#71. Wall Street, Literally (Monday, August 26, 2013)

#71. Wall Street, Literally (Monday, August 26, 2013)

What was your best day…of being in a big city on your own for the first time?

During my second term at Duke, I had somehow gotten it into my head that I wanted to try the whole Wall Street/investment banking thing. Mostly because Duke was a big recruiting school for those bulge bracket banks and my assigned advisor Jack Campanelli (a Duke alum and former J.P. Morgan/Barclay’s trader) was pushing all of us to go that direction.1

So I went through that whole process, actually semi-seriously this time, and in total had interviews with three places: Morgan Stanley (I did not have the knowledge base), Macquarie Group (interview went okay, but didn’t get invited to Super Day), and Five Rings Capital – a newer prop shop2 started by Jason McCarthy, a former Jane Street trader.

Well, I did my phone interview with Five Rings. And it was all logic game-type questions3, plus a question on how many hours you’re willing to work a week (I said 100). I didn’t get the internship, but they did invite me to their Manhattan office in late-August to participate in a trading competition.

I took a twelve-hour Amtrak train there, arriving at Penn Station Sunday night. From there, I took a series of subways to my hotel – Pod 51 in Midtown (the cheapest decent spot I could find), which had these tiny, well-furnished new-age kind of rooms. I just remember walking out from the subway station, and immediately taking in the whole Manhattan air and skyline that surrounded me like it was the most exciting thing ever.

The trading competition at Five Rings wasn’t until later Monday afternoon, so that morning I took the opportunity to visit the Rockefeller Center and the Museum of Modern Art. Then I had my traditional Manhattan hot dogs for lunch, and was off to Wall Street – where the Five Rings office is actually located.

At the office, I met the fifteen other competitors: mostly fourth-year undergrads from Ivy League schools, including one guy, Colton, from my Bayesian Statistics class at Duke. Most of them had just completed their summer internships at other places like Citadel and SIG.

Then the famous Jason McCarthy, presenting himself as this highly-sarcastic average Joe guy in a t-shirt and jeans, came and introduced the competition. Basically, he would be simulating a basketball game between two (hypothetical) teams. And the idea was that for each quarter, you could actively long or short shares whose values were attached to the scores of each team. So as the scoring progressed, we would, on these iPad things, furiously buy and sell these shares. But we couldn’t take on too much of a long or short position at once, otherwise this random Star Wars noise would pop up and we’d be blocked from trading for a while. So, it was really a competition on day-trading skills.

So, we did the first round of that, and I placed third out of fifteen. Pretty impressive. Jason told us that round two and three would be held tomorrow, and sent us on our way.

That night, after a walk through the Wall Street area, Strand Bookstore, Washington Square Park, and a stop at Chipotle4, I made the full trek from downtown (the 1s) all the way to my hotel in Midtown (the 50s). And once there, I began brainstorming a strategy for the competition tomorrow – with the goal of finishing in the Top 3, and thus winning a large cash prize and potentially more…

(NB: After I placed first in Round 2, I choked in the last round. Basically, I got into too far of a short position early on; and instead of taking a deep breath and resetting, I kept trying to trade the same way I had before – which led to a long series of loud Darth Vader noises and me being continuously blocked off for the better part of two quarters and losing my rhythm. Eventually, I finished something like 10th in that round, and 6th overall. Disappointing.)

  1. As I realized soon after, a terrible idea for me (#74).
  2. Basically, a hedge fund that invests entirely their own money, rather than money from outside investors.
  3. For example. It’s dark. Alex, Bob, Chris, and David need to get across a bridge, but there is only one lantern. Only up to two people can be on the bridge at any time. Alex takes 1 minute to walk across the bridge, Bob takes 2 minutes, Chris takes 5, David takes 10 (he’s injured). How do you get all four across the bridge in the least amount of time?
  4. This, and the hot dogs from earlier, would be far from my only instances of eschewing the exotic food options in a world-class city for…more common fare.