Turney Duff: The unexpected upside of a Wall Street education

Knowing the answer isn’t as important as knowing how to get the answer.

From Turney Duff in American Consequences:

A formal degree might be a necessity for most entry-level jobs on Wall Street… but the real Wall Street education comes from experience.

As a young, naïve man, I moved to New York City in a U-Haul truck with America’s Moving Adventure – Maine! written on the side. It was 1994, and I was wearing L.L. Bean boots and a flannel shirt when I arrived in the City.

Shortly thereafter, I accidentally got a job on Wall Street.

As a B student with a journalism degree and a 970 SAT score, I was an unlikely candidate for Wall Street success. I was an unlikely candidate for Wall Street mediocrity. I had to figure it out as I went along. And one of the many things I didn’t know when I first walked through the revolving doors of Morgan Stanley was that my education was just getting started.

Right out of the gate, I was out-connected, out-degreed, and out-experienced.

My peers came from the Ivy Leagues and had multiple internships. I graduated from Ohio University and knew how to recite the night’s dinner specials while taking an order from a table of 12 without writing anything down.

On my first day, I realized there was no way I could stand out at my job by faking it.

So my first lesson was a quick one… I learned the importance of knowing what I didn’t know (which was a lot) and being teachable. There’s no shame in saying: “I don’t know.” The guilt only comes after you say it again and again after you’ve already been taught.

I saw many “smart” kids come and go. They disappeared into obscurity because they believed they already knew things and wouldn’t ask for help. I learned how to say “I don’t know” for survival. Wall Street taught me the benefit of identifying when I didn’t know something and then proactively trying to learn it.

When you don’t know the answer – get it.

After four years at Morgan Stanley, I started looking for my next gig. One interviewer asked me about the value of the Japanese yen. I had no idea what the answer was. Heck, I didn’t even really understand the question. But I knew the worst thing I could do in that situation was to try and fake it, so I said: “I don’t know, but if you give me five minutes I can find out.”

I got up and left the interview and started parading around their trading desk. The first three people I asked didn’t know. And then I finally found someone who knew the answer to my interview question. Within five minutes, I was back in the glassed-in conference room with the correct answer. I was offered the job.

Knowing the answer isn’t as important as knowing how to get the answer.

In spring 1999, I started working at a now-infamous hedge fund, the Galleon Group. Showing up for work every day felt like living in the second act of a slasher flick – nobody was safe.

“Each day expect to be fired,” my boss said. “If you’re not, then you’ve had a good day.”

I was terrified of getting fired, and it seemed like I was making mistakes daily. I once lost my chair privileges when I didn’t answer the phones fast enough. I had to stand in the corner for five minutes as punishment when I booked a trade wrong. But the biggest sin I committed was incorrectly ordering my boss’s breakfast.

“I told you I wanted my bagel toasted,” my boss said. “Does this look toasted, you dumbass?”

It definitely wasn’t toasted. But I never made the same mistake twice. After all, if I couldn’t correctly place a breakfast order, how were they going to trust me with million-dollar trading orders? So I learned everything matters. Every job is like an audition for the next.

On Wall Street, you’re continually trying to get that next job or the next promotion. And the best way to do that is to excel at your current job. I used that mindset when I was hired as a technical advisor on the pilot of the Showtime series Billions. I didn’t treat it like a job… It was an audition for Season One.

At the Galleon Group, I noticed the most successful traders around me focused on the basics. They were in early, stayed late, and continually asked questions. I followed their lead. And because of the high-pressure stakes at Galleon, it changed my work ethic, assertiveness, and resilience for all my endeavors – far beyond finance. There are always going to be smarter, faster, stronger, and better-looking people than you. But if you choose – nobody can out-hustle you.

Eventually I was ordering everyone’s breakfast without mishap. And I started giving out buy and sell orders. Early on I was taught that with trading, one of the best things I could learn how to do is limit a loss. Identify when you are wrong and change the course. It’s similar to professional sports, where sometimes it’s the things that don’t show up on the stat sheet that win the game for you.

One day I called up a sales trader of mine and gave him a million shares of Amgen (AMGN) to buy. He paused, and then whispered through the phone: “Go away. My biotech trader is out today and the guy backing him up sucks!”

At first, I was shocked. The guy just turned down $50,000 in commissions. But instantly I had a newfound trust in my sales trader. He was looking out for my best interest. I learned that sometimes it’s the sales or orders you don’t take that can improve your business. That sales trader became one of my go-to guys and made a lot more than $50,000 that day.

Being a trader forced me to make decisions and have conviction. The timid get trampled on Wall Street. You must make judgment calls all day, every day – and most important, have reasoning behind it. Of course, results matter, but on a trading desk, you must be able to articulate why you made a decision – have an opinion. So whenever I walked into a morning meeting or my portfolio manager’s office, I learned that I had to be able to explain why I did something.

One of the reasons I was able to work my way up and become a founding partner of Argus Partners, a billion-dollar health care hedge fund, was that I learned how to anticipate. To be successful at a hedge fund, you have to dodge bullets, put out fires, and make money. And the only way to do that is by anticipating who has a gun, where the fires typically start, and how to get information.

When my boss was out of the office, I could predict his needs and act. When he returned, I’d update him what was going on and what I did in the meantime to solve the issue. The best way to walk into someone’s office when there’s a problem is to also bring a solution.

There’s a science to making an investment decision – when to buy and sell. And as I got better at trading stocks, I also realized I could use better timing in all of the decisions involving my life… When to ask for Friday off, a pay raise, or a hall pass for a boys’ weekend in South Beach – always look for a good entry point. When you ask is as important as what you ask. Timing is everything.

Shortly after turning 40 years old and returning from my second rehab stint, I finally left the business of finance. But I used everything I learned on Wall Street to become an author and speaker, and to work in television.

That’s why I think there’s no better schooling than getting a job on Wall Street. Regardless of what you end up doing later in life, the knowledge and work ethic required to succeed on the Street can benefit you forever.

. . .

Crux noteAmerican Consequences is a new, 100% FREE online magazine from P.J. O’Rourke and America’s leading financial and Libertarian contrarians… to read past issues, click here.

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