Ready Readerson likes being the first one in the office, so he shows up at 6am (3am California time) and high fives the night-owl/“overnight book” prop traders just leaving the building from their gigs which started at 9pm New York time. He has 58 institutional clients who like to hear from him regularly so that they trade through his desk, from which he takes commissions.
The institutions are places like Fidelity, Vanguard, Lord Abbett, and Capital Research/American Funds—large mutual and pension funds that trade shares in units of 10 million. Even a penny commission on a 10 million share trade is…nice. And since the institutions could choose to trade through dozens of market makers all offering the same price, Ready has to compete on something else—information. Or at least in theory that’s how he competes.
His job, more or less, is to convince the big institutions that his sellside research analyst has done vastly superior homework relative to what the competitors’ people are doing and relative to what the company itself is saying about “how well biz is going.” If the institutions perceive the value-add, they’ll give Ready the trades instead of someone else.
So Ready’s days are spent smilin’ and dialin,’ leaving hundreds of voicemails. “Hey Buddy, happy Monday—and what a great Packers game yesterday, huh?—so I’ve got a few pre-announcements for you. Kodak is going bankrupt—stock indicated down another buck to almost zip; GE is buying France and we have a hot IPO coming…some stupid sounding thing Shmook or Shmuck or Sloop or something like that; they do educational publishing and have apparently just killed it on the web. Anyway...you have the Red (Herring) in your inbox; we’ll price Wednesday for Thursday—lemme know if you want to meet the bonehead management and I’ll set them up.”
Ready leaves messages like this mostly on voicemail, occasionally getting someone live. He’ll take new clients to lunch if they want lunch. He’ll try to be helpful. But it’s hard because with so much info so easily available on the web today, most investment shops do their own research and they no longer need intermediaries to help them set up meetings with company management. But Ready likes the people part of his job and interacts with a hundred or so humans a day, albeit most of it done electronically.
He looks forward to racing home in his Porsche on days when it’s not raining so that he can put the top down, and as the wind races through his hair can ask himself, “Why again did I decide to do this job?”