Turney Duff’s The Buy Side is every Wall Street memoir and every addiction memoir in one. Duff, a hedge fund trader who, not surprisingly, developed a nasty cocaine habit, documents his unlikely rise from solidly middle-class Kennebunkport, Maine, to Ohio University (where he got a journalism degree) and, eventually, to Morgan Stanley and a series of hedge funds, including a stint with that of convicted insider trader kingpin Raj Rajaratnam’s Galleon Group. The book is subtitled A Wall Street Trader’s Tale of Spectacular Excess, and on that it totally delivers: line after line after line after line after line. But the “spectacular excess” is little more than one finance cliché after another, packing less punch than the very mediocre recent disillusioned-by-Wall Street memoir, Why I Left Goldman Sachs by Greg Smith, and the classic that defined the genre: Michael Lewis’ Liar’s Poker.
1. Stumbling Into Finance
Duff graduates from Ohio University and moves to New York to be a writer. The December after he graduates, Duff, still in Maine, “sent over thirty blind resumes and cover letters to newspapers, magazines, and public relations firms.” No one bites. After calling public relations firms and failing a typing test, Duff turns to his uncle Tucker and ends up getting interviews all over Wall Street: Lehman Brothers, Merrill, KBW, Jefferies, Smith Barney, UBS, and finally Morgan Stanley, where he gets a job as a sales assistant.
Michael Lewis, as detailed in Liar’s Poker, graduated from Princeton with an art history degree and went off to graduate school at the London School of Economics. While in London in 1984, Lewis gets an invitation to dine with the Queen Mother through a “distant cousin of mine who, years before, and somewhat improbably, had married a German baron.” Lewis ends up seated with the wife of a Salomon Brothers managing director, and by the end of the dinner, she offers him a job at Salomon Brothers, where he becomes a bond trader.
2. Scary Colleague Who Throws Stuff
Duff meets Dave Slaine, a tall, muscular trader whose “hair-trigger temper is legendary on the floor.” Although Duff is unclear about exactly what transpired, one story follows Slaine around: He gets mad for some reason and rips out his keyboard and throws it across the room. “Dave scares me. He scares just about everybody.”
In Why I Left Goldman Sachs, Smith recounts an instance during his internship when one managing director asked another intern for a cheddar cheese sandwich. “The kid came back with a cheddar cheese salad,” Smith writes, “[the managing director] opened the container, looked at the salad, looked up at the kid, closed the container, and threw it in the trash.”
3. Screwing Clients Is Appalling
All three memoirs describe various levels of uncomfortable dealings with clients. Here’s Duff’s take: Galleon gets a big chunk of an IPO that more than triples in value the first day. That trade is booked in the proprietary account for the firm’s managers — it’s their money. The stock rises from $30 to $110, and $8 million worth of profit goes into the admiral’s account. Duff writes that “the same scenario … happens with regularity at Galleon. We buy a stock in the morning and … decide in the afternoon which account it should go in. If investors saw the performance of the admiral’s fund, believe me, they would start asking lots of questions.”
Smith’s version of supposed mistreated clients is much less damning: The first and most famous example is when a junior associate who works with hedge funds tells Smith that a client did a trade through Goldman Sachs without checking it with other brokers and ended up paying about $1.5 million more than he would have otherwise. The associate tells Smith: “My Muppet client didn’t put me in comp on the trade we just printed.” Smith’s disillusionment really starts here: Muppet goes from evoking “childhood memories of cute puppets such as Kermit the Frog” to representing the adversarial relationship he felt Goldman had with its clients. He also claims that Goldman analysts changed their buy and sell recommendations on European banks “from positive to negative back to positive ten times” during 2011 based on the needs of the firm’s traders as opposed to an objective consideration of the health of the banks.
One of the linchpins of Liar’s Poker is the sale of a block of AT&T bonds. A senior trader tells Lewis to instruct one of his clients to buy AT&T bonds and sell short (bet against) 30-year U.S. treasury bonds. The senior trader tells Lewis that the AT&T bonds are undervalued and that the trade would be good for his client. When Lewis processes the trade, it’s announced over the Salomon loudspeaker: “Mike Lewis just sold three million of our AT&Ts for us.” Lewis later learns that the trader recommended the trade to Lewis because he was losing money on the bonds and wanted to get rid of them. When Lewis confronts the trader, he says, “Who do you work for, this guy or Solomon Brothers?”
4. Bonus Obsession
Duff, like the rest of Wall Street, spends much of the narrative fixated on his bonus. His “low” $200,000 salary “barely covers the bills,” and he depends on a bonus several times that amount to cover his vacations, personal shoppers, and rent on his triplex. He goes into work on New Year’s Eve and tries to squeeze out whatever trading gains he can to get a bigger bonus and books $10 million in trading profits after mildly screwing over one of his brokers by canceling short-sell orders and then buying the stocks. The next chapter is just a picture of a check for $1,864,999, the amount of his take-home pay in 2003.
Smith is disappointed with fellow Goldmanites when they become transfixed by their bonus and start counting on a certain amount every year to finance their costly lifestyles. Smith is even more disillusioned with bonuses automatically determined by the revenue each employee produced — which lead, Smith claims, to the “poisoning of young minds.”
While at Galleon, Duff is a huge Goldman Sachs client and is invited to address the firm’s new summer associates. One of them asks Duff, “If I’m your broker and I want to increase my business with your hedge fund, what’s the best thing for me to do?” He responds by saying, “Well, you can start by taking me to Vegas.”
Smith, in contrast to Duff, is something of a goody-goody whose biggest vice is his love for table tennis. But when he goes to Las Vegas for a colleague’s bachelor party, he ends up “in a hot tub with three Goldman VPs, a managing director, a pre-IPO partner, and a topless woman.” The extent of Smith’s debauchery is having a few too many beers and receiving $1,000 worth of chips from a partner. Duff, on the other hand, regularly gets loads of cocaine from the brokers he works with.
6. Turning to Writing
Duff starts writing in rehab, where “the words came out of me in a kind of Keuroac flourish — the quantity, that is, not the quality.” Just writing the book is a relief for Duff: “This book represents a beginning, a middle, and a new beginning. I wrote it for myself. Writing it is something I had to do.”
Smith’s book started with a New York Times op-ed that he wrote while he was working in London. Before he distilled his disappointment with Goldman into the Times, he began to write compulsively: “Writing was my way to distill into simple terms exactly what I felt was wrong.” He wrote “on airplanes, in airport lounges, in hotel rooms, and in my flat late at night” for three months before it occurred to him to speak out publicly. The result: one of the most-read Times op-eds of all time and the subsequent memoir.
Lewis, on the other hand, was a writer during his finance career; he worked as a freelancer on nights and weekends at Salomon Brothers. He’s written since then too.