In 1998, the stock brokerage career was at its very pinnacle – it had never been as good as it was that year and it would never be that good again. This was that golden moment where the economy was great, everyone was making money in name-brand large cap stocks and the online brokerages were still a non-event so full service commissions of 3% per trade were still the norm.
And that summer, I was working as an intern/cold caller between years at school. I was with a high-flying retail brokerage where the guys were cleaning up. We were making markets in a lot of midcap tech names in the electronic contract manufacturing space (Flextronics, Jabil Circuit, Smart Modular etc) and the stocks were working out. I saw windfalls of money made by the brokers that summer on a weekly basis. It felt like the good times would continue forever.
And then me and the guys I worked for got a rude awakening one afternoon. The profession of brokerage was peaking and ready to begin a secular decline that would crush firms, ruin business models and deflate all profitability and rationale from the model with every passing year. The writing was on the wall from a regulatory and technological standpoint but almost no one saw it coming (they never do).
But one guy in particular did. Investment News just ran a new excerpt from my book Backstage Wall Street, it’s about the time one of the greatest stockbrokers who ever did it threw a bucket of cold water at us that I should have heeded. Check it out here: