A Belmont Fiasco
A few years back, Shake invited me to the Belmont Stakes to watch American Pharaoh go for the Triple Crown with a bunch of his friends. If you’ve ever been to Belmont, you know the trains are an absolute SHIT SHOW getting into and out of the Racetrack. Hundreds of thousands of drunk idiots trudging back and forth creating delays on delays. Shake suggests the limo is the best method of transportation, “Bennett if you’re not taking the limo to Belmont --- why even have a limo?” He makes a valid point and tricks me into going.
The day of, I stop by the bank to deposit some cash ($10k or so), however, Shake was adamant about a 10 am pregame arrival. The race started at 5 pm, some call that an insanely long pregame, but Shake insisted it was the move. (Shake note: it IS the move, Bennett just can’t hang) In my rush to get ready I figured it was a better move to hold the cash in my slim fit khaki’s and deposit later. After all, we’re headed to the classy Belmont Stakes where it’s all fancy suits and women in hats, it's not like I’m going to get robbed right? What can go wrong?
I previously told myself I wasn't going to drink because I drove everyone in. However, upon finding out the race is SEVEN HOURS AWAY -- I figured a drink or two wouldn’t hurt. I’ll pre-game a bit when everyone is pumped for the day ahead, similar to the Alpha Chat at 9:31 on Monday morning. After, I’d switch to water and be patient as everyone else continued to blackout. That was the plan, however, as traders we know it is very easy to change your gameplan as the trade starts to uptick in your favor. High five sell signal anyone?
When we get inside the venue, we make our way over to an area where a group of stereotypical, Jersey-Shore-acting Long Islanders already camped. Now, if I thought Shake’s 10 am arrival was excessive, these guys must’ve gotten here at sunrise. How the hell did they get the baby pool full of Moet bottles in here?! I lost Shake and his friends and found myself stuck with this group of guys, not wanting to be the loser by himself in the corner.
I drum up a conversation with one of these guys, and eventually work gets brought up. I mention that I'm a trader and work with Shake, who is nowhere to be found.
As any trader knows, once this is mentioned, the other person is likely going to give you their life story in the markets. They’re going into their prior endeavors of how well they navigate the market (which 9/10 times is complete horse shit) as they explain the insanity of their ‘strategy’. This swollen, tanned idiot was no exception. He gave me the typical dumb money trader answers. His trading strategy in the simplest sense was investing in 3X Long Oil ETFs. If you remember our “Crippling Loss” story, you know I lost $60k in Triple Leveraged ETFs and have become a bit of a crusader opposing these over leveraged trading vehicles. So as he’s telling me this, I’m trying to be nice, while asking simple questions.
Me: Are you aware of the daily rebalancing?
Douche: Yeah I know about oil prices!
Me: No I meant the daily rebalancing of the 3X etf -- you do understand those are short term trading vehicles and not meant to be held overnight due to the daily rebalancing
Douche: Dude what are you talking about, oil is going to $100 a barrel and when it does I’m going to crush it!
Me: O…...k. You’ve been red in that trade since day 1 and you think it’s smart to keep adding to a loser?
Douche: No I've been making money!
I pull up my phone, type in DBO and simply ask,
This is where the conversational tide turns from friend to foe. I am asking very simple questions, which he cannot answer and is obviously getting angry. I already knew he was smoked in the trade because I knew the name and was aware oil was getting taken out to the woodshed.
People can pretend they’re strong and bulletproof, but I was able to poke holes in his armor with a few simple questions. So after a few more questions, I give up, I can’t take this guy’s delusion any longer. I aim to switch gears and describe the odd lot theory which explains that whatever he thinks is correct is more than likely wrong and vice versa.
Now, I don't gamble. I haven’t spent $1 in any casino, never bet on the Super Bowl, and genuinely could care less about the outcome of any horse race. BUT, in the sport of crushing this cocky Long Islander I figured what the hell, he’s a shitty trader, he is definitely a shitty gambler. So I offer a proposition:
I pull out the 10 racks and tell him:
“I will bet you $10,000 that whichever horse you bet to win will lose, you in?”
He looks at the wad of crisp hundreds in my hand, and asks to see it, to count it. I hand it to him and say sure you can count it, its $10,000. Now the tide changes once more, and this is where being able to stay calm and formulate a gameplan on the fly comes into play. As soon as I hand him the money….
He takes it, looks at it briefly as if its 6 inch subway sandwich, looks at me and put its in his pocket and replies “thanks for the $10k!”
Now mind you, I am by myself at his table/area with all of his friends and I am alone. Sure I could have dropped him and tried to get the money back, but 9/10 times I'm getting jumped and more importantly not leaving with the cash (bad game plan).
I could beg and show weakness, maybe he’ll show mercy and give it back -- on second thought -- fuck that I'd rather him light it on fire.
How can I turn this franchise around and really crush this fucking piker? In the brief moment after he says thanks, I look over his shoulder and see 2 bouncers off in the distance. They were working the “back door of the beer tent” -- talk about the lowest level of the socio-economic call of security guards. The back door of the beer tent, lol. They’re not running the front door, giving people the once over until they get slipped a $100. They are watching the back door with no action other than watching the bus boys throw out the trash. I’m thinking I can use them in my favor, but first let's set this trade up.
Time to execute this gameplan I formulated in the past few moments.
After he replies thank you, I laugh, “You think I came here alone? That's my beer money. If you want to keep it, go for it. Just realize I came here in my own personal limo (which is true, I left out the part of me driving said limo) and I also have my own private detail, and they HATE IT when I take a loss.
Now, Douche has his back turned to the bouncers, therefore he cannot see them. I gently point over his shoulder at the 2 clueless security guards and wave them over.
They both cluelessly look at each other since I am the first person to address them all day, so they immediately start walking over. As they do, Douche turns around to see two mammoth security guards wearing ridiculous tuxedos walking over with authority.
He sees them and now panics and gets nervous. His reaction is very similar to my questioning of his awful oil trading strategy. He quickly reaches into his pocket, hands me the cash and wants to be friends again. I promptly wave off the security guards who just gave me a look of utter confusion. This Douche thinks I’m even cooler now and wants to become best friends. I, on the other hand, want to knock this fucking tool out, but I have to play it cool, long game remember. He throws his arm over my shoulder and says I’m buying you a fucking beer, let's go! Meanwhile the fucking kid had thirty bottles of Moet two feet away! Talk about an awful trader. But sure, let's go buy $17 beers. So he orders two beers, and I see two girls next to us, so I tell the bartender two more for the ladies. The look of panic comes over his face yet again -- the fucking kid couldn't afford four beers at the cash only tent.
I nonchalantly tell him to put the crumbled $20s away -- for the love of God. I tell him I got it and peel off $100 from the bankroll, grab the beers and hand them to the girls to introduce myself. I then turn my back to the Douche for his cue to get the fuck away from me. We all walk off toward the stadium while Douche just stood there -- alone, beer in hand, and confused as ever.
It pays to have a game plan.