They're more like a red flag during a Formula One race: The cars coast gently around the track until the wreckage is cleared whereupon they all roar off as if the accident never happened. The difference is that, on Wall Street, it's possible to make the disaster work for you.
You can inch your car quietly forward so, when the race recommences, you're its surprise leader.
To win any recession, however, you need to understand its rules. The good news is that there are only three really important ones. The bad news is that it's not enough to commit them to memory. You must take them to heart, and allow them to guide your every step.
Rule No. 1: Betray your employer before your employer betrays you.
Chances are, if you work on Wall Street, you work for some giant corporation. Citigroup, say, or Merrill Lynch & Co. The sheer size of these firms may convince you that they are, essentially, secure, that there is no better place to ride out a storm than among the tens of thousands of fellow employees.
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This is a mistake.
No Safety in Numbers
There's seldom any safety in numbers, and the more parlous the situation, the more dangerous it is to be in it with a lot of other people. London during an outbreak of the bubonic plague, the Superdome during Hurricane Katrina, the New Jersey suburbs: People are always clustering together precisely where and when they should not.
No, if you want to win the recession, you need to find a hole and crawl inside it, until the shooting stops. This hole is called a HEDGE FUND.
Look around. Note how many of the really shrewd people have recently decided to abandon the big firms for which they have happily worked for many years, and sneak off to some small corner of the financial universe.
I know what you're thinking: What if no hedge fund wants me? What if I set up my own hedge fund and investors won't give me their money? Which brings me to . . .
Rule No. 2: Remember what you are selling.
No matter what you've told yourself in good times, to justify the huge paychecks you have received, you aren't selling actual money-making expertise. For decades, brokers and money managers as a group have underperformed the market. Yet ordinary investors continue to solicit their advice and pay them for their services. Why?
Greed, contrary to popular belief, isn't what keeps this strange wheel spinning. Greed eventually leads to self- interest. In good times, the dominant psychological impulse can be mistaken for greed but what's really going on is a lot of people are worried everyone else is getting rich and they aren't.
At the bottom of the Wall Street money machine isn't greed but anxiety.
In bad times, this deep truth reveals itself more clearly, for the anxiety now gets expressed as fear. But there is as much money to be made from it as ever. The TV news projecting oil at $200 a barrel, the stock market collapsing, banks repossessing millions of houses: This stuff is pure gold, if you know how to work the mine.
Sadly, most Wall Street people don't. They instinctively avoid controversy. They dislike contemplating the events that inspire terror in potential investors. They think their job is to calm investors. To pretend everything is fine, even if it's not.
This is the instinct you must fight: A calm investor is one who might think twice before investing in your hedge fund.
You need to learn to talk to investors in new ways.
Rule No. 3: Hide your motives. Or, minimize the semblance of financial interest.
Don't tell anyone how well you're doing for yourself, for example, not even women you have just met. Recessions blow in with them a general backlash against worldly pleasures and material obsessions.
You must reckon with this shift in public values, for it will occur even on Wall Street, and threaten to expose your ambition as freakish. Don't worry: it's temporary. But people are going to be watching you closely for any sign that you fail to grasp the relative unimportance of money. Mollify them. Acquire some painless habits.
The goal isn't to get people to like you. That would be too much to ask. The goal is merely to get people to tolerate you, and dissuade them from organizing themselves against you.
Do this well enough and by the time they realize what you've done the next boom will have begun, and they'll treat you as their hero.
(Michael Lewis is a Bloomberg News columnist.)