Chapter 10
“T his all started in the months after World War Two,” he began.
“Which in terms of the trading empire’s timeline, might as well have been before the last Ice Age.
My first year at Wharton, I came across this guy.
By that point he was reduced to a footnote in some introductory finance textbook.
But back in the late forties, the man was king. ”
At first, Rae seemed to float there on the other side of the table. Her gaze drifted, her features remained slack. Like she was only partially recovered from some illness. Brody didn’t mind. Well, he did, but not overmuch. He was fairly certain he did the right thing. If not, he had tried.
“This guy was a piece of work. Alfred Winslow Jones was middle-aged, incredibly ugly, a former communist spy.” She focused on him then, a sharp glance that he rewarded with a tight smile.
“Jones started by identifying underperforming companies in three industries that closely followed the overall market trends. He then bet against these firms, using the entire stock market as his bellwether. When the market fell, Jones shorted the stock of these companies, betting they would fall faster than the overall economy. The financial papers called this idea magic.”
She gradually became lured into the here and now.
So Brody continued, “Hedge funds sprang up almost overnight. They rode this incredible wave for over twenty years. Then the entire industry was caught out by the seventies market crash. They vanished like somebody sprayed weed killer over Wall Street.”
Their food came, and eating anchored Rae further.
She sipped her wine, but the level in her glass stayed more or less at the same point.
Rae was watching him more intently now, listening as he went on, “When George Soros reignited hedge funds in the nineties, Alfred Winslow Jones and his fundamental ideas were ancient history. His triumphs were forgotten. I only discovered him by accident, like I said. But it seemed to me his basic concept held as much potential now as then. So, I did my thesis on modernizing the core idea. But I didn’t use stocks.
I expanded his concept into the biggest macro sphere possible. I went global.”
Brody took a bite and waited to see if she might ask what he meant by that word, macro.
When Rae merely watched and ate another minuscule forkful, he continued, “I chose three raw materials that were highly sensitive to the international economy and its overall direction. These materials also happened to be very volatile, price-wise. They formed the micro side of my algorithms.”
She paused then, her glass held in midair.
Brody took that as the question she did not yet care to voice, and explained, “At their most basic, algorithms are formulas into which you input data. The data alters the formula’s outcome, and in my case, the outcome predicts the direction that these micro components will shift. ”
Rae finished everything on her plate, shook her head to his offer for a dessert or coffee, waited while he paid, then they rose and left the restaurant.
She did not reconnect hands as they walked back to Emma’s.
But she was there with him now, listening intently as he continued, “My algorithms take full advantage of modern computational power. The goal isn’t to ride the Wall Street sort of daily roller coaster.
I’m after the same thing as our former spy.
I want to maintain a steady course, no matter how stormy the economies and markets become.
Regardless of global politics, growth, inflation, recession, whatever.
And I outperformed the markets, Rae. Even so, the concept is too stable, too boring for the big New York funds.
Their fast-buck attitude to markets doesn’t have room for my aims. There’s no adrenaline rush here.
And when they succeed, they outperform me by miles. But the risk they run is enormous.”
A gentle night breeze had gathered enough force to form the mist into earthbound clouds, floating in and out of their way as they started down the block leading to Emma’s home.
Then his phone chimed with an incoming message.
Brody was going to ignore it, but Rae spoke for the first time since leaving her aunt’s bedroom.
Unless of course he counted the half-formed words that had emerged with her sobs, while she clung to him so fiercely he could still feel her arms.
She said, “With everything that’s happening, you should check.”
Reluctantly Brody pulled out his phone, read the screen, then pocketed it before Rae could see. “It can wait.”
Rae planted a warm, soft hand on the side of Brody’s face. She whispered, “Thank you, friend.”
Brody walked her over and held her door and stood in the headlights as she reversed from the drive and drove away.
He turned and stared at Emma’s silent home, wishing for a hint of solace, or the sort of comfort that the woman had offered the younger Brody during countless hard moments.
But the windows were dark now. Brody touched his phone, wondering at how his boss had managed to attack in this precise moment.
The text read, My hotel, eight o’clock tomorrow. If you know what’s good for you, you’ll come alone.