major investor with Bernie Madoff. Stewart’s reportage is one of several ‘weak signals’ that are now more significant given the Madoff investment scandal revelations. Picower’s estate settled a Madoff trustee suit for $US7.2 billion in 2010.

 

Stewart’s description of Picower is also interesting in terms of financier elites. Picower, like the Theosophical Secret Chiefs or the Austra family of vampires in Elaine Bergstrom‘s Shattered Glass series, deflects attention from himself. The mysterious fortune; the unmarked office suite; and the anonymous Manhattan tower made Picower more enigmatic and understated in a period when Wall Street’s Masters of the Universe indulged in excesses. The true 1% perhaps remain in the shadows.

Bungalow 8

Sometimes you can causally or process trace an interest to a specific event that involved others. I have written in the past about how I encountered the legendary Anglo-French financier Sir James Goldsmith. This was likely a remanifestation of Goldsmith’s career arc in the 1980s merger wave. James B. Stewart reveals in his book Den of Thieves (New York: Touchstone, 1992) about the 1985 Predators Ball hosted by Drexel Burnham Lambert:

 

But those thoughts quickly vanished, for far more important matters were brewing that night in Bungalow 8. Boesky was in a corner talking quietly with Icahn; Sir James was in a group with Pickens and Flom. Murdoch and Lindner were chatting with Kay and Engel, the affable host. Within only a few weeks, Pickens would launch his bid for Unocal, Peltz would bid for National Can, Sir James would attack Crown Zellerbach, and Farley would go after Northwest Industries—all with Drexel financing. (p. 138).

 

Goldsmith’s Crown Zellerbach bid used greenmail and white knight practices (pp. 160-161). It led to renewed media interest in his work . . . which eventually led to my encounter with his work in 1995, and to revisit it in 2010.

Trading Lineages

For about three years I have been looking at financial markets as part of a practice-based research program. This past week I honed in on some specific material for a longer-term project. I then realised that much of the research material is traceable to several key sources.

 

In the 1980s, Stephen Brill’s American Lawyer Magazine helped develop the careers of several financial investigative journalists. Connie Bruck (The Predators Ball) and James B. Stewart (Den of Thieves) documented the insider trading scandals involving Ivan Boesky and Michael Milken, who both influenced Michael Douglas’ portrayal of Gordon Gekko in Oliver Stone’s film Wall Street. I recently discovered that Jim Cramer (Confessions of a Street Addict) was briefly at American Lawyer Magazine at the same time as Bruck and Stewart: Cramer founded a hedge fund, was involved in TheStreet.com, and is now a high-profile CNBC presenter. Bruck and Stewart’s detailed reportage foreshadowed the recent insider trading cases involving the Galleon and SAC hedge funds. Cramer’s experience is far more cautionary.

 

Another personal influence is the work of performance psychologists who have worked with traders. Ari Kiev (The Mental Strategies of Top Traders) worked with SAC’s Steve A. Cohen. Brett N. Steenbarger (The Psychology of TradingEnhancing Trader Performance) has worked with several firms including SMB Capital, where Mike Bellafiore (One Good TradeThe Playbook) and Adam H. Grimes (The Art and Science of Technical Analysis) have influenced proprietary trading firms. I have found that performance psychology insights can be applied to other areas of my life.

 

Finally, I have picked up specific insights from Market Wizards traders like Linda RaschkeMichael Steinhardt, and Larry Williams, who each have lineages of hedge fund and trading students.

 

Collectively, this work from American Lawyer Magazine, performance psychologists, and specific traders continues to shape my on-going, practice-based research.